Flawed DGS Request for Proposals for Boys and Girls Club Presents Stark Choices

Department of General Services’ Michelle Chin, at last night’s community meeting on development of the Hill East Boys and Girls Club Building

Flawed DGS Request for Proposals for Boys and Girls Club Presents Stark Choices

25 Year Lease Requirement Skews Selection Process in Favor of Public Financing

by Larry Janezich

At Tuesday night’s community meeting hosted by DC’s Department of General Services (DGS) to hear proposals for development of the Boys and Girls Club Eastern Branch building, community residents were presented with only two choices: affordable units to be constructed with public financing through the Low Income Tax Credit program, and market rate units financed through private equity.  Both plans would dedicate the residential housing to seniors, as called for in the RFP.  At that point the plans diverge dramatically.

The first plan, presented by the Menkiti Group and Dantes Partners, proposes 49 small units in the 600 – 800 square foot range, 10 on-site parking spaces, and a 5,000 square foot space the DGS wants to be set aside for community purposes, but for which the developer has not specified a use.  The plan envisions a modern vertical “pop-up” that sits on top of the extant structure. Dantes Partners president Buwa Binitie says that the building will be 100% affordable housing which suggests that he will finance entirely through the government’s Low Income Housing Tax Credit (LIHTC) program, and this in turn suggests that he was not able to raise any private equity outside of the LIHTC program for his plans.

In contrast, Century Associates proposes 27 market-rate units of various sizes, 16-18 on-site parking spaces, and a remaining community space of 4,200 square feet in which the team plans to put an indoor children’s play space.  The proposal stays within the existing building envelope, a point that lead developer Joel Kelty stressed throughout this presentation.  Since the building is not new construction, there is no requirement that a 10 percent of the units be affordable under inclusionary zoning requirements.  Kelty said last night that if the city provided a longer lease than the current 25 years, he would be happy to work an affordable housing component into his plans.  Otherwise, Kelty said, getting private equity for such a short term lease is difficult.

If this is the case, it raises questions why DGS​ attached the short 25 year lease condition to the Request for Proposals (RFP).  In addition, it was also left unclear whether the Eastern Branch disposition must comply with the new law that all lands disposed by the city for residential development must be at least 30% affordable, since the RFP was issued before the law took effect.  DGS officials offered no definitive resolution of this point last night.

The only point of agreement between the two finalists seemed to be that the unusual construction of the building posed considerable challenges.  According to Kelty, the RFP had elicited scant interest from DC’s developers – contrary to the statement of DSG’s Michelle Chin at the beginning of the meeting who told the dozens of community residents that its RFP had met with “considerable interest.”

It seemed to some observers that the residents who attended last night’s meeting, numbering about 50, favored the Century Associates plan, despite the lack of clarity and a lack of order in the meeting’s proceedings which frustrated attendees.  ANC Commissioner Brian Flahaven underscored his hope that the development for this project would move along in the process, but the starkly different nature of the proposals and the inability of DGS officials to resolve confusion last night led him to subsequently suggest that the ANC might wait until Best and Final Offers were submitted to the DGS before weighing in on the site.  It is likely that the ANC will consider the development at its Planning and Zoning Committee meeting on February 3 and the full ANC meeting February 10, unless DSG asks for Best and Final Offers.  According to a time line announced September 23, 2014, DSG is scheduled to make a final selection in February.  DSG expects the project to take three years to completion.  See CHC posting here:  http://bit.ly/XYrQzf