What would you do if you were offered $800,000 for a condo you bought ten years ago for $120,000 in one of the city’s hottest neighborhoods?
That’s the choice facing 54 homeowners and their families in Logan Circle in the next few weeks, as big-time developer Monument Realty makes a bid for four separate parcels that operate as part of the same condominium association.
You probably know the properties: The plain brick townhouses between Riggs and S Street on 14th Street and clustered around 11th and N Street that don’t quite fit with the large apartment buildings and historic facades around them. The city built them in the 1970s as rental housing, and finally made them available for tenants to purchase in 1998, selling the three and four-bedroom units with backyards and parking spaces for between $100,000 and $150,000. Now 54 privately owned homes, the pieces were consolidated into the Frontiers East and West Condominium Associations, and now help give the neighborhood a modicum of income diversity.
They also, however, represent some of the biggest chunks of re-developable land in the downtown residential core. And now, two developers are vying to buy them all at once, rezone for higher density, and build as much as they can.
Last night, Monument presented its offer to residents. It’s a bit complicated. I’ll try to fit it in a nutshell.
If the 14th Street parcel (“Frontiers West”) were successfully rezoned to allow four stories, owners would get $810,250 for their units, which is 175 percent of the current assessed value. The price offered for the units on the other three parcels on and around 11th Street (“Frontiers East”) would depend on the additional density Monument was able to achieve, putting the payout at between $681,000 and $794,500. The developer would even pay residents $115,000 just for agreeing to sell if the zoning change were allowed, even it weren’t and the sale never went through. If the residents want to stay in the neighborhood, Monument said it could make units available in the new buildings for them.
Sweet deal, right? Here’s the catch: According to how the condo associations were set up, 80 percent of all 54 homeowners would have to vote to dissolve the “master” condo association. And then, each of the two separate condo associations would have to vote unanimously to dissolve themselves. So one homeowner in each of the associations could throw the whole opportunity off for everybody. For its part, Monument could end up getting both, either, or none of the parcels to redevelop. Buying the whole thing would cost around $40 million, but hundreds of new units—-either sold or rented at market rate—-would pay that off in a hurry.
Even though it might be in their economic self-interest to take the money and run, judging from last night’s meeting at the Washington Plaza Hotel, at least a few people seemed too emotionally attached to their homes to leave. Others seemed willing to listen—-and hold out for a better price.
“We’re living on a gold mine!” one resident protested.
“You can live on the gold mine for the rest of your life!” said Monument’s Josh Olsen, whose patience started to erode after several minutes of audience chaos. “You’re not going to get gold out of the gold mine unless you sell!”
The residents were asked to fill out surveys indicating their interest in the offer, and Olsen said he wouldn’t pursue the project unless a majority came back positive. It’s an interesting case: Because of how their associations are set up, each person has the power to singlehandedly forestall a big lurch forward for gentrification. From an urbanist standpoint, that means a few acres of prime land stay underused. On the other hand, it’s difficult to get excited about replacing 54 mostly low-to-moderate-income households of color with yuppies who can afford pricey condos.
Either way, Monument’s suits—-and the other nameless bidder waiting in the wings—-have a real job on their hands.