- The Washington Times - Friday, March 8, 2002

Revitalization of the city's neighborhoods has been an ongoing process since the 1930s, when Georgetown's venerable structures needed revamping.

Mount Pleasant, Adams Morgan, Capitol Hill, Dupont Circle and neighboring Logan Circle all have undergone revitalization in the past few decades, a process that continues in many of these areas today.

While Columbia Heights is attracting the most attention at the moment from some builders who see this neighborhood as ripe for revitalization, other areas in the city attracting residential development include streets near the District's new convention center, Capitol Hill, Southeast and Shaw.

"The entire city is pretty hot. No part of the city is being overlooked for potential housing, and the obvious places such as Logan Circle continue to be redeveloped," says lawyer Jeffrey Gelman, chairman of the Housing Committee of the District of Columbia Building Industry Association (DCBIA).

"I don't think the demand for quality housing in the city will ever seriously ebb," he says. "Even during the recession, people wanted to live here, and the attractions of the city are evident: There are jobs here, restaurants, museums and theaters. While there's no shortage of demand, there's a shortage of supply of quality housing."

According to Gerry Widdicombe, director of development for the Center City Partnership, the District "has a lot of vitality right now, and the environment is better for retail development, which is the next component for revitalizing downtown. Housing development will be happening everywhere in the next few years, and there are plenty of people wanting to move into the city.

"There are empty nesters who want to experience the urban lifestyle, and young professionals who don't want to commute," he says. "With D.C. tax rates coming down a bit and the traffic woes around here, even more people will want to move back. As long as people perceive that the city is safe and clean, and that there's lots to do downtown, people will keep coming."

Many small and medium-size builders are developing new housing in the city, but some larger builders have chosen to stay away from the District.

"Many national developers have given up on trying to develop projects in D.C., because it's a small market and heavily regulated," Mr. Gelman says. "The economies of scale just aren't here for the larger builders who are looking for bigger mixed-use type of projects."

Revitalization efforts are being made instead by smaller companies that channel energy and financial resources into 10 to 20 projects a year, such as NDC Builders, which focuses on small to medium-size buildings that can be renovated into condominiums as part of a neighborhood revitalization project.

"We look for neighborhoods that are still kind of funky, with mixed incomes and mixed ethnic groups but with historic character," says Adrian Washington, chief executive officer of NDC Builders. "We look for buildings with high ceilings, large windows which can let in lots of light and great views, and then we try to combine the old with the new, preserving the character of a building.

"Most of our buyers are first-time home buyers in the city, so we want our base product to be affordable," he says. "More affluent buyers can add things like granite counters and cherry cabinets if they want to. While our products vary from building to building, most are priced from $100,000 to $200,000 for one or two bedrooms."

Current NDC projects in Northwest include 1020 Fairmont St., where the one-bedroom and two-bedroom condominiums are priced from $115,000 to $169,000, and 1030 Fairmont St., a project of 11 new one-bedroom and two-bedroom condominiums. Next summer, one-bedroom-with-a-den and two-bedroom condominiums will be available in the historic building at 1427 Chapin St.

"We like to work sort of on the fringes of a so-called hot neighborhood, so we buy buildings one or two blocks away to renovate," Mr. Washington says. "For instance, our building at 310 M St., the Verona, backs onto New York Avenue and is near the new convention center/NOMA [north of Massachusetts Avenue] neighborhood. We've renovated six condominiums in this building, and then we took the roof off and extended it to create a unique loft unit with 14-foot-high cathedral ceilings and spectacular views of the city. The condos here will start at $119,000. This small pocket neighborhood has lots of row houses which are being renovated, too."

According to NDC Builders, Columbia Heights fits the criteria for a neighborhood ready for revitalization because of its proximity to downtown's employment centers, three Metro stops, and neighborhoods that have already been revitalized or are known for their long-term affluence: Logan Circle, Adams Morgan, Mount Pleasant, Crestwood and Kalorama. Victorian-era buildings provide distinctive streetscapes comparable to Georgetown and Capitol Hill.

