Another Foreclosure in the News

[broNat]

Friday, December 11, 2009
Economic Development
U Street Atlantic Towers plan faces foreclosure threatWashington Business Journal - by Melissa Castro Staff Reporter

U Street corridor spot slated to become a 750-unit retail and residential complex called Atlantic Towers may be headed for foreclosure, assuming a possible environmental hazard doesn’t tie up the property indefinitely.

Troubled New York-based developer Broadway Management Co. Inc. and Chicago-based Walton Street Capital LLC bought the 2.1-acre site in 2006 with a $21.6 million loan from UBS.

The proposed complex encompasses three noncontiguous lots, including the Atlantic Plumbing Supply building near the intersection of Florida Avenue and V and Ninth streets NW, where grit intersects with burgeoning glam. The well-worn 9:30 Club is next door. Howard University stands to the east, and new upscale condominiums like The Floridian flank the west.

Atlantic Plumbing was a family-owned business at 807 V St. NW for 49 years until Broadway and Walton bought the property during the last days of the real estate boom to build Atlantic Towers.

http://washington.bizjournals.com/washington/stories/2009/12/14/story6.html?b=1260766800^2570121

[I drink CH kool aid]

what is your point?

the developer way overpaid for the ground and that area sucks. it's frankly scary and not ready for more development.

[New2CH]

It's telling that the only news BroNat seems to enjoy posting or hearing about in this area is bad news. It's almost like he revels in anything bad that happens in the area. Of course, the proportion of good news to bad is a HECK of lot different in U Street and Columbia Heights than it was 20 years ago, but I guess that doesn't mean anything.

Maybe I should start posting things every day like, Kenyon Square not in foreclosure, filled with taxpayers and ground floor retail on formerly vacant space, or Ellington not in foreclosure, filled with taxpayers and ground floor retail in formerly drug-ridden neighborhood. The point is, despite being mired in the worst financing crises in a generation, development has still been a 90 percent positive story in the U Street / Columbia Heights corridor over the past decade, turning areas that for decades were known as havens for crime with almost no new growth / development into neighborhoods where people are moving in droves. It is one of the best urban transformation narratives in the northeast, if not the country. Heck, just look at the increased ridership at the Columbia Heights metro from four years ago. The real story is not the few places that have failed, but the FAR greater number of places that have succeeded, in an era when, all around the country, projects are collapsing due to lack of consumers and financing.

[broNat]

D.C. Council backs controversial tax breaks to lure 2 firms
Officials hope millions will lure firms; critics call deals giveaways
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504838_pf.html

By Lisa Rein
Washington Post Staff Writer
Wednesday, December 16, 2009; B03


The D.C. Council voted Tuesday to give millions of dollars in property tax breaks to a financially strapped developer and a Bethesda high-tech company that the Fenty administration hopes to lure to the city.

Supporters hailed both tax abatements -- worth $7 million to CoStar Group over 10 years and $13 million over 20 years to Donatelli Development -- as economic tools to help revive the city's struggling office and residential markets.

Opponents called them giveaways to private companies that set bad precedents.

A second vote on both measures, scheduled for next month, is needed for them to become law.

CoStar, a growing leader in research and marketing of commercial real estate data, is seeking new corporate headquarters for about 350 employees when the company's lease in Bethesda runs out next year. Pushing the deal was Mayor Adrian M. Fenty (D), who pledged to CoStar chief executive Andrew C. Florance that he would support a tax break to overcome the relatively high taxes in the District, compared with Virginia and Maryland, Florance said.

He said the company, which employs 1,400 researchers, marketers and other real estate experts, hopes to hire 500 more workers in the next decade, drawing in part from the District.

Supporters said CoStar's move to the District would be a coup for a city that has attracted just a handful of publicly traded high-tech firms.

"If we're going to lure businesses into the city, we're going to have to pay for it," said council member Jack Evans (D-Ward 2), a key supporter of the bill.

The $700,000 annual abatement would last 10 years, and the company would be eligible for $2.5 million more in annual corporate income tax breaks for five years under an existing law benefiting high-tech firms, according to city economic development officials.

"If you're headquartered in D.C., you're going to draw on the large, unemployed population in D.C.," Florance said, estimating CoStar's total corporate tax contribution at $30 million to $50 million over the next decade.

Florance said early Tuesday that CoStar is looking to lease office space in the downtown business district, where the bill would allow the company to qualify for the tax break. But to pass the bill, supporters amended it at the last minute to exclude the central business district. "They made it as challenging as you could make it," Florance said.

