Unable to persuade Congress to pay for building a downtown campus for the University of the District of Columbia, city officials have come up with a plan to get private developers to build the college at no cost to the city.
The city wants to turn over half the UDC site at Mount Vernon Square to private developers and let them build a hotel and offices on it. In return, the developers would have to put up a $40 million classroom complex on the other half of the land for use by UDC.
"If it works, we've got ourselves one hell of a deal," said D.C. Planning Director James Gibson, one member of a task force of UDC and District government officials that came up with the proposal.
The city has started looking for a private developer to take on the job and has asked builders to submit proposals by Jan. 8 for developing the four-block-square UDC site bounded by Seventh, Ninth and M streets and Mount Vernon Place NW.
Now four vacant lots, the UDC land is directly north of the recently refurbished Mount Vernon Square Library and about a block from the new D.C. Convention Center.
For years, UDC has talked about building a downtown campus on the site to house students and faculty for whom there is no room in UDC's just-completed campus on Connecticut Avenue at Van Ness Street.
Congress has repeatedly refused to finance the downtown campus. UDC's enrollment projections don't justify the additional buildings, congressional critics have complained. Instead, they've urged the city to sell the UDC site for private development that would increase city tax revenues.
Persuading a private developer to build the college complex would solve the problem of paying for the classroom buildings and would put the site back on the tax rolls, Gibson said. At the same time, he added, the plan would encourage development in one of the city's poorest neighborhoods and provide UDC with a long-term income source.
City officials hurriedly briefed congressional committees on the plan yesterday, after The Washington Post began making inquiries about the never-before-disclosed proposal. Neither the chairmen of the House and Senate District committees nor their staff aides could be reached for comment.
Gibson said city officials have had some preliminary talks with developers that indicated the plan is financially feasible.
Financial details of the UDC project would have to be worked out in negotiations between the D.C. government and private developers. Based on interviews with Gibson and UDC officials and the city's official request for proposals, here is how it might work:
The four-block campus site would split in half down Eighth Street NW, which would be closed to become a pedestrian mall.
The east half, along Seventh Street, would be used by UDC for a 300,000-square-foot educational complex with 80 classrooms, a cafeteria, laboratories and faculty offices. UDC's colleges of business and public management and education and human ecology would occupy the buildings.
The private developer would build the college quarters to UDC specifications, which detail everything from the size of the professors' offices to the type of toilet-paper holder in the restrooms, and would give UDC $2 million to equip the facilities.
The west half of the site, facing Ninth Street, would be turned over to the developer for use at its discretion. The land is zoned for hotels and office buildings with a maximum height of 90 feet. Gibson said city officials estimate that $100 million to $150 million worth of buildings could be built on the land.
The plan calls for the District to lease the entire four-block tract to the private developer for a fixed number of years. The developer would find financing and put up all the buildings with private funds, then lease the classrooms back to UDC.
Gibson said the rent paid by UDC for use of the classrooms is expected to be less than the rent the developer pays the District for the land; the developer simply will deduct the UDC rent from what is owed the city and pay the difference in cash.
The developer will have to pay property taxes on the hotel and office buildings, providing additional tax revenue for the city and thereby addressing one of Capitol Hill's big complaints, Gibson said.
Taking advantage of new real estate tax changes just passed by Congress, the developer would be able to claim substantial income tax deductions for the hotel and office property and for the classroom buildings.
When the developers' lease on the property expires, the entire project -- classrooms, hotel, offices and all -- will be turned back to UDC. UDC would then own a paid-for campus as well as an office and hotel complex that would produce income for the college. The arrangement is patterned after one used successfully by George Washington University to develop office buildings on its land in Foggy Bottom.
The length of the lease and the annual rents to be paid by UDC and the developer will be among the criteria city officials use in choosing a developer for the project. The developer's experience and financial strength, the project budget and the role of minority investors in the project will be among other considerations.
The District's Department of General Services put out the request for proposals last week, and the agency hopes to be able to choose a developer within 60 days after the Jan. 8 deadline for submitting proposals.
The choice of a developer for what is potentially a $200 million project will be made by the Department of General Services, rather than the City Council, Gibson said.