Plans Coming Together for Net Zero Dance Loft on 14 Performing Arts Campus and Mixed Income Housing Project
Heleos, a D.C.-based affordable housing developer, last week acquired the property at 4618 14th St. NW from Raymar Corp. for $4.2M, with Feldman Ruel Urban Property Advisors brokering the deal.
The property consists of a retail storefront along 14th street and a large area behind the property extending to the middle of the block. Heleos is in talks with The Menkiti Group, which owns the adjacent retail properties to the south, to partner on its planned development.
“One of the goals of the project is to preserve performing arts in the neighborhood,” VanArsdale said. “The way we’re able to do that is by building residential above the dance theater and studio space.”
The developer plans to build 99 multifamily units, with 66 of them set aside to those making up to 60% of the area median income, and it would include roughly 20 three-bedroom units designed for families. Heleos also plans to include solar panels as part of its goal to make the project a net-zero energy building.
The project, branded as Dance Loft at 14th, would also include up to 16K SF of ground-floor space for Dance Loft, a dance studio that currently occupies part of the property. The studio, a nonprofit organization, is partnering with Heleos on the project and would own its portion of the property after it delivers, Heleos principal Chris VanArsdale told Bisnow.
"One of the goals of the project is to preserve performing arts in the neighborhood," VanArsdale said. "The way we're able to do that is by building residential above the dance theater and studio space."
The other existing retail tenant on Heleos' property, Jerusalem Furniture, has a lease that would expire by the time the project begins construction, VanArsdale said. He said he is planning to bring the project through D.C.'s planned-unit-development process, which gives the potential for more density in exchange for public benefits, but subjects projects to the risk of extensive delays.
The retail property at 4618 14th St. NW, occupied by Jerusalem Furniture and The Dance Loft, with the Menkiti-owned properties to its left.
The PUD process requires Zoning Commission approval, and dozens of approved PUDs have been delayed by appeals, and in some cases the federal court charged with hearing those cases has stripped a project's approval, setting it back years.
Feldman Ruel Urban Property Advisors Managing Principal Josh Feldman told Bisnow that the team marketed it as a multifamily development site, and he said it consulted with a land use attorney who said that given the site's existing zoning, a project would likely require a PUD.
He said the seller, a group of six sisters who inherited a real estate portfolio from their father, wanted to close on the sale before going through the PUD process. It was the last property the family owned, and Feldman Ruel has sold several other properties for them, including a Takoma property where Jair Lynch Real Estate Partners is planning a 129-unit affordable housing project.
Developers often put a property under contract and wait to close until after entitlements are secured, so closing on it prior to the PUD process passes that entitlement risk along to the buyer. Some of the prospective buyers, including the adjacent property owners, didn't want to take on that risk, Feldman said.
“Our hope is that whenever commercial retail comes in at the bus barn, that will be additive to our project and will create more vibrancy for residents,” VanArsdale said. “The residential component will help support any retail or restaurants along that strip. That’s been a challenge for the commercial properties along the strip is just having more foot traffic and more people to patronize those businesses.”
"We got a range of offers, some at higher prices but that required the seller to wait and close upon entitlements," Feldman said. "Since this was the last property the ownership owned, their goal was to sell it and go their separate ways. They weren't looking for a long contract process. They decided to take slightly less money and essentially put the PUD risk on the buyer."
VanArsdale said he was willing to take on the PUD risk because he has confidence that his project, with the affordable and family-sized units, will be supported by the community. He has already had one community meeting and has another scheduled Thursday night with a local neighborhood association. He also said it is in line with what land use plans for the area have envisioned.