Donatelli says he is about to deliver just that.
On Aug. 8, Donatelli Development closed on a $65 million financing package to build a 376-unit apartment building with 20,000 square feet of retail at the corner of Benning Road and Minnesota Avenue Northeast, a major crossroads in Ward 7, the city’s second poorest ward. Excavation work begins this week, and the building should be complete by the fall of 2014.
Donatelli said renters in all parts of the city are looking for bustling neighborhoods with engaging storefronts. “People are looking for a lifestyle. They’re looking for a new building. They’re looking for amenities. And not necessarily an expansive living space, because often times they are living alone,” he said.
Like other Donatelli projects in neighborhoods such as Columbia Heights, U Street and Petworth, the new building will be built on a city-owned parcel near a Metro station that he secured the rights to in a competitive process. And just like those neighborhoods, his company will be the first in years to develop a large new residential building in the community.
Donatelli focuses more time on retail than most residential developers. He now owns two Columbia Heights restaurants, Acre 121 and Lou’s City Bar next door, and a 50 percent stake in a third, the French-themed Chez Billy, on Georgia Avenue. Last week he was at Lou’s, which he named after his father, tasting the steak and meatball dishes from a new menu. “All of this is so much better,” he says.
District officials expect him to deliver a similar level of quality to the Minnesota Avenue project. “I think it will be very comparable,” said Senthil Sankaran, director of development for the District. “Donatelli Development has proven itself a very capable developer in transit-oriented development and development along Metro corridors and really activating street life with a significant retail component.”
It has not all been smooth sailing for Donatelli since he was named developer of the project in 2008. A deal to develop a Metro-owned site near the Nationals Park fell through in 2010. He is also locked in a dispute with Magic Johnson’s Canyon-Johnson Urban Fund, his partner on the 155-unit Park Place apartments in Petworth, which has left much of the retail there vacant.
Donatelli, brother of First Potomac Realty Trust president Douglas J. Donatelli, declined to comment on the negotiations.
Because the Minnesota-Benning project is mostly subsidized housing, it represents a new challenge for Donatelli. Ninety-two percent of the units will be set aside for tenants making 60 percent or less of the area median income. Bank of America provided financing, Donatelli said, but so did the D.C. Housing Finance Agency through low-income housing tax credits. He said he is used to residents asking him to add subsidized units into his projects, but with Benning residents it was the reverse. “They wanted some market rate units included,” he said. “So it’s the opposite.”
Donatelli’s partner on the project, Scottie Irving, president of District-based Blue Skye Development and Construction, said the building would provide needed housing for the working class. “With this, I think people like policemen, teachers and firemen are going to get a chance to stay in the city,” he said.