- The Washington Times - Monday, December 4, 2000

D.C. planners have asked the city council to approve their proposal to sell a vacant, city-owned building on G Street NW coveted by developers who want to turn it into apartments.

But many of those developers say they oppose a requirement that some of the apartments be set aside as affordable housing, although some say they may bid on the project anyway.

The Mather Building a 10-story, 78,400-square-foot office building has been empty since its last tenant, the University of the District of Columbia, moved out in 1990.

Housing activists and developers since 1997 have been pressing the city to put the now-dilapidated building up for sale, saying its location in the District's booming downtown makes it prime real estate.

The D.C. Office of Planning and the D.C. Department of Housing and Community Development on Friday sent the city council a proposal to invite developers to bid on the property.

Planners did not set a sale price, but a study this year estimated it would cost about $8 million to redevelop the building, including $483,000 to restore its historic brick-and-concrete facade.

The proposal sent to the council outlines requirements that the buyer build about 80 apartments on the top nine floors, setting aside 20 percent of the units for affordable housing or studios for artists, who are being pushed out of downtown by developers building high-rise offices.

"We would like to see affordable housing and arts uses in that building. Hopefully that's possible," said Andrew Altman, the District's planning chief.

But some developers said mixing affordable and market-rate apartments in the same building would make it harder for them to make money.

"If 20 percent of the units are set aside for affordable housing, it can be challenging to get the market rate for the remaining 80 percent," said Daniel B. Karchem, president of Karchem Properties Inc., a D.C.-based developer.

Other developers said it is harder to get financial backing for affordable housing projects, and complain that building affordable housing in the District involves too much paperwork.

Karchem Properties is one of several companies that have submitted unsolicited bids for the Mather Building, offering $705,000 in cash for the property in March 1997.

Mr. Karchem and other builders say they like the Mather Building because it is near other big downtown projects, including the new Newseum journalism museum planned for Pennsylvania Avenue NW and the $43 million luxury apartment project slated near the MCI Center.

Housing activists said they are glad the city is closer to selling the building, which has several broken windows and is infested with rats. Some activists said they regret the city will not ask for more affordable apartments in the Mather.

Mr. Altman said if the council approves the request for proposals this month, developers could begin submitting offers in January.

The city must also settle a dispute with UDC, which claims it is entitled to a share of the proceeds if the Mather Building is sold, Mr. Altman said.

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