When upscale restaurants and apartments arrived on the 14th Street NW corridor, several nonprofit groups cashed in on their valuable real estate and left. Central Union Mission sold its landmark building in 2013 and moved its homeless shelter near Union Station. Martha’s Table plans to ditch its Northwest headquarters for Southeast Washington.
But Whitman-Walker Health, the District’s largest community-based provider of HIV services, is trying something different: Staying on 14th Street and entering the upscale real estate game.
In a unique partnership, the nonprofit organization is teaming up with a developer to transform its massive Elizabeth Taylor Medical Center into a retail space and upscale apartments. The property, between R and Riggs streets, is one of the largest and most valuable development opportunities remaining on the booming corridor.
Fivesquares Development will finance the $100 million redevelopment project and become co-owners of the property.
Whitman-Walker didn’t reveal Fivesquares’s ownership stake, but said the health center retains a majority ownership.
“If you sell it, you get a big chunk of money, and that’s great, but it runs out,” said Naseema Shafi, deputy executive director of Whitman-Walker. “What we wanted to do is create something that has more financial longevity.”
The 14th Street corridor was once known for prostitution and crime. Its dramatic shift is emblematic of the wealth that has poured into much of the city and transformed many neighborhoods.
Whitman-Walker relocated most of its services out of the Elizabeth Taylor Medical Center in 2015 to a building that it rents a few blocks south on 14th Street. Some services, including its research and legal departments, remain. Those offices will move to a temporary space in August as crews prepare for construction.
Whitman-Walker will have a cultural community center on part of the ground floor and office space on the second floor of the new building. The six-story building will have retail space on the ground level and four floors of apartments consisting of 84 rental units, 18 of which will be below the market rate.
Ron Kaplan, a principal at Fivesquares, said two of the three existing buildings on the property — the Elizabeth Taylor Medical Center and a former parking garage that was converted into a building — are considered historical and will be preserved, while the other will be torn down.
The new building will be constructed around the two preserved buildings, although each building will connect. Kaplan said construction would start in November and is slated to be completed in summer 2019.
“It’s interesting that nonprofits initially find themselves on the less expensive edges of the key core markets in the city, which is what 14th Street used to be. Then they find that the land there is their most valuable asset,” Kaplan said. “Too often what happens to them historically is that there has really only been the option of them selling that property in order for them to access that value.”
Real estate, Shafi said, has long been central to Whitman-Walker’s identity. When the AIDS epidemic struck the District in the 1980s, many of Whitman-Walker’s patients donated money and property to the center upon their death.
At the time, Whitman-Walker used these homes as hospice centers, later renting or selling most of them in tough financial times.
When the center opened in 1973, it served an entirely gay clientele, but now nearly 40 percent of its patients identify as heterosexual, according to 2014 data from Whitman-Walker. Still, the nonprofit group wanted to remain on 14th Street in the heart of the city’s gay community, while maintaining a smaller facility in Southeast.
“It’s through that real estate over time that we were able to stay in good financial standing, through that generosity and sacrifices of them and their families,” Shafi said of Whitman-Walker’s former patients. “Leveraging the real estate values in Northwest to help our services in Southeast is part of continuing that mission.”
Eric Shaw, director of the D.C. Office of Planning, urged developers to think beyond restaurants and apartments for the mixed-use space. He noted the finished development will contain an outdoor public seating area — the only such space along the 14th Street corridor.
The property includes a parking lot on the corner of 14th and Riggs streets that Whitman-Walker and Fivesquares painted with a bright mural. The organization has hosted community events in the space over the summer, but will stop after construction begins.
“We saw a lot of potential early on, on how you can better utilize the wide sidewalks,” Shaw said. “When the [developers] came in and talked to us, we said this is an opportunity that you definitely should exploit. Mixed-use isn’t just restaurants and housing. The expectation and hope is that we are continuing to understand that it’s also institutional, cultural and medical.”