Donatelli, City Interests present plans for Benning

Washington Business Journal by Jonathan O'Connell Staff Reporter September 11, 2008 Two developers offered dueling plans for 5 acres of city-owned land to D.C. officials and members of the Benning community Wednesday. Despite the dour housing market, D.C. officials would like to see the site become one of the first new transit-oriented housing projects east of the Anacostia River, with 30 percent of the units below market rate. The land is at the corner of Minnesota Avenue and Benning Road in Northeast, walkable to two Metro stations and adjacent to the planned 230,000-square-foot future headquarters of the D.C. Department of Employment Services. D.C. chose the two teams -- CityInterests LLC and a partnership between Donatelli Development and Blue Skye Development LLC -- as finalists in July when it eliminated a bid by Rick Walker, builder of the Brentwood Shopping Center, and the Marshall Heights Community Development Organization. The city asked the teams to show them plans for housing and retail as well as an alternative option for office space tailored to D.C. government use, said Ayris Scales, project manager for Deputy Mayor Neil Albert. Bethesda-based Donatelli and partner Blue Skye Development proposed a project akin to Donatelli’s mixed-use projects in Columbia Heights and Petworth. The team proposed a $110 million project with 435 housing units, 40,000 square feet for small retailers and 426 parking spots. Retail would include a Mocha Hut, the local coffee joint with two Northwest locations, and 10,000 square feet for a sit-down restaurant. “It’s very similar to other properties in the city that our company has been involved in over that last 15 yeas,” Chris Donatelli told the crowd at the Boys & Girls Club on Benning Road. His alternative is a $92 million project with 245 housing units, a 100,000-square-foot office building, the same amount of retail and 284 parking spots. Blue Skye, which was selected by the city in March to build 26 housing units on Hayes Street Northeast, has done $20 million of work in Ward 7, said Bryan “Scottie” Irving, president and founder of the company. Blue Skye also provided construction training and apprenticeship opportunities for local youth. “We’ve been in this neighborhood,” he said. CityInterests presented its plan -- called CityEast -- as part of a larger vision the company has for the intersection, where it owns 8 acres on the southeast corner and has a purchase contract for the northeast corner, which abuts Fort Mahan Park. Chris LoPiano, CityInterests principal, proposed a $183 million plan with two office buildings totaling 300,000 square feet and 92,000 square feet of retail to include a new Safeway grocery store (moved from East River Park shopping center); Colorado Kitchen, the retro-style restaurant that replaced Brightwood; and another restaurant from the creator of Ray’s the Steaks in Arlington. There would be a public plaza featuring art space managed by the local nonprofit Ward 7 Arts Collaborative, 191 units of housing and 190,000 square feet of parking. The company also had submitted a $110 million plan for 372 housing units, 46,000 square feet of retail and about 143,000 square feet of parking. LoPiano said the company had already invested $50 million in the area. “It’s the center of the CityInterests master plan,” he told the crowd. “We’re the developer in the position to do this.” A main difference is Donatelli’s preference for housing and the CityInterests plans for offices. But Donatelli also told the crowd that his project would require neither zoning changes and associated delays, nor a cash subsidy from the city, while LoPiano said his project would require between $13.7 million and $18 million in tax increment financing, debt the city pays off with revenue from the project, at a time when the District is poised to consider a new legislative cap on its debt limit. LoPiano pointed out in an interview that although TIF had been used extensively for mixed use projects like Gallery Place in Northwest, none had been extended east of the Anacostia River where people would like to see similar mixed-use projects. “It’s the same thing -- it’s no different,” he said. “We’re trying to bring the same thing east of the river.”

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