DC launches massive redevelopment project in struggling neighborhood with $50 million TIF plus OZ and government leasing support

On May 20, 2021, District of Columbia Mayor Muriel Bowser announced Tax Increment Financing (TIF) funds totaling over $50 million for the massive Northeast Heights redevelopment project in one of DC’s longest-struggling neighborhoods.

Mayor Muriel Bowser.

Northeast Heights broke ground the same day as the funding announcement at the Minnesota Avenue, NE and Benning Road, NE corridor in Ward 7. Northeast Heights has been designed to become a destination-level redevelopment, including mixed-use development consisting of new and reimagined retail, dining, and residential spaces.

A primary anchor of the development is the relocation of the Department of General Services (DGS) headquarters, to be located at 3924 Minnesota Avenue, NE. Mayor Bowser was joined by Ward 7 Councilmember Vincent C. Gray, representatives from Cedar Realty Trust, the Goldman Sachs Urban Investment Group, Asland Capital Partners, administration officials and members of the community.

With this project, we’re using all of the tools in our toolbox – our DC Government leasing power, over $50 million in TIF funds, and we’re in an Opportunity Zone,” said Mayor Bowser. “With an assist from DGS, this development will bring new opportunities, new jobs, and new amenities to the residents of Ward 7. We look forward to when the construction is done and when we can cut a ribbon to what will be a remarkable asset to the community.

Northeast Heights is part of the Mayor’s East of the River leasing strategy that includes using District government buildings as a catalyst for economic growth in communities currently experiencing underinvestment and needing retail, including grocery stores. Through this partnership between the District and Cedar Realty Trust, approximately two million square feet of the corridor will be transformed to revitalize and boost the Ward 7 economy.

The project will include a new full service supermarket and over a hundred affordable housing units. A joint venture partnership has been formed with the District, Cedar Realty Trust, Asland Capital Partners and Goldman Sachs for phase one of the project which will include a new six-story, 257,000 square foot office building that will serve as the DGS headquarters and be leased by the District.

I am pleased that the Department of General Services, currently located at the Reeves Center on U Street, N.W., is relocating its headquarters to downtown Ward 7, a potentially flourishing area. This move is going to bring nearly four to five hundred jobs to Ward 7. Moreover, East River Park, soon to be known as the grocery-anchored Northeast Heights, located adjacent to the new DGS headquarters, was included in a bill I spearheaded to bring more full-service grocery stores and amenities to this area. This and other vital projects in the ward will have a catalytic effect on increasing neighborhood amenities and creating new jobs for Ward 7 residents. I am hopeful and excited about today’s groundbreaking and the accelerated economic development DGS’ move to Ward 7 will bring,” said Ward 7 Councilmember Vincent C. Gray.

One of Mayor Bowser’s top priorities is to create more inclusive economic growth in Wards 7 and 8 to improve the quality of the lives of our residents,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “Fueled by a new $50M commitment from Mayor Bowser, Northeast Heights will help us provide residents every opportunity to rise and will soon house the new headquarters of the Department of General Service as well as new residential, good access points and retail opportunities.

DGS will occupy 239,800 square feet of space to accommodate approximately 400 members of its workforce, include 300 parking spaces for an initial lease term period of 20 years. The building will seek a minimum Leadership in Energy and Environmental Design (LEED) certified Silver rating or above.

DGS always stands ready to support the District, in the buildings we produce for our city employees and residents, and maintaining those properties year around,” said DGS Director Keith A. Anderson. “I am exceedingly proud that DGS can now support Washington, D.C. in this unique way, by calling Ward 7 our new home headquarters for our workforce.

While DGS is synonymous with building many of the District’s government portfolio, this building is not a DGS project but, rather, is a privately owned building in which DGS is leasing office space. The project is still in the early phases and the owner, Cedar Realty, along with their JV partners and fee developer, Trammel Crow, are working with the District on building features.

This groundbreaking not only launches the new, innovative headquarters for DGS, but also signifies the revitalization of a historically underserved neighborhood in Ward 7, ” said Robin Zeigler, Chief Operating Officer at Cedar Realty Trust. “As the future of Northeast Heights takes shape, we’re excited to create a dynamic, mixed-use destination that will spur economic activity and serve as an asset for the surrounding community for generations to come.”

Completion of the DGS headquarters is anticipated for winter 2022.

Renderings and photo courtesy of office of Mayor Muriel Bowser.

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