"Besides Columbia Heights, which has been the neighborhood for 10 of our 12 projects in the past four years, we're looking at Shaw and Capitol Hill as the other two neighborhoods ready for revitalization projects," Mr. Washington says.

James Abdo, founder of Abdo Development and a leader in residential revitalization projects in the city, is also speculating on Columbia Heights' potential, and expects to see some momentum there in the next 12 to 24 months.

"I'm big on taking risks, and I want to be ahead of the curve when it comes to finding areas in transition," he says. "I try to look for the potential for an area to ignite, and I like to create an impact on a whole area. So I look for assemblages of lots or buildings together which can have an impact on a whole block. This creates momentum and the potential to be able to make a bigger change for a neighborhood, not just one row house on one street.

"I like to make a long-term investment in phases, and right now investing in housing in the District is great almost no matter what the location," Mr. Abdo says.

Steve Earle, vice president of acquisitions and development for PN Hoffman, the largest developer of condominiums in the District, says: "There's no real formula for choosing an area in which to develop housing. We just look for a place where there's a vacant parcel of land which would permit new construction, or an existing building which is in a condition comfortable for retrofitting it for residential use."

PN Hoffman started in 1993 in the Dupont Circle neighborhood and was among the first builders to move into 16th Street and beyond, which had once been considered a barrier to upscale development. Now it is looking into downtown and the 14th Street corridor, along with working on projects in Bethesda and upper Northwest.

"While Columbia Heights has a great deal of attractive architecture and is close to Metro, we aren't ready to pursue projects in that neighborhood yet," Mr. Earle says. "At some point we will turn to Columbia Heights, but we tend to market our products to higher-income buyers and almost always tend to favor a slightly more solidified neighborhood."

One new PN Hoffman project, the Mather at Ninth and G streets NW, is a renovation of a historic building that had been boarded up for years.

"Finally, the District put out an RFP [request for proposals] for this property, and we were selected last fall," Mr. Earle says. "We're restoring the historic terra-cotta facade, and there'll be about 50 condominiums in the building. G Street used to be closed to traffic and remains sort of a sleepy street, but within 1½ blocks in either direction there are Metro stations, and MCI Center is only 1½ blocks to the east.

"The arrangement with the government is that we will offer 12 units as affordable housing for people with incomes at 50 [percent] to 80 percent of the median for D.C.," he says. "We're creating units which would be appropriate for artists to use as live-and-work spaces. We're also leasing first-floor space for arts-type use and will lease it to an arts group as a studio or gallery for 10 years at a below-market rate."

Other current PN Hoffman projects include the Lofts at Adams Morgan, which is a contemporary, loft-style condominium building with a retro-warehouse design, and a mix of one-bedroom, two-bedroom and three-bedroom residences at varying prices.

Saxon Court, a unique condominium project at 1440 Church St. NW, includes an industrial-style facade incorporating the existing Church Street garage building, distressed brickwork and walls of glass. Homes here will range from $250,000 to $700,000, with the average two-bedroom home costing between $400,000 and $500,000.

Abdo Development has concentrated much of its work along P Street and the Logan Circle neighborhood.

"We're still connected to the 14th Street corridor and the neighboring enclaves, which I see as a sleeping giant just starting to wake up," Mr. Abdo says. "I'm interested in not only residential development, but also retail development, which is necessary to keep the momentum of revitalization going. Services need to be available and keep pace with the residential growth of a neighborhood. We're still excited about Logan Circle and Dupont Circle, and we still have projects in those areas we're working on, but these neighborhoods aren't considered transitional anymore."

Abdo Development was instrumental in transforming P Street between Dupont Circle and Logan Circle, which now includes a Fresh Fields grocery store and the Studio Theatre, which add to the momentum of a changing neighborhood.

