Washington's urban renewal agency yesterday told the five development teams competing for the choice Portal site in Southwest that the winning team may be required to buy that multimillion-dollar city-owned tract within six months of acquiring development rights to it--one-fourth the amount of time usually given for purchasing redevelopment property.
The Redevelopment Land Agency board told a room full of surprised developers it is considering the dramatic policy change both to generate more money for the city's urban renewal program and to help determine the exact financial strength of each team.
"We've got five excellent developers and now we're going to separate the men from the boys," said city housing director and RLA board member Robert L. Moore as he looked out into an audience that included prominent developers Rodman Rockefeller, Theodore R. Lerner, Dominic F. Antonelli Jr., Conrad Cafritz and Herbert S. Miller. All five men are competing for the right to develop the Portal site.
"We are separating those who can play in this game from those who cannot," added RLA chairman Nira Long, as the five-member board asked each development team to submit documentary proof of its ability to purchase the Portal property within six months. The board did not indicate when it will decide whether to actually impose such a deadline for buying the land.
Yesterday's action came after criticism that the RLA board has sold city holdings downtown at below-market prices and that it has lost out on any land appreciation occurring during the two years that usually pass between the selection of a developer and the sale of property.
The 10-acre Portal tract at the foot of the 14th Street bridge should sell for at least $100 million, according to a consultant hired by RLA. One developer group already has offered the city $45 million. A final land price will be determined in negotiations between the winning team and the city housing department.
Long and Moore said the board seriously is considering selling land first and approving urban renewal plans later so that the city can more quickly pay off the last of its urban renewal debts, which now total $23 million, and stop the accompanying interest charges, which have so far cost another $30 million, Moore said.
The change would shift the burden of interest payments from the city to developers who usually borrow money to buy land for large developments.
The developers said they are concerned about interest charges mounting up while they obtain approvals from various city and federal agencies.
"Until someone knows when they can build it is unreasonable to ask for a big payment," said developer Melvin Lenkin, a partner with Lerner in the Banneker Associates team.
Yesterday the board for the first time lifted some of the secrecy that usually surrounds its decisions by allowing the public to hear staff reports on the five proposals and some dissension among board members over the importance of some of the criteria that will be used to judge each entry.
The board members were apparently reacting to recent criticism that followed their decision to make a selection without a recommendation from the RLA staff. Two D.C. city council members and some developers have said that the practice of selecting a developer for choice city land without such a recommendation tends to subject the board to increased political maneuvering and pressure from competing developers.
"No matter what you have heard this is not a political process," Long said early in the meeting. The winning developer is scheduled to be selected Feb. 2.