Monty Hoffman is finally breaking ground on the biggest project of his life.
Hoffman, chief executive of PN Hoffman, has been planning a redevelopment of the Southwest Waterfront for more than eight years. Construction on the first phase of the $2 billion project, called the Wharf, is set to begin March 19 and include four blocks of new buildings, 150 boat slips, a movie theater, three piers and 20 restaurants, bars and cafés, including a jazz club, a piano bar, a country-western bar, an Irish pub.
Hoffman and his partner, Madison Marquette, also plan to build a 6,000-capacity concert hall by the owner of the 9:30 Club and to decorate the Francis Case Memorial Bridge with an LED lighting display.
Once this is all built, what kind of a place is this going to be?
Washington doesn’t have a place like this yet. We’re not copying anything. While we’ve gone to all of these places, we’re taking all of those ideas and fitting them into Washington D.C. DNA. So you take parts of 14th Street with best in class restaurants and everything that is organic about that. We’ll have that as a large element here. This will be the first time when you can actually stroll from restaurant to restaurant, go into a jazz club or movie house and literally be right on the water. It’s a romance that the city currently does not have. We intentionally made spaces that are not too large — they’re a little crowded, they’re a little messy. They’re human-oriented and it’s all geared toward the pedestrian experience. Even the office spaces — they’re not the big, fat office buildings of the past.
You will have people coming by car and by foot and by Metro, but how can people also come by water?
You have thousands of recreational boats in the area which are starving for interest points to tie up to. Tony and Joe’s [the Georgetown restaurant] does really well, possibly I think by default since there’s no real slips out there and people regatta up. This will be a case where we have a day boat area over by the fish market where you can go by the area or you can stay the night. You can camp there effectively. Think of it almost as a boat parking lot, where you can go for a few hours at a time. So we think we are going to capture the recreational boater that will want to be able to come in here, have lunch, have a beer, have dinner and then take off, or stay the night. I think it’s important to look at this as a water network that we can tie to Georgetown, to the baseball park, to Old Town and to National Harbor.
We have parts of the Yards project in Southeast built, part of National Harbor built, where does this fit in among them?
It’s sort of in the middle between the Yards and Georgetown. There will be five points of interest where you can go to. Having a boat on the water is one thing but you need places to go and things of interest. This is one case where the buildings and the restaurants and the retail will be pushed up against the water — they will be 60 feet off the water — and then the restaurants spill out onto plazas next to the water so it’s real inviting, and that’s the whole point. We designed it from the water towards the land, not from the land towards the water.
Take me through a little bit of the history. You won this project in 2006 from an agency that no longer exists, with a partner (Streuever Bros.) that is no longer in business. What were the darkest, hardest moments?
It was very lonely. We knew, or I knew, through all of it that having a mile of shoreline in the nation’s capital within walking distance to the National Mall was just so special that we had to hang on to it, I had to hang on to it. If this would have been a lesser area, I would have let it go.
Was there a time when you thought, ‘This is just not going to happen. I’m going to have to walk away’?
No, I had others actually questioning my confidence on it, and [asking] ‘Are you sure you want to do this?’ early on when I was $4 million into it, of my money. And then, $5 million and then $6 million and it kept growing. I lost my partner. The city was fighting over who was going to control it on the local end. And then we had the federal government fighting with the local government over site control issues. And then the Army Corps of Engineers pushing back on the water side. Clearly you have moments of doubt. But I felt the site was special enough to hold onto it.
What did PN Hoffman, your company, have to do to keep this project alive?
I had to operate at a deficit for the last five years. Most people don’t realize that. I had to keep senior people on staff. Keep our unit together through all of that, and the only way I could do that was to continue investing in the company for the long term.