"In a couple of years, I think the city will look to the P Street area as an example of the perfect restoration project of a neighborhood, with its mix of retail and residential properties creating a true community," Mr. Earle says. "Our Saxon Court project will create another anchor for the neighborhood on the corner of 14th Street."

For the first time, Abdo Development is starting a project in Southeast, where the company is in the process of buying a historic school building that will be converted to condominiums.

"These will be true luxury loft homes with spectacular views of the Washington Monument and the Capitol building," Mr. Abdo says. "Another developer is building town houses on the adjacent land, and we're allowed to put in as many as 30 condominiums, but my style is 'less is more.' We want to keep these as big and dramatic and open as possible."

Other areas in which Abdo Development expects to create housing in the next few years include projects east of 14th Street into Shaw and areas near the new convention center.

"Right now, we're working on the Willison, which was a 72-unit condominium building from the 1920s on Rhode Island Avenue between 14th and 15th streets," Mr. Abdo says. "We're putting just one or two units on each floor, so there will be just 22 units in the building."

Gary Lofaso, president of Georgetown Restoration Inc., began his company with small restoration projects in Georgetown and on Capitol Hill, and then started buying foreclosures along 13th Street and transforming them into rental apartments.

"All of our larger projects have been in the Logan Circle area because we always saw the opportunity there," Mr. Lofaso says. "Especially when we saw the blight along 14th Street, we wanted to restore the period architecture. There's a restoration component in nearly everything we do. Now we're expanding beyond Logan Circle, looking north into Columbia Heights."

Georgetown Restoration is working on the Haley, a six-unit condominium at Ninth and M streets near the new convention center in Northwest. The Haley will have split-level loft designs with flights of stairs leading from one part of each unit to the next and light from lots of different directions.

"We had the existing side yard incorporated into the design to get a courtyard and light from more sides, which makes the condominiums seem more like town homes than apartments," Mr. Lofaso says. "We put in granite counters, hardwood floors, fireplaces and crown moldings to give it all an upscale feel."

Georgetown Restorations is also building a new loft-style condominium building at 3039 16th St. NW near Harvard Street, with 16-foot-high ceilings with glass curtain walls and only two units per floor.

"We're always looking for areas on the edge," Mr. Lofaso says. "Logan Circle was on the edge of Dupont Circle, and now we're moving east of Logan Circle a bit, but the new convention center creates sort of a boundary, so now I think revitalization will be moving north."

Most builders credit the current D.C. leadership with encouraging residential development and providing a positive environment for the city. While direct government aid hasn't been part of the process for these builders, they cite the $5,000 tax credit for first-time buyers in the District with helping them to attract buyers.

"There are tax-incentive programs for developers to help them finance rental properties," Mr. Earle says, "but not a lot out there for for-sale properties. The government is trying to create a balance between a strong, high-income tax base and affordable housing."

According to Mr. Lofaso, "The District government is definitely more builder-friendly and has created the NCRC [National Capitalization Revitalization Corp.] to deal with the hundreds of blighted properties that are in the government inventory. The D.C. government is definitely making an effort, but there's so much growth happening right now that the infrastructure has to be worked on."

NCRC, a public-private partnership, received $25 million in funding from the federal government and $75 million from Fannie Mae investments to manage major development projects in the District.

"The city has been like a leveraged buyout with unused assets for a long time," Mr. Widdicombe says. "Now the NCRC has completely changed the way business is done. Now properties are actually being sold, plus the requirements are much tighter on things like builders getting their projects going on time. The vitality of the city is great and the retail component will be the next phase of redevelopment. The final nut to crack will be the school system, because until that gets fixed we won't see many families coming to live in the city."

Developers working in Logan Circle, Columbia Heights, Southeast and elsewhere in the city are optimistic about the future of the District and confident about the role their work can play in the continuing success of the city.

"The builders who are working in the city want to do good and to be proud of what they're doing," Mr. Gelman says. "The people who persevere in this want to make a living, of course, but they also want to do good things for the city."

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