Shapiro, Lifschitz & Schram

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A RARE LOOK BEHIND HINES - ARCHSTONE'S CITYCENTERDC: Development of a 10-Acre "City-Within-a-City" in the Heart of Downtown DC

Last week, I joined over 200 real estate industry professionals at the exclusive CityCenterDC Conversations: Development Briefing and Summer Soiree to celebrate and discuss what has been dubbed "a modern-day Rockefeller Center" - the $700 million mixed-used development currently under construction in the heart of downtown DC known as CityCenterDC. CityCenterDC Conversations, hosted by Georgetown University's Master of Professional Studies in Real Estate Program (in which I am currently a student) provided a rare opportunity to learn first-hand about the landmark project directly from the world-class development and construction team. The venue could not have been more perfect - a raw space on the 4th floor directly across from and overlooking the 10 acre parcel - providing sweeping views of the construction site. In fact, Bill Alsup, Senior Vice President of Hines and the event's keynote speaker said that he had yet to see the project from such an extraordinary angle. (Mr. Alsup was awarded the 2011 Georgetown Real Estate Professionalism Award that evening).

As a quick overview, CityCenterDC will fill 10 acres, all city-owned (developed pursuant to a 99-year ground lease) except for the land beneath two condo buildings. Bounded by New York Avenue and 9th, H and 11th Streets NW, the site - once occupied by DC's convention center - is located in one of DC's most desirable locations, only a few blocks from the White House. Developed by Hines | Archstone in conjunction with five local firms, CityCenterDC is the largest downtown development currently underway in any US City, with 2.5 million sq. ft. of office, residential and retail space, as well as a public plaza and park. A joint venture between Clark Construction Group and Smoot Construction has been engaged as general contractor. Construction commenced just four months ago (March 23, 2011) and is expected to reach substantial completion by the fourth quarter of 2013. One hundred percent equity financing has been secured for the project. London-based Foster + Partners led CityCenterDC's master plan design. The design team also includes DC-based Shalom Baranes Associates, serving as associate master plan architect, project Architect of Record and lead designer of the residential rental buildings. Gustafson Guthrie Nichol of Seattle is the lead landscape architect, working with Washington, DC-based Lee and Associates.

At the July 20th CityCenterDC Conversations event, five executives critical in making this project a reality, discussed everything from the history of the site and the development process/overview, to the economic impact CityCenterDC will have on the DC area. Speakers included: Bill Alsup (Hines), Howard Riker (Hines), Jason Jacobson (Archstone), Matt Haas (Clark Construction Group), and Sandy Paul (Delta Associates, Transwestern's real estate market research affiliate).

  • Hines' Bill Alsup provided an overview of the project, discussed the history of the 4.5 block site, and noted hurdles in the development and the complexity of such a project. Mr. Alsup also commented on the patience required of such an undertaking, stating that "somewhere around nine years ago [after relocating the Convention Center] the City approved this project," seeking a quality mixed-use pedestrian-friendly development that would create a live, work, play environment with distinctive retail amenities. Finally, almost a decade later, construction has commenced. CityCenterDC will be built in three phases. Phase I includes a pedestrian-friendly neighborhood with more than 185,000 sq. ft. of retail, 458 rental apartment units and 216 condominium units, and 520,000 sq. ft. of office space. The project also includes 1,555 below-grade parking spaces, a new street grid reinstated throughout the site, and nearly an acre of public open spaces. Phase II will include a 350-room upscale hotel and 110,000 additional sq. ft. of retail. Phase III (master planned by Hines but developed by another developer, Gould Property Company) will contain 500,000 sq. ft. of office space and roughly 40,000 sq. ft. of retail space.
  • Howard Riker, also of Hines, discussed Phase II of the project (350-room upscale hotel and 110,000 sq. ft. of retail), noting that CityCenterDC will be part of a "hub of hospitality" with a number of entertainment venues (including restaurants, theaters, and museums) within close proximity. Mr. Riker further commented on CityCenterDC's prime location, with easy access to Montgomery County and Prince Georges County in Maryland (via New York Avenue and Massachusetts Avenue) and to Northern Virginia (via 9th Street), in addition to being only steps from two of DC's most active Metro stations.
  • Archstone's Jason Jacobson discussed plans for the retail and multifamily space, noting that CityCenterDC's retail component is designed to attract unique local, regional and national retailers and restaurants, complementing those currently present downtown. The co-tenancy, street-oriented storefronts and charming public areas are expected to attract residents, office workers, convention visitors, regional shoppers and tourists.
  • Clark Construction Group's Matt Haas described the enormous construction effort required for a project of this magnitude, including excavating soil and pouring concrete. He further noted the importance of properly sequencing of such a complex project, especially considering the logistics of building such a project in the center of bustling downtown DC. Notably, the entire development has been accepted into the US Green Building Council's pilot program for LEED® Neighborhood Development (LEED-ND) and is expected to receive Gold certification. The office buildings have achieved LEED pre-certification at the Gold level. The residential buildings are targeting a LEED Silver rating.
  • Sandy Paul of Delta Associates, Transwestern's market research affiliate, brought the CityCenterDC Conversations discussion full-circle, noting the economic impact that CityCenterDC will have upon the Central Business District submarket, local jobs, and the DC region. Mr. Paul suggested that numerous job opportunities are expected to be generated from the project. Further, more than $150 million is expected to be generated for DC-based firms.

