WMATA is finally nearing a sale for 3 lots it has been trying to sell for 9 years. The drawn-out saga illustrates how financing struggles and board politics bogged down a real estate decision for nearly a decade. A sale plus DC’s urban design requirements for the area mean that walkable urban buildings will likely finally fill these empty spaces.
The 3 vacant lots are on the 700 and 800 blocks of Florida Avenue NW, on the east end of the U Street corridor. The agency has just put the lots out to the development community for the fourth time in 9 years. Judging by the brief sales window and by developer JBG’s previous hefty offer, I suspect the lots will be sold for a mixed-use development quite soon.
First let’s revisit the past 9 years of ill-fated sales attempts.
The agency acquired the lots decades ago to build the Green Line, which cuts under them as it turns from U Street to 7th Street. The lots have remained vacant, save for weekend flea markets, ever since.
In the 1990s, WMATA considered selling the easternmost lot to Checkers, which likely would have built an asphalt-heavy, auto-oriented drive-thru like their location at 14th and Maryland, NE in Capitol Hill. The deal fell through and nothing was built.
In 2002 WMATA put the lots out for proposals and tentatively set a deal with Howard University in 2003. The university already owns the lot occupied by the CVS and its surface parking lot on 7th Street between Florida Avenue and T Street NW.
These 3 lots are above the Green Line between the Shaw and U Street stations.
Litigation brought that Howard deal to a halt, and WMATA offered the lots again in 2007, this time for a long-term lease. Banneker Ventures LLC, infamous for its park contracts, won that round and aimed to lease the land for redevelopment into apartments and retail space.
The deal with Banneker was ill-fated at best since it appears that DC’s representatives, Councilmember Jim Graham and City Administrator Neil Albert, were at odds over the lease. On the Kojo Nnamdi show, Banneker’s head, Omar Karim, accused former WMATA board member and current Ward 1 councilmember Jim Graham of delaying the project so it could be awarded to another developer. Albert, a Fenty appointee, was supportive of Banneker, which was accused of receiving undue favorable treatment in city contracts.
Leasing rather than selling the land brought in other complications. Some parcels adjoin others and some developers were hoping to combine parcels to create a larger development project. But it’s difficult if not impossible to structure a lease where someone then builds a building half on the leased land and half on adjoining land owned by someone else.
A lease doesn’t require the developer to put much money down, and therefore some, possibly including Graham, feared that as a less experienced developer, Banneker might not ultimately be able to make a high-quality project work. That could either leave the property mostly vacant for longer or result in buildings not worthy of being the eastern end of the U Street commercial corridor.
Finally after multiple extensions, the WMATA Board last year voted to end its engagement with Banneker and the agency put the lots on the table yet again. This time, they structured it as a much simpler “excess property land disposition” process rather than the more complex and collaborative “joint development” process, for either sale or lease. U Street land baron JBG offered WMATA $11.5 million, by far the highest price for the lots.
For esoteric technical reasons, the agency recently determined that in this round, none of the offers were “technically compliant,” and no sale could be completed. (WMATA used a bid procurement process typically used for buying very specific items with no variation; adapting it to real estate is challenging for anything except an outright fee simple sale. WMATA included a standard lease form in its package of bid materials, and a successful bidder would have to meet all bid forms’ criteria precisely with no deviations or risk being disqualified.)
Now, more than a decade after the initial Checkers idea, WMATA is requesting bids again. These will be due May 2, leaving a 3-week window for offers. It’s less likely, therefore, that any new bidders will come in, though the previous bidders might change their offers for this round.
Despite these delays, there is some good news as to what must go on these lots. WMATA’s RFP for the lots mandates a mixed-use development in compliance with the Office of Planning’s DUKE Plan:
WMATA parcels should be developed to include active, ground floor arts and retail with offices and residential above. Preference may be given to projects which include specialty restaurants, a small-format anchor and/or a cluster of retail shops, small clubs, and/or museum uses themed to the African American culture and experience of the district.
For this specific site, the DUKE plan has several requirements which WMATA has incorporated into their solicitation:
- Any tall building must provide a “meaningful cornice” at 65 feet and then step back at a 1:1 ratio above that point.
- The ground-floor commercial or cultural bays must be 14 feet tall, thus creating welcoming retail spaces.
- No parking will be permitted on or above ground.
- All buildings must have zero setbacks, meaning they must be built up to the street-fronting property lines.
The tops of the Green Line tunnels are about 30 feet below the surface, thus limiting the size of any underground garage. Since the lots are with within 900 feet of two Metro stations, any project shouldn’t need a lot of parking.
The DUKE plan requirements mandate design features that create vibrant streets. Ground-floor retail or cultural space, and the fact that the buildings will go up to the sidewalk, are qualities that will enliven the sidewalk, especially at night. Prohibiting above-ground parking will prevent unsightly parking decks and will limit the ability for projects to induce car traffic.
Hopefully, this last round will finally transform these vacant lots into productive uses that enhance, rather than detract from, the area. With Progression Place and the Howard Theatre already in the works, and Howard Town Center just a few years off, these blocks are slated for some much-needed rejuvenation.
The WMATA Board still gets to ultimately approve or reject any winning bids, but this more straightforward process involves them less deeply in specific decisions. Plus, with new Board members less interested in managing details, it’s likely the political fights of last year won’t repeat themselves, and neighbors won’t have to suffer another decade of vacant lots.