May 19, 2008
Hines-Archstone snags more of prime D.C. site
By Gillian Gaynair, Washington Business Journal (Washington DC)
The District will lease the final parcel at the old convention center site to developers Hines and Archstone, which plan to build an upscale 400-room hotel and 100,000 square feet of additional retail space.
Bounded by Eye Street, New York Avenue and Ninth Street NW, the 10-acre site will be part of the developers' $850 million mixed-use project, to be called CityCenter D.C., the city announced May 12.
The property was once suggested as a location for a new central public library.
The retail portion of the site would encompass the ground, first and second floors of the hotel -- and possibly the sub-ground level too, said Kenneth Mil-ler, senior vice president of Archstone, based in Englewood, Colo.
City officials and developers have long been considering a department store or a large-format retailer, such as a Crate & Barrel, for the site. Discussions continue with Nordstrom, Bloomingdale's and several others.
"This isn't Rodeo Drive," Miller said. "We want to keep it tangible for people working here. At the same time, this is an international city," so visi-tors' interests have to be considered as well.
The price of the developers' 99-year lease will depend largely on what kind of retail is built, a city spokesman said.
Archstone and Houston-based Hines Interests LP, along with Mayor Adrian Fenty, council members and representatives from Washington, D.C. Economic Partnership, will attend the International Council of Shopping Centers' annual conference of worldwide real estate developers and retailers May 18-22 in Las Vegas.
While there, they plan to meet with prospective retailers for CityCenter D.C.
Fenty said he expects a decision on the retail component to come within the next six months.
Meanwhile, the hotel component will satisfy up to 40 percent of the demand generated by groups using the nearby Walter E. Washington Convention Center, said William Alsup, senior vice president of the Hines.
The developers said they are in discussions with several operators.
The new hotel will join the convention center's long-awaited headquarters ho-tel, a 1,150-room Marriott at the corner of Massachusetts Avenue and Ninth Street NW. The Marriott is scheduled to break ground next year for a 2012 open-ing.
Although the final 53,700-square-foot component at CityCenter D.C. had been considered as a potential site for a new central library, Hines and Archstone, under the terms of an agreement with the District, had the first right of refus-al to lease the property from the city if officials decided not to locate a li-brary there.
Late last year, the District completed a land swap with developer Kingdon Gould III, which gave him the parcel on the northeast corner of the site.
Gould is preceding with his own development plans, which must be consistent with the master plan.
Plans for CityCenter D.C. provide more than 350,000 square feet of retail; more than 670 apartments and condominiums, including at least 134 units of af-fordable housing; and 465,000 square feet of office space.
The project will also have a plaza area and a half-acre public park.
The development team is expected to break ground on the project by the second quarter of 2009 and is aiming to complete it by 2011.