Opponents, including small businesses and the D.C. Fiscal Policy Institute, a think thank that researches budget and tax issues, questioned why a profitable company deserves a subsidy in a city with one of country's lowest office vacancy rates, even in the recession. They said moving a company does not guarantee new jobs or give hiring preference to District residents if new workers are hired.

"I have yet to be convinced of the benefits that will accrue to D.C.," council Chairman Vincent C. Gray (D) said before voting no. The preliminary vote on the CoStar bill was 7 to 5, with council member Tommy Wells (D-Ward 6) abstaining.

Council member Marion Barry (D-Ward 8 ) called the deal a "giveaway."

"What we're getting is a company moving from Bethesda to the District of Columbia," he said.

Donatelli Development President Chris Donatelli, a major campaign donor to Fenty, said he sought tax abatements for his 229-unit Highland Park project above the Columbia Heights Metro station and for Park Place, 156 apartments above the Petworth Station, to help him refinance the projects.

He has converted both from condominiums to apartments and, in a predicament faced by many developers, is facing challenges in securing long-term financing, he said.

Donatelli called both developments "catalytic projects at the center" of their neighborhoods.

He agreed to set aside 20 percent of the apartments in each for affordable housing and called them "public-private partnerships" because the city sold the property for development.

The city would provide a property tax exemption of 100 percent for 10 years and reduced relief for the next 10.

But council member Phil Mendelson (D-At Large), the only member to vote against the Donatelli deal, said the city should not give a developer tax breaks that will continue for years after the economy picks up.

"What is happening here is that a wealthy developer with political connections who has run into hard times has come to the council and asked for a favor," he said. "There are many other uses for our finite resources."

[broNat]

D.C. housing market's collapse lessens developers' swagger

By Paul Schwartzman
Washington Post Staff Writer
Monday, December 28, 2009; A01

In the go-go years of the housing boom, in one of Washington's hippest neighborhoods, Scott Pannick built more than 300 loft-style condos, many of them attracting fevered bids even before their gourmet kitchens were installed.

"Sold just like that," Pannick recalled, snapping his fingers.

That was before the housing market collapsed, before Pannick's lender seized his last modern design -- the glass, steel and brick Metropole on 15th Street NW. In September 2008, days after the fall of Lehman Brothers, Pannick trumpeted the opening of the Metropole by throwing a Hollywood-style theme party, with cigarette girls, spotlights and pink champagne.

The only thing Pannick is building these days is a playhouse for his 3-year-old daughter. He has dismantled his 15-member staff, shuttered his office and, in January, plans to decamp for six months to Buenos Aires to contemplate his future, the options for which include writing a novel. "I want to forget and move on," Pannick said. "I'm burned out."

The swaggering developers who drove Washington's revival during the boom, putting up scads of new housing and offices and reveling in eye-popping profits, are now scratching to survive. With residential and office construction down 41 percent from a peak in 2008 and condo sales plummeting by 83 percent since 2005, many builders have slashed payrolls or recast themselves as contractors and consultants. Some of those who rode the boom are still plugging away, setting up for the recovery, but others are taking time off or abandoning the real estate business. One is pitching a reality TV show. Another has returned to the land, raising sheep, growing tomatoes and delivering farm-food orders to Washington households.

The swagger is now a limp.

[The comment of the Allegro developer is so full of it.]

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/27/AR2009122702126_pf.html

[New2CH]

Of course BroNat quotes only the negative / pessimistic parts of that article. Read the whole thing. BroNat is in the one percent of people who thinks that the areas that were the focus of much of the development -- like U Street, Logan, and Columbia Heights -- were better off ten years ago then today. Almost anyone with any degree of objectivity thinks that D.C. is better off with the huge amount of new transit-centric retail and residential options, and accompanying far larger tax base, that has resulted from the massive (and long overdue) residential development in previously economically depressed areas of the city. D.C. is fortunate that so few projects, relative to the rest of the country, are completely empty, abandoned, unfinished, or in foreclosure. D.C. is also fortunate that the development boom, for the most part, finished before the credit crunch, creating tremendous new residential, retail and entertainment district in U Street, Columbia Heights, and east of Capitol Hill, areas previously known primarily as havens for violence with little commercial activity. Just check out the ridership on the Columbia Heights metro station, which used to be mostly empty and is now one of the busiest in the city. Has development proceeded perfectly, with the benefit of perfect foresight? Of course not. Has the large scale development, in the aggregate, benefited this city, which bleeded residents and businesses for decades thanks to the Barry legacy? Of course.

[broNat]

I post these articles because on "net" they confirm my position on development in Columbia Heigths. Unfortunately persons such as yourself don't have the courage to admit this, but more importantly to learn and digest the lessons which will helping this community move forward. Allowing developers to run amuck set back not moved forward the pace of quality development. Had we stuck with a more balanced equitable approach, clearly CH would be even further along. In fact even the developers themselves indicate that they where overwhelmed with the greed of quick flip profits. I would suggest letting go of yo ur mythology and embrace sound and equitable development in CH.

