Developers and D.C. officials have failed to meet a six-month deadline for sale of the Portal site in Southwest Washington, signaling an apparent failure of the city's ambitious effort to end costly and sometimes critical delays in getting lucrative redevelopment projects underway.
Both sides yesterday downplayed the effect of the missed 180-day deadline, which the agency had imposed with fanfare six months ago in what RLA said was an attempt to generate more money for the city treasury through quicker land sales and to force developers to build more promptly.
Housing director Robert L. Moore, who has been handling the land negotiations, said RLA will be asked at its Oct. 4 meeting to grant a 60-day extension of the sale deadline. The original 180-day period expires today.
It was unclear, however, whether the second deadline can be met, since both sides acknowledge that they are only in the preliminary stages of price negotiations. "We're just at the opening salvos, and there are a whole lot of issues," Moore, who is also an RLA board member, said yesterday.
"We are doing the best we can in a tough market," he added. "We are working much faster than we ever have before. This is the first time we have made an award and negotiated the price in the same year."
In the last four years the RLA has awarded rights to redevelop four major tracts of downtown, city-owned land. No winning developer has yet actually purchased his land, and in one case, the Metro Center project, failure to reach agreement on a land price led the board to take the track back. That dispute, now in court, has brought the Metro Center project to an indefinite halt.
Board members were determined to avoid those kinds of problems with the 10-acre Portal tract in Southwest Washington, their last major downtown parcel. In February, when they were considering the competing bids for the project, they made the developer's ability to promptly purchase the tract a major consideration.
After choosing Banneker Associates, a group including well known developers Melvin Lenkin and Theodore Lerner, attorney William Harris and architects Vlastimil Koubek and Louis Fry, the city had them sign an agreement saying they would comply with the deadline or face possible monetary penalties.
The delay in reaching a sale agreement involves a number of issues and appears to be the fault of both sides. RLA has not moved to invoke the monetary penalties.
One of the first delays was encountered after a panel of architects working for RLA told the developers to change project plans that had already been approved by the federal Fine Arts Commission. The city caused another delay when it did not receive its land appraisals until August, a month before the deadline. The appraisals establish the price the city will ask for the land.
Meanwhile, Banneker Associates told a community group in an Aug. 31 letter that the purchase deadline would be missed because "a tremendous amount of technical issues have surfaced." They said the $40 million they had originally offered to pay for the land at the foot of the 14th St. bridge was no longer a feasible price because they were faced with "several costly items" such as moving a storm sewer line that ran through the property, and moving a station where the federal government unloads coal for a nearby heating plant.
Moore said the developers are still negotiating with the federal General Services Administration on the issue of moving part of the plant and building over the remainder. Whatever agreement they reach may need congressional review, and meanwhile the city and the developers must still determine who will pay for the removal of the station.
In addition, the developer must negotiate with Conrail to build over the railroad track that runs through the site. The outcome of those negotiations will affect the price the group can pay for the land.
At the same time, Banneker Associates has lost two of its major prospective Portal tenants, Comsat and the Urban Institute, which had been expected to occupy a majority of the office space in the proposed $355 million office and hotel complex.
Banneker won Portal in part because it told RLA it had tenants committed for more than half of the space and therefore could start and finsh its project faster than its competitors. It was later learned that the developers had secured general commitments but not binding lease agreements.