The team would then pay to build the stadium and receive a series of tax breaks worth around $50 million to lessen the cost of completing and operating the stadium.
In recent months the replacement of the Reeves Center with high-end housing became one of the deal’s biggest sticking points, with some residents and members raising concerns that U Street businesses could suffer from a lack of foot traffic in the corridor should there be no office space on the Reeves Center site.
Advocates also have raised concerns that the District was not getting fair value for its properties.
In negotiations with City Administrator Allen Lew in recent weeks, Akridge made concessions aimed at addressing both concerns.
For redevelopment of the Reeves Center, Akridge agreed to attach four development covenants to the property. One would require that Akridge include between 100,000 and 150,000 square feet of non-residential uses in the project, such as retail or office space. The entire project could total 525,000 square feet.
The redevelopment would also include 3,000 square feet of space available to the public for community events such as farmer’s markets. Akridge also agreed to develop the property according to green building standards and to hold at least one community forum to solicit input on the redevelopment.
Modifications to the deal also include three new protections to the District. One would return the Reeves Center to the District and the Buzzard Point land to Akridge if something went awry with plans for the stadium and D.C. United’s land lease was terminated.
A second prevents Akridge from flipping the land to another company before redeveloping it. A third change grants the District the right to either extend or terminate its temporary lease with Akridge at the Reeves Center while it determines where to relocate the operations there.
Matthew J. Klein, president of Akridge, said he agreed to the changes after hearing more than 20 hours of feedback from D.C. residents at a series of round tables and forums during the fall. “We wanted to make sure that the community knew that we were listening,” Klein said.
In testimony submitted to the council, Lew said the changes would further protect the District from risks associated with the deal.
“If we compare the risks in this transaction to those present in the Nationals Ballpark or the Convention Center deals, both of which are viewed in hindsight as highly successful endeavors, the risk in this transaction is far less than the risk in those situations,” Lew said.
Because the value of new housing on U Street outpaces that of office space, the requirement for commercial space likely means a financial hit for Akridge. The company would still pay the same amount for the property, though a just-released analysis of the deal suggested the District would incur a loss on the land deals of $25.7 million.
Klein said he had not read through the entire 406-page economic analysis, released Wednesday morning, but that he had seen some errors in its valuations and that the city was likely to see a boost in economic activity on U Street regardless because only about 200,000 square feet of the dated Reeves Center can even be occupied — only slightly over one-third the size of what Akridge plans to build there.
“That on its own is a tremendous density pop, which will bring economic value to the District,” Klein said.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz