Washington land-swap deal fails
Tuesday, September 18, 2007
WASHINGTON: Mayor Adrian Fenty wants to build a firehouse, a library and low-income housing without spending a dime. His plan: Give a half-block of city land to a condo developer, who would pay for the projects in return.
But Fenty's creative financing is not passing muster with all the residents and businesses in the historic Foggy Bottom neighborhood of the U.S. capital. Some are joining with the consumer advocate Ralph Nader in protests seeking to block the move. They complain that they were not consulted and that open bidding for the land would bring in far more than the $30 million the city says it is worth.
"This deal doesn't pass the smell test," said John Kyle, senior managing director at Julien J. Studley, a commercial real estate consulting firm. "The only way to determine if the city is getting a fair deal is to produce a competitive environment that tells you what that property's worth. This process doesn't do that."
The developer Anthony Lanier is in talks with the city to build 200 to 300 high-end condominiums on the property, with as many as 30 percent reserved for low-income residents. The firehouse and the library now on the site may be torn down and rebuilt somewhere else in the city.
Lanier has been hearing from residents unhappy with the plan since the city council agreed in July to expedite the land-swap deal by allowing Fenty to negotiate directly with him.
"I'm arguing with people I've never met before in my life over issues I have no control over," said Lanier, who has sought the property for a decade. His earlier projects in the Georgetown section of the city have included the Ritz-Carlton condominium-hotel buildings, a Georgetown movie complex, and shops along the resurgent M Street commercial district.
The public should have a say in the fate of publicly owned land, residents have maintained.
"We were never included or consulted in this decision," said Asher Corson, chairman of Foggy Bottom's Advisory Neighborhood Commission, a residents' group that proposes legislation for communities. "It just seems underhanded."
Fenty's administration is not backing down. The city plans to seek similar deals with other developers, as it faces an estimated $200 million cost to repair aging schools in the next year. Many libraries and firehouses are outdated, and some are in violation of building codes.
"We saw an opportunity we didn't want to lose," said David Jannarone, director of city development. "This is an example of something we would like to do more."
The deal not only would provide new public facilities but would also increase the tax base and bring a quick and efficient resolution to a process that often gets stuck bureaucracy, Jannarone said.
"There's nothing wrong with the city trying to find a creative way to build its public works through private contracting," said Ellen McCarthy, a former city planning director and now a real estate specialist at the law firm Nixon Peabody. "It's just got to be as transparent as possible."
Transparency is the issue for Corson, of the neighborhood commission and Nader, They are urging the city council to rescind the vote that gave Fenty the authority to negotiate the deal.
On the day of the council vote in July, about 75 people led by the D.C. Library Renaissance Project, a nonprofit group led by Nader and aimed at improving libraries, rallied at the West End Public library in protest.
Since then, neighborhood commissions throughout Washington have passed resolutions against the move and plan to deliver them to the city council when it reconvenes Sept. 18.
Nonprofit groups like the Renaissance Project and Empower D.C. plan to demonstrate at City Hall.
"The city can't get away with this," said Robin Diener, executive director of Library Renaissance Project.
Lanier said he was bewildered by the outcry. He said he submitted the land-swap proposal to the city in 2006 and held more than a dozen community meetings to inform neighbors about his development plans.
"We met with a lot of people in the community, polling their interest," Lanier said. "There was no community opposition, and people welcomed the idea of a refurbished site."
He said building a new firehouse would cost $10 million to $12 million and a library $15 million to $18 million. The city said development might generate an additional $5.6 million in annual tax revenue.
Lanier says he knows firsthand the value of the property. In 2001, the average price for the 161 condominiums that he sold at the Residences at Ritz Carlton, across the street, was $750 a square foot. That was far more than twice the price of the most expensive units built in the Washington metropolitan area during the previous decade, he said.
Kyle said: "This is an extraordinarily desirable piece of property. There most definitely would have been more than one developer interested in bidding on it."
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