We know D.C. Get our free newsletter to stay in the know.
Influential D.C. developer Geoffrey Griffis, who worked with infamous landlord Sanford Capital to devise a controversial redevelopment project at the Congress Heights Metro station, is denying that his company promised to use its “political connections” to advance the project. Sanford’s principal wrote in a September letter to his investors that Griffis’ company believed it could use such connections to move forward on redeveloping the properties, which are mired in a protracted legal battle with the District.
In a statement to City Paper on Thursday, Griffis, who owns and manages Adams Morgan-based development firm CityPartners, said his company made no promises to benefit the project in this way. He is an appointee of Mayor Muriel Bowser‘s to the National Capital Planning Commission and previously chaired the D.C. Board of Zoning Adjustment. Former Mayor Adrian Fenty also unsuccessfully nominated him to the powerful D.C. Zoning Commission.
Griffis says he only recently saw Nowell’s letter, and “played no role in its creation.” He adds that Nowell “mischaracterizes communications between CityPartners and Sanford Capital regarding the Congress Heights Metro site” in the letter. “While CityPartners certainly has expertise in local politics, it never promised to use any ‘connections’ to further the project,” says Griffis.
City Paper has reached out to Nowell for his perspective, and will update this post should he respond.
As City Paper reported this week, Nowell wrote to his investors that “we are currently working on a contract to sell the property to CityPartners, who helped us through the PUD process as they believe that they can use political connections to get the project back on track.” He was referencing a special zoning action called a planned unit development that a joint venture of Sanford and CityPartners received approval for, in 2015, from the Zoning Commission. The PUD proposed more than 200 units of mostly market-rate housing plus office and retail space above the Metro station.
Nowell sent the letter in September, and it became public through the discovery process in D.C. Attorney General Karl Racine‘s ongoing litigation with Sanford and CityPartners, among other internal communications between Nowell, Griffis, and their lawyers. Racine sued Sanford in January 2016 over ramshackle conditions at the properties, which contain 47 units, and the redevelopment stalled.
The remaining tenants occupy only a dozen of these units. Although CityPartners has promised to let the tenants return to the redeveloped project or pay them to leave, they do not trust the company and fear being pushed out of their homes. They want to work with a nonprofit developer, NHT-Enterprise, and create about 200 units of affordable housing at the site while the surrounding neighborhood sees major development, including at the St. Elizabeths East Campus.
Earlier this month, CityPartners issued the tenants required notices under D.C.’s Tenant Opportunity to Purchase Act, a 1980 law that allows renters to buy the buildings they live in when landlords try to sell or demolish those buildings. The company says the “fair market value” of the properties is $7.5 million, or about three times what Sanford Capital paid for them in 2009 and 2010. The tenants must meet that price to fully realize their TOPA rights.
In December, NHT-Enterprise and the tenants offered Sanford—then still the owner of the properties—$3 million as part of D.C. Superior Court-ordered negotiations that were supposed to be “exclusive.” But as the documents that Racine’s office unearthed via court show, Sanford and CityPartners were quietly discussing a transfer of the properties around the same time.
On Dec. 27, CityPartners obtained the properties through deeds in lieu of foreclosure after acquiring the mortgage debt that Sanford had had on the properties with EagleBank and Revere Bank. The developers argue that the transaction is exempt from TOPA because it was not a “sale” and did not run afoul of the court’s order, issued in November.
“CityPartners must be able to honestly and substantively state we have made a clean break from Sanford Capital,” Griffis wrote to Nowell in an email on July 31, when the two developers were considering a bankruptcy sale to transact the properties. (Bankruptcies are also exempt from TOPA.) “Whatever we structure and represent to Bankruptcy Judge must be truthful and will be public fodder for potential negative reporting.”
Griffis’ company has received millions of dollars in D.C. subsidies through land deals and tax incentives over the past decade or so. Its projects include the Wharf, the Hyatt Place National Mall, and the Hilton Washington.
Griffis says he wants to make the Congress Heights site “a world-class development, enhancing the safety of the neighborhood and its sense of community.” He adds that the company has recently funded a court-installed property manager called a receiver with $80,000 to help renovate the dilapidated buildings.
At Racine’s request, Superior Court Judge John M. Mott ordered the properties into receivership in September. The receiver has determined that the properties need more than $2 million in repairs to bring them up to code. The parties to the lawsuit appeared in court on Wednesday.