With a deadline looming, word of the latest proposal spread fast through Sursum Corda, a warren of concrete townhouses north of the U.S. Capitol. A group of developers was offering to pay Sursum's poor families more than $100,000 apiece -- double the deal in hand -- to redevelop their land.
On the sidewalk outside the shabby community center, retirees and single mothers who populate the low-income housing complex picked up a sheaf of papers late Monday that offered more details. Many were stunned and perplexed to learn that their property might be worth more than the $25 million they agreed last month to accept from a different developer. The new group says their land is worth $40 million or $50 million. At least. Maybe more.
What began last winter as a desperate attempt to save their homes from foreclosure is suddenly a high-stakes bidding war over one of the few subsidized housing developments in the nation owned and managed by its residents. Handled wisely, the battle between developers could bring Sursum's 169 families more money than most have ever seen.
It's a dramatic transformation for the once drug-riddled complex where a 14-year-old girl was shot to death last year after witnessing a murder. The nearly six-acre property off North Capitol Street lies amid one of the most rapidly developing areas in the nation's capital, five blocks north of Union Station, within walking distance of the newly opened New York Avenue Metro stop and blocks from rehabbed rowhouses selling for a half-million dollars and more.
Now Sursum residents are left to make sense of the competing offers, riddled with jargon about "leveraging equity" and "conditional commitments." Outside the community center, John Turay listened to Shiv Newaldass, a Sursum board member and advocate of the new deal, argue that the latest offer would "use the equity you have already" in Sursum Corda "to give you a new house free and clear."
Turay, a contract specialist with a lilting accent, shook his head.
"Let me go home and sleep," he said, "because I'm confused right now."
Today, the nine residents who make up Sursum's board of directors are scheduled to study the new offer. Under its $25 million agreement with KSI Services Inc., one of the region's largest residential developers, the board has until Oct. 30 to find a better deal.
Some residents believe they have. But several board members, the board's attorney and its hired executive director are skeptical of the new offer, which is funded primarily by a group of developers assembled by Rob Stewart, a managing partner with the JBG Cos., who said he is acting independently of the local real estate firm.
In cooperation with Manna Inc., a nonprofit developer, Stewart and his friends are offering to pay off KSI and manage the property until 2010, when federal housing restrictions are due to expire. At that point, Stewart and Manna propose, they would trade the land to the city in exchange for "free and clear title to $50 million worth of replacement housing in the immediate neighborhood." The Sursum property is critical to the New Communities initiative, Mayor Anthony A. Williams's plan for redeveloping poor areas.
Each Sursum family would get a new home worth as much as $235,000, which it could live in or sell. Or a family could opt out of the arrangement in exchange for a $100,000 payment.
"They would own the new units without debt. And they would presumably get units worth more than what Sursum Corda is worth," said Stewart, who became interested in Sursum Corda after Newaldass contacted a friend at JBG. "The city could then acquire the land, run a competition and redevelop Sursum Corda."
Neither Manna nor Stewart has negotiated such a deal with city officials, however. The board's attorney, Aaron O'Toole, said that raises a lot of questions.
"How can they guarantee half of the things they're promising?" O'Toole asked. "How can they assure there's going to be free housing with no mortgage and no resale restrictions?"
KSI, by contrast, proposes to redevelop the property itself and give each Sursum family $50,000, which could be used to buy a new home on the site at a reduced price. Sursum residents also would be entitled to a small share of the profits on units built for sale to more affluent people, which KSI estimates would amount to an additional $50,000 per family. That second payment is not guaranteed, however.
At least two Sursum board members -- Newaldass, a recent Georgetown University graduate, and Beverly Estes, a longtime resident who until recently was board president -- say they are convinced that Stewart's offer is better if only because he would give them 120 days to shop around instead of the 45 days allowed by KSI. That's important, real estate brokers say, because as many as a dozen other developers are lining up to take a look at the property in hopes of besting KSI's offer.
"Like any real estate transaction, a lot of people will look. Not all will be there at the finish line. But we've just been doing this for a week or so," said broker Jayne Shister, a senior vice president at Cassidy and Pinkard, who is marketing the property to other developers at the request of Stewart, who says he wants to see Sursum residents get maximum value for their land.
On Monday, Estes wandered quietly among the crowd of residents and urged them to compare the two proposals. "Read 'em and see what you like better," she said.
To some, there seemed to be little question.
"One hundred thousand dollars," Rickie Gall said, leaning on a walker. "I could get a three-bedroom."