On Monday, Mayor Vincent C. Gray (D) and members of the D.C. Council gathered to celebrate the start of construction at the site, currently part of a parking lot bounded by New York Avenue and H Street NW to the north and south, and Ninth and 11th streets to the east and west.
Six buildings are planned for the site over the next three years — two for apartments, two for condominiums and two for offices, all connected by a public courtyard. On the ground floor, shops and restaurants will line each side of every building. There will be 458 apartments, 216 condominiums, 185,000 square feet of retail, 515,000 square feet of offices and four levels of underground parking. Tenth and I streets will be reopened to reconnect the city’s original street grid.
Developers from Hines Interests, of Houston, and Archstone, of Englewood, Colo., said the $700 million project would deliver some of the highest-quality offices and housing in the city. A 1,000-square-foot residential condominium would cost $750,000 to $900,000.
The District is leasing the property to Hines-Archstone for $500,000 annually over a 99-year period and expects to collect about $30 million annually in taxes. Ninety-two apartments will be rented at below-market rates.
Gerald D. Hines, founder and chairman of Hines Interests, said that in designing a project with street-level amenities and a street grid that will reconnect the site with surrounding blocks, the project “has a scale that every citizen of Washington will understand.”
‘A good place to start’
It wasn’t clear what was going to become of the site when, during the administration of Mayor Anthony Williams, city officials decided they needed to replace the old convention center. The facility opened in 1983 as the fourth-largest facility of its kind, but by 1998 the D.C. Council considered it too small to compete for major contracts and approved a financing plan for the new facility in Shaw.
Among the ideas posed for the old site were a central library, a national music museum and a convention center hotel. But a task force created by Williams major mixed-use projects in other cities and determined that the city needed to become a destination after office hours.
“Up until that point in time, office [space] was so dominant downtown, there was almost no housing, and retail was kind of struggling,” said Richard Bradley, executive director of the Downtown D.C. Business Improvement District, who was a member of the task force. “So we said for the good of the city and the good of the downtown, we should build a mixed-use project, and it should have a public plaza as an anchor.”
D.C. chose Hines-Archstone to develop the site through competitive bidding in 2003, but lawsuits over the selection process, the complexity of the project and the economic downturn hindered progress. The delays could have extended for years if not for a $620 million investment by the real estate arm of the Qatari Investment Authority, which made the project its first U.S. real estate investment and is now its principal owner. The Qatari ambassador to the United States and the U.S. ambassador to Qatar were on hand to celebrate the groundbreaking.
“We really think this is a good place to start to make real estate investments in the United States,” said Mohammed Al Saad, vice chairman and managing director ofBarwa Bank, which arranged the financing.
A different downtown
Despite the delays, many of the goals that Williams and others had for downtown have taken shape. Of 103 surface parking lots and redevelopment sites downtown in 1995, 88 have since been built upon, according to the Business Improvement District. The downtown area had about 4,000 residents 20 years ago; today it has 8,449, according to the U.S. Census. CityCenter will add more than 1,000.
Construction is not scheduled to finish until 2014, and a second phase, along New York Avenue, will not be done until late 2015. Gray said he expects the project to create 1,700 construction jobs and almost 4,000 permanent jobs. Nearly 100 local companies have secured contracts with the development team.
As a child, Gray said, he remembers visiting downtown department stores to shop and then heading back home, “because downtown was downtown, and home was somewhere else.”
“But the concept of downtown has changed, and this is an affirmation of the change that has taken place,” he said. “Now downtown is not only a place to be able to do your office business, not only a place to go shop, but it now is a thriving 24/7, living, breathing place to be able to live. And that is an important part of what is going to be developed on this site.”