Poplar Point Developer Pulls Out Of Project
Saturday, January 31, 2009
The largest project east of the Anacostia River in decades was dealt a setback yesterday when the District's primary partner dropped out of the deal, citing risks in the struggling capital market, city officials said yesterday.
Clark Realty Capital, a Bethesda-based company, beat out several other high-profile firms last year to win the right to help the city create up to $2.5 billion in mixed-use development at Poplar Point, a 110-acre swath of parkland in Ward 8, just across from the new Nationals stadium. The winning proposal featured housing, offices, restaurants, a park and, possibly, a soccer stadium for D.C. United.
Clark agreed to fund the construction in exchange for the right to sell off the developed parcels, a government source familiar with the deal said. In the wake of the economic meltdown, however, Clark asked the District to fund the construction and pay Clark a fee to act solely as the builder, said the source, who spoke on the condition of anonymity because the talks were private.
The city balked and is now left without a developer on a project that Mayor Adrian M. Fenty (D) has touted as a once-in-a-lifetime chance to change the image of the city's poorest ward.
"We had a specific agreement with specific deliverables," said Neil O. Albert, the city's deputy mayor for economic development. Clark "wasn't able to meet that agreement for a number of reasons, including what I would speculate as an unwillingness to invest resources necessary to meet those milestones."
Clark executive Bereket Selassie disputed Albert's explanation. He said the company told the city all along it wanted flexibility in its timetable and financing. The credit market meltdown last fall convinced the company that the District should take some of the financial risk, Selassie said.
"What we found is that on long, complex projects, partnerships are the best way to go, because you never know what the market conditions are going to be," Selassie said. "The District was uncomfortable with that. They had not done those before."
It also appears the proposal for a 27,000-seat soccer stadium at Poplar Point, which would cost as much as $225 million in public money, has all but died, also because of the credit market crunch, officials said. United owner Victor B. MacFarlane has not talked with Fenty aides in months.
Clark had won popular support among Ward 8 residents with its proposal for a three-block-long deck that would be built over Interstate 295 to connect Poplar Point to historic Anacostia and other neighborhoods. The company also had talked about a hub of office buildings housing environmental firms. The collapse of the partnership drew sharp criticism from D.C. Council member Marion Barry (D-Ward 8), who had supported Clark's involvement and championed a soccer stadium.
"This decision on the part of the Fenty administration to end the partnership delays Ward 8 residents and other D.C. residents the opportunity to have access to jobs, affordable housing, consumer stores and a quality 70-acre park," Barry said. "The way the Fenty administration has mishandled the Poplar Point project makes it extremely difficult to attract quality developers."
Albert said the project remains on track. A year-long environmental assessment required by the federal government is underway, and the city will reassess whether to solicit a new development partner after that, he said.