The last time the Southwest Waterfront was developed allowed the creation for all these long-term leases…
The long-term leases occurred in about 1972, and that was part of one of the aspects of inertia that we had to work through, which was the scars of urban renewal. Pre-1955, 1960 this was a very active neighborhood and a working port, where goods were brought in and out and the like. Of course, that became antiquated to the railroad which became antiquated to the truck, but there still remained a neighborhood here. In the dark days of urban planning, urban renewal was a new way of thinking in which the federal government clear cut almost 400 acres of land, which was the Southwest Waterfront. That’s when Brutalist architecture came in and other types of land planning primarily based on the car. Everything was automobile-centric at that point in time. That’s when the highway came in, and some of the main roads.
Do the bad memories from that make your job harder here?
Well what people were concerned about was, ‘Ok no not again.’ And so everybody was resistant to change and I think politics wanted to leave it alone. It was sort of a lightning rod without an upside — no one wanted to put much investment into it. These long-term leases occurred in the 1970s with Channel Inn, and Hogate’s [restaurant] and Phillips [restaurant] and others. Those were 99-year leases.
So you had to go in and negotiate deals with all of those leaseholders?
I had to negotiate with them in order to have one, unified master plan that wouldn’t be compromised. We went for all or nothing from the very beginning.
How many of the operators on the waterfront today will have a presence in the new project?
Capital Yacht Club, which is the oldest tenant here, since 1890, will enjoy 72 slips in the center between 9th Street and 7th Street, and we are building a new clubhouse on the water for them. Jenny’s [Asian Fushion restaurant], we’ve invited them to have a restaurant in the new development. We’ve offered to Phillips and others but I understand Phillips is planning to move to L’Enfant Square somewhere.
The fish market is coming back.
Yeah because we want to be accretive to their business and help them to be successful. Cantina Marina, we’re looking to work with them we really like what they’re doing. Everybody from them to Bufus [who runs King Rib barbecue stand], who is the barbecue guy out in the street here. We love Bufus. He’s still here and he’ll always be here.
Tell me what it was like selling this project to investors.
We had a lot of attention, I think because of the real estate recession. Much of attention was under the misconception that it was an opportunistic investment, and it’s not. My partner, Madison Marquette, and us have placed $65 million into the project and we were looking for a partner to augment the money that we were willing to keep in and we will be keeping in. So we began a look domestically and foreign. We did go to China.
What was the reception like in China?
They’re new at capitalism. Their ideas were a little different than ours. Recognizing how important this is to the city and the fabric and the nuances of it, it was essential to have a partner sophisticated, grounded and long-term in terms of their approach and outlook. And we couldn’t find a right fit with some of the interested parties out in Asia. My partner, Amer Hammour [chief executive of Madison Marquette] has been to Malaysia, and to Abu Dhabi and several Middle Eastern as well as far eastern countries, and so our net was planetary to find that right fit.
Why do you think there is so much interest abroad in American real estate right now?
First we’re a stabilized country with laws that people can rely on. We’re the largest economy in the world, number two, and I think in particular Washington, D.C. is one of the strongest markets in the country. And there’s a comfort with proximity to the Capitol and the White House. Most countries, the capital of that country is its strong cities. Look at Paris, look at London, look at Beijing. You could look at almost any country and the capital is the strongest — and they perceive that, ‘Ok if we’re coming to the United States, New York and then Washington, D.C.’ I think we get a little bit of a lift with that.
Can you tell me about some of the environmental and energy features of the project?
You have a co-generation plant that uses natural gas to produce electricity for all the underground parking, which is substantial. We are also using solar, which will be on top of the penthouse roof, which will produce electricity for the bridge that we want to light up, as well as a lot of the public areas. We are also using a great deal of LED lighting technology.
How about storm water retention?
We have a cistern system that goes all along the edge of the underground parking and goes underneath the Wharf itself, and that allows us to retain about two inches of rainfall coming down. It’s the most elaborate, largest capacity system in Washington, D.C. It captures all the rain water. And then that rainwater gets recycled to cooling towers and irrigation systems through the project.
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