3 Developers Get $10 Million in Subsidies

The Fenty administration is providing $10 million in tax subsidies to developers for three projects in neighborhoods where city officials hope to see further investment.

The largest beneficiary is City Interests, a development company that is getting $8.8 million for its project, which includes 220 residential units and office and retail space along South Capitol Street in Southwest.

A second developer, Four Points and W Street Acquisition, will receive $1.1 million for a residential and retail project along Martin Luther King Jr. Avenue in Southeast.

The third, Neighborhood Development Co., is getting nearly $800,000 for a 70-unit apartment building on Georgia Avenue in Petworth.

The developers expect to break ground on the three projects next year.

"These are great catalytic neighborhood projects," Mayor Adrian M. Fenty (D) said in a statement released by his office. "These teams are making real investments in our neighborhoods, and we are doing everything we can to support these projects and bring them to the market."

With the economic downturn and credit crunch, the District is trying to help developers keep projects moving. The subsidies, officials said, can help developers get construction loans from banks.

The $10 million subsidy comes from a $95 million pot that the District is using to promote residential and retail development on long-bedraggled corridors: South Capitol Street, Georgia Avenue NW, H Street NE, the intersection of Minnesota Avenue and Benning Road in Northeast, and Pennsylvania Avenue in Southeast.

District officials plan to finance the subsidy through taxes generated by the projects after they are completed.

The economic crisis has begun to affect the Fenty administration's efforts to enlist developers to buy city-owned sites. In September, the District invited developers to bid for the right to redevelop the Park Morton housing project, a 174-unit complex in Petworth. But after developers raised concerns, D.C. officials modified the application process, easing potential financial burdens.

Developers no longer have to put down a deposit with their application for the project, according to a memorandum written by Fenty's director of development, David Jannarone, and posted on the city's Web site this month.

Jannarone also wrote that the District is "willing to offer limited pre-development funding" to developers, money that can be used to pay for architectural drawings and other design needs.

Mayoral spokesman Sean Madigan said developers have expressed the need "for a little bit more flexibility" because of the economic crunch.

"They're being very judicious about how they approach deals and go forward with the deals, and how they use their resources," Madigan said.