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This story was updated with a statement from the housing authority.
Something stinks at the DC Housing Authority, and it isn’t the moldy units they’ve neglected to maintain.
For the past six years, DCHA has been trying to renovate its headquarters at 1133 North Capitol Street NE. To the frustration of some DCHA board commissioners, the project on a valuable piece of property in the middle of NoMa has languished in negotiations—until now.
This week, the DCHA Board of Commissioners voted 6-5 on a resolution approving the long awaited redevelopment plan. But the proposal is quite a bit different from the original idea and leaves several questions about the future of DCHA’s headquarters unanswered.
Under the new proposal, a trio of developers will pay DCHA $67 million for a 99-year lease on the land where its headquarters sits, according to the resolution; they plan to build housing on the site. The estimated total taxable assessed value of the land for 2020, according to the D.C. Office of Tax and Revenue, is about $80 million, an increase of about $6 million from 2019.
But rather than renovating its current headquarters, as DCHA originally wanted, the housing authority will pay the development team $14 million to lease back its own headquarters, the resolution states. The terms of the “leaseback” are unclear, and the resolution says the Authority will eventually move to a new location on DCHA-owned property. But the cost of relocating, whether the Authority will need to build new headquarters, and even where it will go, are also not spelled out in the resolution.
DCHA’s original request for proposals in 2014 also called for a separate customer service center as well as at least 210 units of affordable housing to be built on the land. At least one-third of those units were to be reserved for very low-income residents who make 30 percent of the area median income (AMI) or less, according to the original RFP.
That same requirement is spelled out in the land deed from 2007, when the District transferred the land to DCHA, but that’s changed under the new plan, too.
The separate customer service center is gone from the resolution the DCHA Board approved this week. And the new plan calls for “no less than 200 units” of affordable housing, but only stipulates that “20% of any residential square footage” be reserved for those earning 60 percent of AMI. Gone are the 70 deeply affordable units.
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The 2014 RFP acknowledged the “significant revitalization” of the surrounding area, known as NoMa, including the construction of a Metro station at New York and Florida avenues NE, which opened in 2004.
“The Site is one of the few significant properties untouched by the revitalization of the area,” the RFP states. “DCHA believes the Site can be redeveloped to better suit its organizational purposes, better serve the neighborhood and result in positive financial returns to the Authority.”
The group of developers who have been in talks with DCHA since at least 2014 include MidAtlantic Realty Partners LLC, CSG Urban Partners, and Taylor Adams Associates, which counts David Jannarone as a managing partner. Jannarone is a former development director under Mayor Adrian Fenty and used to work for the Deputy Mayor for Planning and Economic Development.
His firm, in partnership with MRP, recently received a $16 million loan from the Housing Production Trust Fund despite the fact that their proposal was ranked dead last, 20 out of 20. A whistleblower filed a complaint about the questionable award, alleging political favoritism.
Jannarone did not respond to an email seeking comment. Efforts to reach Robert Murphy of MRP and Simone Goring Devaney of CSG were unsuccessful.
According to the resolution, the development team agrees to hire at least 65 low-income residents to work on the development and management phases of the project. The developers also agree to kick in $100,000 for job training, according to the resolution, and $400,000 into a fund DCHA will use to “fund affordable homeownership opportunities at DCHA development sites.”
Before DCHA reached an agreement with the development team, some DCHA commissioners expressed frustration and skepticism during their two previous meetings in October and November. It had been five years since DCHA’s original request.
“I want an answer to my question about why it’s taking so long to do this and whether the original intent and desires and requirements of the RFP are still in tact,” commissioner Bill Slover said during the October 2019 meeting.
DCHA executive director Tyrone Garrett acknowledged in that October meeting that the project was taking longer than anticipated. In thinking about DCHA’s “transformation plan,” which includes addressing the up to $2.5 billion worth of neglected maintenance and capital improvements to the Authority’s housing stock, Garrett said “we realized that the value of this particular asset is more valuable in terms of not just cost, or not just dollar value, but how we could realize and leverage the property in so many different ways to help us with our transformation plan.”
(Garrett testified this past spring that DCHA needed $343 million to address immediate lead and environmental hazards.)
At the DCHA board’s November meeting, Slover suggested the board vote to halt negotiations with the development team that they approved back in 2017, and start all over.
Garrett responded that he was in “active, open negotiation with the developer right now.”
DCHA board chair Neil Albert, an appointee of Mayor Muriel Bowser, cautioned against Slover’s proposal. He suggested instead that DCHA be allowed to continue negotiations.
Albert is the president and executive director of the DowntownDC Business Improvement District and served as the city administrator and deputy mayor for planning and economic development under Fenty.
Commissioner Dyana Forester then pointed out the significant development surrounding DCHA headquarters since it issued its original request.
“Do we think that the market has improved and it might be more beneficial for us to say that ‘we’ve been working through with you all for the past five years’,” she said in November. “‘There is not an interest for you all to move this forward. We want to put this back out into the world.’ I mean maybe to hear from other folks.”
That sounded like a great question to John Falcicchio, the current interim deputy mayor for planning and economic development, and an ex officio DCHA commissioner. But he suggested putting off an answer until the board’s next meeting.
“My other question would be how long would it take us to re-solicit it?” said Falcicchio, who also serves as Bowser’s chief of staff. “So housing is a priority. So getting more housing units is a priority but also getting money that we can invest into our properties is a priority. So if we’re going to take an 18-month or a two-year process to find another partner, well that doesn’t really do us any good either. So, I think that’s all the questions that we need to get answered without voting on this right now.”
At this week’s board meeting, Slover and Forester, who both voted against the resolution, continued to raise concerns about the questions left unanswered in the resolution.
Where will DCHA’s new headquarters go? How much will it cost to relocate? When it’s all said and done, will DCHA spend more than the $67 million it’s getting in the deal? And what happened to the deeply affordable units?
Update from the DC Housing Authority:
“The Board of Commissioners of the District of Columbia Housing Authority approved the first step in the redevelopment of DCHA’s headquarters, located at 1133 North Capitol Street, N.E., the execution of ground leases. We are excited to see movement on this front.
This project will yield over 200 units of affordable housing—triple the amount originally slated for this site—in the thriving and centrally located NoMa neighborhood, create over $135 million of CBE (Certified Business Enterprise) participation dollars, hire no less than 65 Section 3 participants, and will fund $1 million for an affordable home ownership development program (jointly contributed by DCHA and the development partner). Lastly, this project will generate significant value to be used by the authority to support its mission and develop a new headquarters at a different DCHA-owned site.
We look forward to moving expeditiously in introducing much needed affordable housing at this site, enabling us to prioritize quality housing options for current and former DCHA customers, including those from Northwest One (Sursum Corda/Turnkey, Temple Courts and Sibley Town Homes residents).”