WASHINGTON, DC - The start of construction on the landmark CityCenterDC development by Hines|Archstone was formally announced today at a groundbreaking ceremony on the downtown Washington, DC site. In addition, it was announced that 100 percent equity financing has been secured for the US $700 million project, which is believed to be the largest downtown development currently underway in any U.S. city. The anchor investor is Qatari Diar Real Estate Investment Company (Qatari Diar), the real estate investment arm of the Qatari Investment Authority and the financing was put in place by Barwa Bank's investment banking subsidiary The First Investor (TFI). TFI will co-invest in and manage the dedicated TFI U.S. Real Estate Fund.
A joint venture between Clark Construction Group and Smoot Construction of Washington, DC has been engaged as general contractor. Construction commenced on March 23 and is expected to reach substantial completion by the fourth quarter of 2013.
Formerly the site of the District's old convention center, CityCenterDC is a 10-acre, mixed-use development, located in the heart of downtown Washington on a 4.5-block parcel bounded by New York Avenue, 9th, H and 11th Streets, NW. The first phase of the project is a pedestrian-friendly neighborhood with more than 185,000 square feet of retail situated at the base of six buildings that encompass 458 rental apartment units and 216 condominium units; and 520,000 square feet of office space. The project also includes 1,555 below-grade parking spaces; a new street grid reinstated throughout the site, and nearly an acre of public open spaces. A second phase of the project is planned to include a 350-room upscale hotel, along with 110,000 additional square feet of retail.
CityCenterDC's retail component is designed to attract unique local, regional and national retailers and restaurants, complementing those already present downtown. The co-tenancy, street-oriented storefronts and engaging public spaces with seasonal programming are expected to attract residents, office workers, convention visitors, regional shoppers and tourists.
In addition to the significant tax revenue generated by a project of this magnitude, CityCenterDC will provide benefits to District residents in the form of affordable housing, new public spaces, priority hiring for new jobs created by the development and a commitment to use District-based firms for at least 35 percent of all contracts in the design, construction and operating phases of the project. To date, more than 40 such firms, representing over $20 million in contracts, have performed on the project. More than $170 million is expected to be added during construction, representing the inclusion of over 90 additional District-based firms. Several District-based companies have been given the opportunity to invest and participate in the project's ownership.
Mayor Vincent C. Gray commented, "This effort has been almost a decade in the making, and we look forward to the progress that will be made on the site of the Old Convention Center as this last missing piece of our downtown is redeveloped. I am excited about the more than 190 District Certified Business Entities that are involved in the planning, design and construction of this project, and the thousands of construction and permanent jobs that will be created. This is a huge development for the residents of and visitors to our city."
CityCenterDC's master plan design was led by London-based Foster + Partners, the internationally acclaimed studio for architecture, design and planning, which also designed the office and residential condominium buildings.
Additional members of the design team include DC-based Shalom Baranes Associates, serving as associate master plan architect, project Architect of Record and lead designer of the residential rental buildings. Gustafson Guthrie Nichol of Seattle is the lead landscape architect, working with Washington, DC-based Lee and Associates.
Principles and strategies for sustainable design systems and technologies have been embraced by the development team. The entire development has been accepted into the U.S. Green Building Council's pilot program for LEED® Neighborhood Development (LEED-ND) and is expected to receive Gold certification. The office buildings have achieved LEED pre-certification at the Gold level. The residential buildings are targeting a LEED Silver rating.
Mohammed Al Saad, vice chairman and managing director of Barwa Bank commented, "We are proud to be sponsoring this landmark development in collaboration with the District of Columbia and our leading U.S. and international design and development partners to create a new neighborhood in the heart of Washington, DC. Its ambition, scale and profile are commensurate with its status as Qatar's first major real estate investment in the U. S., and one which I believe will mark the beginning of a long and successful U.S./Qatari partnership in premium real estate investment and development. Today's groundbreaking signifies the beginning of a vibrant, multi-purpose community that will benefit both citizens and visitors of this historic city."
Mohammed Al Hedfa, group CEO of Qatari Diar commented, "We are delighted to provide the anchor investment in the TFI US Real Estate Fund. In conjunction with our co-investors and strategic partners, Hines|Archstone, we look forward to the realization of this landmark development."
Hines Founder and Chairman Gerald Hines commented, "It is both a great privilege and a great opportunity to be able to develop a parcel this large starting with a blank slate. The master plan for CityCenterDC is designed to welcome pedestrians, to bring neighborhoods together and to be sustainable for generations. Along with our partners, we look forward to the excitement as this project takes shape over the next three years."
Scot Sellers, Archstone's chief executive officer, added: "We are delighted to be a part of the world-class team that has been assembled to make this exciting project a reality. We have been working together with the Hines organization and our other partners on this incredible addition to the Washington DC community for over eight years now, and seeing this come to fruition is very exciting for all of us. Archstone is the largest owner and operator of apartments in the Washington, DC metropolitan area, and we are very proud to be adding another marquee location to our portfolio here."
CB Richard Ellis and Tanween WLL are acting as real estate advisors to TFI. Tanween is an integrated real estate management service provider.
In November 2003, a team led by Hines and Archstone was selected by the District of Columbia to master plan and execute the redevelopment of the "Old Convention Center Redevelopment Site," a 10-acre parcel in the middle of downtown Washington, DC. The project is situated in the heart of downtown's office core, along a ceremonial stretch of New York Avenue between the new D.C. Convention Center and the U.S. Treasury and White House. The two busiest stations in the Metrorail system, providing service on all lines, are located within two blocks of the site. Site access to and from other parts of the District, Northern Virginia and Maryland is excellent.
The overall objective of the project is to create a unique, pedestrian-friendly, mixed-use urban neighborhood that includes retail, entertainment, residential and office uses, as well as programmable public space. Project development partners Hines and Archstone, alongside partner TFI, are committed to create a place that is first and foremost for the District and its residents, and that will appeal to downtown workers and visitors. The development team will also strive to create a great place for people, with the highest-quality and innovation in urban design and architecture.
Source: CityCenterDC