The Donohoe Cos. is picked to develop a key Silver Spring site

By Jonathan O'Connell
Monday, January 17, 2011

A development team led by the Donohoe Cos. and the Montgomery Housing Partnership is County Executive Isiah Leggett's pick to develop a nearly one-acre site in Silver Spring near where the Maryland Transit Administration may locate a light rail station on the planned Purple Line.

Leggett said the project, planned for the intersection of Fenton and Bonifant streets, is meant to take advantage of the mass transit route, complement the library being built next door and deliver more below-market rate housing to the area. In a statement last week, he called the developers "a highly qualified team" and the project "another step in the evolution of Silver Spring."

The Donohoe Cos., founded in 1884, recently celebrated its 125th anniversary, but it has not been immune to the recent economic downturn and building slowdown.

Its development unit, located on Wisconsin Avenue NW in the District, was picked from a crowded field of bidders by the D.C. government in September 2008 to develop a city property in Mount Vernon Triangle, at the corner of Fifth and I streets NW. The company won the project by making high-end proposals: a 475,000-square-foot, multi-phase project featuring a 260-room ME hotel by Sol Melia, the Spanish hotel, an English jazz club, a relocated Zenith Art Gallery and 166 apartments.

At the time, Donohoe said it might be able to start construction in 18 months, but hotel financing dried up shortly thereafter and more than two years later construction has not begun. The District is now using the site as a parking lot.

Donohoe also had to change course in Tysons Corner, where it helped build a condominium building with Penrose Group, called the Lofts at Park Crest, only to see the housing market collapse. The building was switched to apartments and the rest of the development site was sold.

Jad Donohoe, the company's development director, declined to comment on the two projects. The company did complete the Residence Inn Arlington Courthouse last year.

In Silver Spring, Donohoe and MHP, a nonprofit affordable housing builder, are expected to negotiate a 99-year-lease for the land with the county and build about 120 apartments, 60 percent of which would be offered below market rate. The project could also include other uses, said Lawrence C. Cager Jr., multifamily housing manager for the county's Department of Housing and Community Affairs. After the county issued a solicitation in February 2010, it received four responses and the Donohoe team was chosen for offering the best combination of qualifications, vision and financial capabilities, Cager said.

"The key thing we were looking for in this is to make sure we got responsive, qualifed developers to respond to the [request for expressions of interest] that could undertake this project in conjunction with the library," Cager said.

Cager said financing was not yet in place. "We're still discussing and defining the financing of the project," he said.

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