Graduate School USA shelves plans to open campus in Southwest Waterfront development


A rendering of the Wharf, a planned redevelopment of the Southwest Waterfront in D.C. (Courtesy PN Hoffman-Madison Marquette)

The Graduate School USA, formerly an affiliate of the U.S. Department of Agriculture, had planned to more than double its size by opening a new campus in a planned redevelopment of the District’s Southwest Waterfront.

Those plans have been shelved, the school confirmed this week, leaving the $1.5 billion mixed-use project without an anchor tenant for the office building it plans while it searches for investors willing to provide $750 million toward construction.

Redeveloping the Southwest Waterfront has been discussed for decades and is one of the District’s largest economic development projects. Know as the Wharf, its first phase alone — once scheduled to begin early this year — calls for 225,000-square-feet of office space, 180,000-square-feet of retail, 790 residential units, two hotels and 1,325 parking spaces.

The school had planned on taking the lion’s share of that office space, about 190,000 square feet at the corner of Maine Avenue and Ninth Street SW, raising the prospect of a waterfront swarming with students attending day and evening classes.

Jim Huske, a senior vice president at the Graduate School, said the administration informed developer Monty Hoffman, chief executive of PN Hoffman, that it would pull out of the project due to government cutbacks and budget uncertainty.

“We had to move out of that and we let Monty know that probably a year and a half or two years ago now because the market became unstable,” Huske said.

Huske that with sequestration and the government shutdown, the school would remain in smaller space in L’Enfant Plaza for the time being. When Southeastern University, based in Southwest D.C., folded in 2010, the Graduate School assumed some of Southeastern’s students. “Right now we’re sitting back and considering our options,” he said. “You just don’t make an investment when there is such uncertainty.”

Developers PN Hoffman and Madison Marquette had planned to begin the first phase during the first quarter of this year, with completion expected in 2016. Despite the delay, Hoffman said that he has applied for building permits. The Washington Kastles tennis team, whose stadium is located on the site currently, has been looking for a place to relocate to make way for construction.

“Overall we feel very good about it,” Hoffman said. “Our tenancy and our letters of intent for restaurants are going very well and we are in for building permits.”

Hoffman said he was “working with a prospective capital group” to invest in the project. The D.C. government has agreed to put up approximately $198 million for the project, and last year Hoffman traveled to China with D.C. Mayor Vincent C. Gray last summer to try to raise capital.

But the region’s tepid office market will not make finding a replacement for the Graduate School easy. David Carmen of the Carmen Group has lobbied on the project’s behalf and the developers are attempting to lure The Washington Post newspaper to move there.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.
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