Developer: Overbuilding “Stymied” Financing of Major SE Residential Project – Seeks PUD Extension
by Larry Janezich
Last Tuesday night, Eric Siegel of Cohen Seigel Investors appeared before ANC6B’s Planning and Zoning Committee, seeking support for a two year extension of the PUD for the first phase of a major residential project in Southeast Washington, saying the company had not been able to get equity partners and debt financing for the project, despite efforts of brokers who had approached some 85 potential investors.
About two years ago, the Zoning Commission approved the construction of the first phase of a planned 673 unit project at 1333 M Street, SE, as a Planned Unit Development (PUD) which would allow greater height and density than would otherwise be allowed. The first phase of the project anticipates a ten story 218 residential unit building.
Seigel offered several reasons why investors had shied away. The project is a mile from Metro, and though Cohen Siegel has proposed a shuttle for the complex that “had not been persuasive to investors.” Cohen Siegel has reached out to the city for a potential remedy which involves raising the Southwest Boulevard, or building a pedestrian bridge over it, which would reduce the distance to an acceptable ½ mile, but that does not appear to be something that could happen quickly. Siegel also cited the lack of proximity to retail, and added that the “3500 units under construction on the Capitol Riverfront and another 2300 in the pipeline have stymied interest”.
Once financing is obtained, the project will be built in four phases, resulting in three buildings – which will appear to be four, but two of them will be connected. The project will include affordable housing units, seven retail spaces totaling about 10,000 square feet, and 214 below grade parking spaces.
The Committee voted 9 – 0 in favor of supporting the PUD extension.
When first proposed in 2010, the project was envisioned as office, hotel, retail and commercial, but the glut of office space in DC resulted in conversion of the project to mostly residential with some ground floor retail.
Cohen Siegel is one of the major players among District developers, and was named in the NPR/WAMU Series “Deals for Developers” in May of 2013 (see here: http://apps.npr.org/deals-for-developers-wamu/). In that series, NPR/WAMU stated that the company had received an $8,800,000 subsidy in the form of an LDA on this project, and had contributed $62,250 to District politicians over the past ten years.