Bottom line, CityCenterDC is an absolutely incredible development! I look forward to following the project as it progresses and seeing the transformation of DC's long-time East End parking lot into an amazing 10 acre "City-Within-a-City." Many thanks to Georgetown University's Real Estate Program for putting together CityCenterDC Conversations and showcasing how various sectors of the real estate industry work as a team to build such a landmark project. As noted by Charles Schilke, Associate Dean of Georgetown University's Real Estate Program, the "event was a great opportunity to network with colleagues in the industry while learning about a high-profile major real estate project directly from the real estate executives developing it." I couldn't agree more.

Stay tuned ... updates on the CityCenterDC Project will be posted every so often on this blog. Also, for detailed information about the project, you can visit the CityCenterDC website, http://oldconventioncenter.com/index.php.

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Did You Know . . .

Members of the SLS trial group have tried in excess of 50 jury trials and 75 bench trials?

The SLS construction group has worked on sports stadiums across the country including Orioles Park in Baltimore and Paul Brown Stadium in Cincinnati?

The SLS construction group has worked on power plant projects across the country?

In 2007 SLS was selected for an Honorable Mention as one of the Best Places To Work in Washington DC?

Ron Shapiro, Steve Schram and Judd Lifschitz have all been selected as SuperLawyers by Law and Politics?

The SLS office building is an historic townhouse constructed in the late 1800s?

SLS has been selected by Martindale-Hubbell as a Preeminent Law Firm?

SLS trial lawyers have argued appeals in the U.S. Circuit Courts of Appeal for the 4th, 5th, 9th, D.C. and Federal Circuit?

SLS trial lawyers have been lead trial counsel in cases in Arizona, California, District of Columbia, Florida, Louisiana, Maryland, New Jersey, New York, North Carolina, Oregon, Texas, and Virginia, - to name just a few?

Virtually all the cases that SLS trial lawyers mediated have been favorably settled at mediation?

The transactional group at SLS was lead counsel on one of the largest, most complex mixed-use projects in downtown Washington, DC involving 4 lenders and 6 property owners?

In appreciation for the outstanding efforts of each of its employees during 2007, SLS gave everyone (attorneys, paralegals, and staff) a 4 day/3 night expense paid trip to Key West, Florida?

The transactional group at SLS has represented tenants in more than 200 retail leases in the Mid-Atlantic region?

Every attorney in the transactional group at SLS has at least 15 years experience?

The transactional group at SLS has represented developers in the purchase, construction, financing and/or sale of more than 75 multi-family apartment projects?

The transactional group at SLS has represented real estate investors and developers with respect to property in Pennsylvania, West Virginia, Delaware, Maryland, the District of Columbia, Virginia, North Carolina, South Carolina, Georgia, Florida, Texas, Tennessee, Michigan and the U.S. Virginia Islands?

Attorneys in the transactional group at SLS have represented eight national banks in commercial real estate loans?

Attorneys in the transactional group at SLS have represented the FDIC, the Resolution Trust Corporation and several banking institutions in loan workout transactions throughout the Mid-Atlantic region?

The transactional group at SLS has represented homebuilders and commercial real estate developers in work-outs of individual loans and also for work-outs of large portfolios involving dozens of properties in several states?

The trial lawyers of SLS have numerous reported decisions to their credit?