[New2CH]

BroNat, you ignored the substance of my comment as usual. The article highlights both the positive and negative aspects of development; you cite only those aspects of the article that support your distorted view of reality, and of course, you ignore that THOUSANDS of positive stories about everything development has accomplished for this city. If you had your way, D.C. would look the same as it did 20 years ago. Other than you and probably Marion Barry, I know of NO ONE ELSE who adopts your views. What has happened in Columbia Heights in five years is nothing short of incredible, especially during a time period when most of the country is experiencing the biggest economic contraction of our lifetime. We've experienced the opposite here -- an unprecedented influx of new public works projects, large and small scale commercial development, massive amounts of new housing, infusion of tax dollars, improvements to schools, new community facilities, plazas, and parks, a dramatic upgrade in eyes / people on streets that used to be eerily quiet at night. Everyone in DC cites CH as a dramatic success story and marvels how far the neighborhood has come in the last decade, except you. Only you want to move backwards, rather than forwards. Only you believe in a fantasy world in which neighborhoods develop like magic without major developers taking an interest. Well, guess what, CH was in limbo for THIRTY YEARS without substantial development, under your approach. We tried it, it failed, and a different way, while of course NOT PERFECT, especially in light of a global financial catastropher, has been indisputably better by a factor of about 10,000. The facts are what they are, and you can't argue against reality.

[broNat]

The hard earned progress in CH and the success story is what I want to preserve and expand. This progress was not primarily driven by developer quick flip greed or the anything is better than a vacant lot approach. If we want to continue the progress my view is that we need to move back from the things the article talks about to a more balanced approach. They made their money now its time to focus on the work of really building CH.

The Allegro Developer is full of it. His comments are at the end of the article, I posted my comment to entice folk to read the entire article. In fact I want people to have more concrete information as the more information folk have the stronger my position. I'm just fine it amazing that the contortions and distortion you go through to pretent otherwise.

[Mr. T]

Reminder, Bronat: the real estate slump is a nationwide phenomenon! You can post all the articles you like about problems in the condo market, but the fact remains that this area, and CH in general, is in far better shape than huge swaths of the country, especially places like Florida and California. Your advocacy of a "balanced approach" is laughable. We all know what you mean by that: no new development for the middle class at all, no retail, no density, basically, you want to keep CH in the post-riots/pre-Metro doldroms.

[broNat]

This does not justify the greed and political corruption which has help to undermine progress. You are silly and need to lookup up the word balanced.

But, I do empathize with you. The facts are tending to line up with my positions, you've gone out of your way to paint me on the fringes and now you are stuck out on the fringe. So don't worry, I forgive you.

[Mr. T]

No, I'm not silly, and if you want to get personal, I have a plethora of adjectives to describe you, mostly focusing on your state of mental balance, so let's not go there. Also, the facts rarely, if ever, support your anti-development, NIMBY positions.

[broNat]

You are correct. I should have said that your post was silly concerning my postions. Not that you are silly. Just because your posts concerning my positions are silly does not mean that you as a person are silly. I apologize for that.

[paully65]

OK, look. Bronat = William Jordan! He is also on the Columbia Heights Yahoo! Group and he spreads his vitriol there too! A harsh and corrosive tone. That describes him pretty good. Sorry to attack you for the millionth time, but people in the group need to know the real you so they can avoid your posts. You say negative things all the time because you think it gets people to read an article or reply to you or whatever, but it really turns people off.

More normal posters on this site post things like: I got home from work today and WALKED over to Target to pick up a toaster oven (I like the Black and Decker - makes a great broiled salmon) and then went over to Best Buy and looked at the laptops and then stopped at Starbucks for a good skinny Cinnamon Dolce Latte.

I happen to LOVE all the stores in Columbia Heights. I am sure most people here would agree with me. Not to mention all of the wonderful restaurants! I have lived here long enough to remember when the Target site was occupied by the old post office facade. Amazing how long we have come! William, I mean Bronat, I know you will dismiss me as silly, but the day I start seeing you post some positive things...oh, never mind, that will never happen.

[broNat]

Paully65,

Your premise that I opposed development is silly and has no standing in reality. Just because because I am critical of the excesses and some unproductive/counterproductive political backdoor dealing does not mean I oppose much of the progress made. I realize that I irritate some who want to enjoy the benefits and convenience of development, but avoid the responsibilities and work it takes to sustain and expand it. I'm just not a "group think" type of person, who is tied to one mythology as some seem to be.