The District of Columbia government's bold plan to get private developers to build a downtown campus for the city university at no cost to taxpayers has no takers.
For years, the city had been hoping to build a downtown campus for the University of the District of Columbia on a four-block site north of Mount Vernon Square. But Congress repeatedly denied the funds.
Four months ago, the city offered to lease the land rent-free to any developer who would construct an education complex with 80 classrooms, a cafeteria, laboratories and faculty offices on one part of the site.
The remainder of the site, city officials felt, would be coveted space for a hotel and office buildings because it is only one block from the site of the new convention center, expected to open later this year.
City officials said yesterday, however, that a March 1 deadline had passed and no proposals had been received.
Several knowledgeable real estate sources said the plan apparently failed because it was unprofitable, because the demand for office and hotel space has peaked in the city and because the location is undesirable. The four blocks are bounded by M Street NW, Seventh and Ninth streets and Mount Vernon Square.
"The deal didn't work economically," said one well-known city developer who asked not to be named, adding, "It's in the middle of nowhere."
Lawyer Whayne Quinn of Wilkes & Artis, which represents several large developers, agreed. The city's guidelines "did not ensure a viable economic package. Somebody wants to make sure they will make money before they bid."
David Childs, a senior partner of the Skidmore, Owings and Merrill architectural firm, said developers originally expressed interest in the project, but later backed away.
Childs attributed the lack of interest to a changed downtown market. "The demand and optimism for office and hotel space is not quite at the feverish peak it was before. The real question is about how much space can come on the market," he said.
The high cost of borrowing money combined with a small growth in the office space vacancy rate has made developers cautious, Childs said, because "you can't afford to have a building sit empty."
The project's manager, Floyd Holliday of the D.C. Department of General services, said city officials intend to ask developers to explain the plan's shortcomings. He would not comment on whether he was surprised at the lack of responses.
D.C. Planning Director James O. Gibson, a leading member of the task force of UDC and District government officials that came up with the proposal, has been ill and could not be reached for comment.
Under the city's proposal, a private developer would lease the entire four blocks from the city and then borrow from private financial institutions to build the entire project--including the educational complex. The entire project is estimated to cost about $100 million to $150 million.
The classroom buildings would be built to specifications of UDC officials, and the developer would be required to pay part of the cost of buying desks, chairs, blackboards and other equipment. The city would contribute $2 million for equipment.
UDC would then lease back the educational buildings from the developer. When the developer's lease on the land expired, the entire project would be owned by UDC.
The length of the lease and the annual rents to be paid by UDC were to have been part of the proposals.