CityCenterDC

November 6, 2003

Mayor Taps Builder for Convention Center Site - Washington Post

Massive Renewal Expected Downtown

By Neil Irwin and Yolanda Woodlee
Washington Post Staff Writers

Thursday, November 6, 2003; Page B01

D.C. Mayor Anthony A. Williams (D) plans to announce today that a group of developers led by Hines Interests L.P. has won the right to build a retail and residential complex on the site of the former Washington Convention Center, people familiar with the decision said.

The mayor's announcement, scheduled for this morning, would end a fierce contest between some of the country's biggest developers to build a $700 million project that the mayor envisions becoming a vibrant social center of downtown Washington.

"This site is one of the most important on the East Coast," said D.C. Council member Jack Evans (D-Ward 2). "Now that we're about to have a developer picked, it's time to get going on this."

Sources familiar with the decision said last night that the mayor picked Houston-based Hines over a group led by Forest City Enterprises of Cleveland. The Hines group includes Charles E. Smith Residential, part of a Colorado-based firm that is the largest owner of apartment buildings in the Washington area, and several smaller companies. Its architect is Foster and Partners, a British firm that designed the new German parliament building.

The sources said the mayor chose Hines because of its track record in building architecturally significant projects; the group's apparent understanding of the city's goals for the site; and the team's strong participation by small and minority-owned businesses.

Moreover, the mayor and his advisers considered the Hines group's financial arrangement more favorable to the city than Forest City's.

The competition between potential developers did not include a set price for the land, to the consternation of some critics of the mayor.

But the teams were asked to propose a mathematical approach to valuing the 10.3-acre parcel once more detailed plans for the site are complete and final decisions on what will be built have been made. That valuation would determine how much money is eventually paid to the city.

The mayor's advisers favored Hines's approach because it would, in their view, give the city a greater financial payoff if the project is financially successful and less risk if the project does poorly.

A spokesman for the city's economic development office declined to comment on the expected decision, as did Hines Senior Vice President William B. Alsup III. The D.C. Council would have to vote on the development agreement.

The District requested proposals from development teams in May 2002. Seven groups submitted plans in December, and two finalists were chosen. City officials visited projects built by the finalists and conducted repeated interviews with the development groups.The Forest City team included several members with close ties to the mayor, prompting some council members to express concern that the mayor's team would favor it. Deborah Ratner Salzberg, president of Forest City Washington, did not immediately return phone calls on the expected decision last night.

A third firm, New York-based Related Cos., was eliminated from consideration last summer and has sued the city, claiming it was ruled out unfairly.

The Williams administration has made clear it wants about 300,000 square feet of retail space on the site, as many as 900 apartments and a large public square. But questions remain about what else will be built -- even with the selection of a developer.

Williams is considering proposals to build a public library or a large music museum and auditoriums on the site, in addition to the retail and residential space.