Passive Progressive: Insurance philanthropist has a grand development concept but no plans

Developers hungry to land Hine Junior High, one of D.C.’s most prime now-closed schools, faced a packed audience of Capitol Hillers last week. They filled the seats and lined the walls of Tyler Elementary School’s auditorium to see the song-and-dance otherwise known as proposals-and-drawings.

Three of the four development groups delivered elaborate plans. One presented broad boulevards loaded up with the likes of trendy eateries Sweetgreen and BGR: The Burger Joint. Another promised a fancy boutique hotel with a restaurant by Belgian/French cook Robert Wiedmaier, the 2009 Rammy Chef of the Year. The third showed off a huge space for the Shakespeare Theatre Company and an almost all-knowing attitude about historic preservation.

The fourth offered up green blobs.

The plan was literally an image of Hine’s square block, located by 7th and Pennsylvania Ave. SE, with puddle-like formations on top.

“We’re not developers, and we don’t have architectural plans,” said Paul Yandura of Scott+Yandura Consulting, the group charged with presenting the proposal June 10.

Yandura’s firm, however, has something the others don’t have: a billionaire backer who wants to offer cheap rents to nonprofits.

The concept behind the blobs is what developers are calling the National Leadership Campus (NLC): a mix of do-good groups, subsidized residences, and extended-stay housing for the nonwealthy. The impulse behind it, according to Yandura, is the high cost of space in D.C., which too often pushes away local groups. That “hurts diversity,” he said, “especially recruitment of black and Latino leaders.”

Peter B. Lewis, chairman of Progressive Corp., the auto-insurance giant, is the deep pocket behind the concept. He has two partners: his son Jonathan Lewis, a Miami-based consultant, and local developer Ben Miller of Western Development Corp., the group behind Chinatown’s Gallery Place. Yandura said at the meeting that “80 percent” of the funding is already locked in.
“How do you know you have 80 percent of funds, if you don’t know what you’re building?” one member of the audience asked during a Q&A.

Yandura’s partner Marsha Scott stepped up to the central microphone to explain, saying that Lewis was very, very wealthy and over the years had donated $50 million dollars to various projects.

She misspoke.

“Add a zero to the 50,” she countered after completing her statement and returning to the line of developers behind the mic. “It was actually 500.”

Yes, all those lofty insurance premiums have made Lewis a rich man. He has donated more than $220 million to Princeton University, from which he graduated in 1955. He’s also contributed heavily to New York’s Guggenheim Museum and Case Western Reserve University in Cleveland, where Progressive is based.

The idea for the National Leadership Campus has been germinating for several years, says partner Miller. It just didn’t have a home.

In 2003, Miller met his father-and-son partners while working for the D.C.-based Democracy Alliance, an advisory group for business leaders interested in nonprofit investment. The three discussed reasons nonprofit leadership around the country wasn’t more diverse. “And it turns out, a lot of that has to do with really early on, when people come out of college and take jobs, early in their career, they can’t afford to pursue a nonprofit or social goal,” says Miller by phone.

(Peter Lewis declined to be interviewed, as he was “tied up in corporate board meetings all week,” according to his spokesperson.)

Last year, Jonathan Lewis contacted Miller about the idea. An organization called Tides Shared Spaces in San Francisco runs similar centers, says Miller, so the concept’s not entirely new. The NLC leaders considered building elsewhere—New York or San Francisco—but concluded that D.C. would be the spot with the most bang for their bucks.

In late 2008, the mayor announced 11 school sites would be available for private development. Hine Junior High not only sits roughly seven blocks from the Capitol, it’s also across the street from a Metro station and close to neighborhood darling Eastern Market.

The location was the first place seriously considered.

“This is something that’s a national challenge that we face.…By doing it near the Capitol, by doing it in the kind of scale we’re talking about doing it—it really is larger than anyone’s ever done it elsewhere—it really has a lot of symbolic power,” he says.

But only small parts of this backstory emerged during the meeting. The presenters instead gave a rough outline and emphasized their plan to involve the community in fleshing it out. That might take awhile, but the presenters assured folks that the project’s No. 1 asset—namely, its ample assets—would keep things moving along.

Miller says his group estimates the project will cost roughly $150 million. Some $100 million of that can be raised through debt financing, including tax-exampt bonds geared toward nonprofit development; $20 million has been pledged by the partners.

Sean Madigan, spokesperson for the Deputy Mayor for Planning and Economic Development, says his office is “still in the process” of vetting the teams’ proposals.

But pledged cash and a charitable pitch alone likely won’t sway Capitol Hill types to get behind the nonprofit campus for Hine.

Neighborhood group Eastern Market Metro Community Association met the week before the meeting to judge the proposals.

Group secretary Thomas Riehle found the three commercial developments to be strong contenders. As for the NLC, “the other ones were built to appeal to customers. [With] this proposal, the customer is nonprofit organizations. That proposal is going to get stronger when you ask ‘How are you going to support local nonprofits?’”

Leah Daniels grew up on Capitol Hill and owns cooking supply store Hill’s Kitchen at 7th and D Streets SE. She says she’s already seeing two favorites emerge, neither of them National Leadership Campus.

“I am personally not interested in that idea. I think that the land is too expensive…It’s a great opportunity to raise money for the city with taxes, and I think it would miss the boat.”

Instead, she’s heard praise for Stanton Development’s plan, which incorporates a space for the Shakespeare Theatre Company, and DSF Developers, which brought a rep from boutique hotel chain Kimpton Hotels and chef Wiedmaier.

A few major nonprofits have stepped up as supporters of NLC: Media Matters for America, Center for American Progress, and People for the American Way Foundation among them. Miller says some groups sent letters of support to the city, but in no way does that guarantee them space. “We haven’t selected organizations yet,” he says. “We thought that was premature.”

The NLC already has some development parameters, presumably flexible, in mind: 125,000 square feet of office space, 65,000 square feet of residences/extended stay residences, conference facilities, retail and restaurant spaces, a possible hotel, and parking.

The city’s pick could be announced “as soon as this summer,” according to Madigan.

Before that happens, Riehle said he’d like to see some of NLC’s money men talk directly to Capitol Hillers. When it comes to verifying the 80 percent claim, he says, “that’s where you do need to have the Lewises there.”