The District of Columbia has rejected an offer from an arts group that wants to redevelop a vacant downtown office building because the group did not want to pay a $100,000 security fee.
Artspace Projects Inc. submitted one of four bids last month to redevelop the Mather Building, a dilapidated city-owned building at 918 G St. NW. Developers say the property is prime real estate because of its proximity to the MCI Center sports arena and the booming downtown office market.
The District set a $1 million purchase price for the property, and said it wants the building to be used for apartments. It stipulated that 20 percent of the residences must be set aside for “affordable” housing or joint “live-work” space for artists.
But Minneapolis-based Artspace, a nonprofit organization that develops live-work space for artists around the country, asked the city to waive its requirement for a security deposit.
The District requires security deposits to ensure developers will finish their projects.
Neal Drobenane, deputy director of the D.C. Department of Housing and Community Development, said the city no longer considers Artspace a contender for the redevelopment project.
“We think it would be unfair to grant a waiver for one person and not the others. It would open the process up to a lot of criticism,” he said.
Artspace mistakenly believed it had the right to request a waiver because it is a nonprofit organization, according to Anne Corbett, executive director of the D.C. Cultural Development Corp., an arts group that worked with Artspace to prepare its offer.
Since Artspace learned the city would not grant the waiver, it has offered the city a certified check for $100,000, she said. The group is lobbying Deputy Mayor Eric Price to accept that deal, she said.
“We’re not an organization that gives up very easily. We have a saying that every project dies three deaths before it’s really done,” said Chris Velasco, director of Artspace.
Artspace, which is also working with Prince George’s County officials to create an arts district in that jurisdiction, was one of four developers to submit bids to redevelop the Mather Building.
The other developers are Georgia Furiso, Yeni Wong and residential builder PN Hoffman Inc. All proposed residential units on the upper floors in the 10-story building and space for artists on the lower levels.
Mr. Drobenane said none of the other bidders requested waivers.
The housing department will review the bids and recommend one after May 15 for Mayor Anthony A. Williams, a Democrat, and the City Council to approve, he said.
The 78,400-square-foot Mather Building has been empty since its last tenant, the University of the District of Columbia, moved out in 1990.
A study last year estimated it would cost about $8 million to redevelop the building, including $483,000 to restore its historic brick-and-concrete facade. The building has several broken windows and is infested with rats.
Housing activists and developers began pressing the city in 1997 to put the building up for sale.
Terry Lynch, executive director of the Downtown Cluster of Congregations, a church group that pushes for affordable housing in the city, said the District “did the right thing” by rejecting the Artspace offer.
“You should come to the table with all your cards. Developers have to be prepared to meet all the requirements the city sets,” he said.