The District of Columbia announced yesterday that it has reached an agreement with a private developer to head up a $1.1 billion redevelopment of its southwest waterfront, and that the city plans to provide $200 million of tax increment financing and bonds backed by payments in lieu of taxes to help finance the project.
Mayor Adrian Fenty said at a press conference that Hoffman-Streuver Waterfront LLC, a team of companies and groups led by district-based PN Hoffman and Baltimore-based Struever Bros. Eccles & Rouse, will take on the massive overhaul of the waterfront area where the Anacostia and Potomac Rivers meet. The Struever Bros. firm built much of Baltimore’s waterfront, as well as similar projects around the country.
Calling it a “true public-private partnership,” Fenty said he has introduced legislation before the D.C. Council that would authorize the $200 million of debt using TIFs and PILOTs.
District officials expect that the PILOTs will be made by the Hoffman group, and that the TIF revenues will be backed by an established TIF area within the district.
The debt will be used to help finance the development of infrastructure, new public piers, assorted repairs, and the creation of five new public parks within the 16-acre site.
District officials said yesterday that even with the city paying for 18% of the total development, an expected $27 million of new taxes generated by the project will more than offset the cost of the financing.
Currently, the waterfront area generates about $4 million in sales and property taxes each year, but a fiscal analysis of the project estimates that once completed, the area will produce about $32 million of tax revenue annually.
However, if the project does not produce the amount of revenues expected, the Hoffman group will make up the difference, district officials said.
The waterfront represents “one of the most under-utilized areas of the city,” District Council member Tommy Wells, who represents the area, told reporters.
Fenty said the planned development is key to the “great renaissance” of the district, and that the area presents an opportunity. “We are doing as other great world class cities and capitalizing on our resources,” he said. “In other cities, waterfronts have completely reenergized cities and neighborhoods.”
Monty Hoffman of PN Hoffman said the region will become “one of the highest tax generators in the region,” adding: “I don’t think we fully appreciate the pent-up demand to come to this waterfront.”
Yesterday’s announcement marks the first official act involving the waterfront since it came under the control of the district’s Office of Economic Development. Previously, the Anacostia Waterfront Corp., a semi-public city redevelopment agency, was in charge of the project. However, the District Council decided to dissolve the agency last summer, along with the National Capital Revitalization Corp., a similar district agency. Both will officially shutter on Sept. 30, the end of the district’s fiscal year.
Wells said yesterday that even though the AWC is no longer behind the project, the former organization deserves credit for laying much of the original groundwork.
The plan calls for 400,000 square feet of office space, 280,000 square feet of retail space, 476,000 square of hotel space and 150,000 square feet of cultural space. The redevelopment is expected to create nearly 2,900 jobs, 100 new businesses and homes for 1,100 new residents, according to district officials.
Assuming the council approves the bonds sometime this spring, construction is scheduled to begin in 2010, with the first phase being completed by 2014.