By Alejandro Lazo
Washington Post Staff Writer
Wednesday, January 16, 2008; D04

D.C. Mayor Adrian M. Fenty yesterday proposed using up to $200 million in public financing to redevelop the District's Southwest waterfront.

The funding, which requires the approval of the D.C. Council, would pay for the development of public parks, roads and utilities and the repair of the waterfront's embankment.

The city previously selected PN Hoffman of the District and Baltimore-based Struever Bros., Eccles & Rouse to redevelop the area, bringing a mix of housing, retail and cultural attractions.

In addition to the financing, Fenty agreed to lease the developers a 15.5-acre public parcel along the waterfront -- between the fish market and D.C. harbor police station -- that is central to 47-acre project.

Yesterday's announcement was one of a series of ambitious development plans made in recent months by the mayor's office, despite signs of a slowdown in the area's real estate market and a softening national economy.

Recently, the mayor has announced deals with developers to build a new headquarters hotel at the Walter E. Washington Convention Center and for a mixed-use project on the site of the old convention center a few blocks away. The mayor's office is also preparing to announce soon a developer for the Poplar Point site along the Anacostia River.

Work on some of the projects will not begin for years and could arguably outlive any economic downturn. Nevertheless, the mayor faced questions from reporters yesterday about the viability of his redevelopment plans.

"What we have tried to do is really just to try and get the projects done," Fenty said, adding: "You kind of have to spend money to make money."

The District funding for the project would be provided through bonds backed by sales and property tax revenue of the future development. Fenty said the project would increase the annual tax revenue the city takes in from the land to $32 million from less than $5 million.

At the Southwest waterfront, the Hoffman-Struever team has plans to build some 770 residential units, a 675-room hotel, 700,000 square feet of office space, gourmet grocery stores, casual and upscale dining, jazz venues, shops, public parks, promenades, and "significant" upgrades to the marina.

If the deal wins legislative approval, the project could break ground in two years, said Monty Hoffman, chief executive of PN Hoffman.

Although the developers were chosen in fall 2006, progress has been slowed by negotiations with several existing leaseholders on the waterfront.

PN Hoffman last week closed a deal to include the Zanzibar nightclub in the project.

A deal remains to be finalized with JBG Cos., which controls leases on two other establishments.