pipeline dc building industry assn july 2010

8/8/2019 Pipeline DC Building Industry Assn July 2010

1/28

PIPELINEDISTRICT OF COLUMBIA BUILDING INDUSTRY ASSOCIATION

Vie fm the tp

A Streetcar For Washingtons Future

VOLUME XXXVIX JUE/JULy 2010

Matthew J. Klein

President

Akridge

Vice President

District of Columbia

Building Industry

Association

Streetcars frstappeared inWashington, DC in

1862, and by 1916

their tracks covered

more than 200

miles o streets in

Washington and

close-in suburbs. The

streetcar network

in Washington, as

in other cities in the

United States at the

time, provided a

predictable urban

development grid extending to all corners o the

city and linking neighborhoods with an ecient

mode o transportation. But by 1962, streetcars disap-

peared rom Washington and rom most other U.S.

cities largely in avor o buses.

Fortunately, we have the capacity to learn rom our

mistakes; it just takes a while. Its called experience,

proverbially the best teacher. Today, more than 80

cities in the United States have re-introduced street-

cars, or are actively planning to, both to reap the type

o development benefts enjoyed a century ago andat the same time to address contemporary conges-

tion, environmental, and natural resource concerns.

To its credit, Washington is one o those cities.

With the frst stage o a proposed 37-mile streetcar

network under construction on H Street, NE, the

District o Columbia has embarked on a promising

addition to the citys transit system. The popularity

and momentum o the initiative was visibly demon-

strated in the immediate public uproar that ollowed

the City Councils near-elimination o unding or the

H Street line in recent budget balancing exercises.

Supporters recognize streetcars potential to enhance

and revitalize neighborhoods, increase property

values, and stimulate the citys commerce through

improved transportation inrastructure. This has

happened in other markets, it is already happening

on H Street, and it is the reason DCs business com-

munity should work closely with the city to make

the streetcar vision a reality.

Economic Development andRevitalization

The link between transportation and land use hasbeen evident since the early days o the streetcar.

Development centers emerge in locations that can

be easily accessed. The more permanent the trans-

portation inrastructure (e.g., tracks in a roadway), the

more predictable the development pattern and the

increase in density. Modern experience in other cities

has demonstrated that proximity to a streetcar line

correlates to a clear increase in realized density versus

maximum zoned density.

We are a horizontal city that craves linkage between

neighborhoods, both in established and in emerging

areas. While Metro is an immensely valuable trans-

portation resource, it doesnt meet all o our needs or

intra-city circulation. A new transit option with both

permanence and exibility could provide greater

choice and new points o access or area residents

and employees, increasing convenience and opening

doors to additional working, shopping, and entertain-

ment opportunities. Commercial enterprises would

beneft rom a broader client base and new geographic

options or business expansion, relocation, or launch.

continued on page 11


2/28

Navigating a variety of

real estate conditions

requires a law firm thathas seen it all.

CLIENTS TURNED TO ARENT FOX LLP IN THE EARLY 1980S AND AGAIN A DECADE LATER TO

HELP THEM THROUGH THE TURBULENT TIMES, AND THEY ARE COUNTING ON US AGAIN.

OUR TIER ONE REAL ESTATE PRACTICE, AS CONSISTENTLY RECOGNIZED BY CHAMBERS USA,

OFFERS EXPERIENCE AND KNOW-HOW FOR THE GOOD TIMES AND THE NOT SO GOOD.

WASHINGTON / NEW YORK / LOS ANGELES / WWW.ARENTFOX.COM
http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/http://www.arentfox.com/


3/283

www.DCBiA.org

PIPELINEJUE/JULy 2010

www.DCBiA.orgwww.DCBiA.org

Silo Busting at the Federal Level

mAKet AtCh

Its hard to walk the halls at the Department oHousing and Urban Development (HUD) these daysand not hear reerence to silo busting, the latest in

ederal inter-departmental management. At some

departments, ocials are making unprecedented

eorts to interrelate. One high-ranking HUD ocial

muses that a typical day might include outreach to

counterparts at the Departments o Transportation

(DOT), Energy (DOE), Health and Human Services (HHS),

Education (ED), and Veterans Aairs (VA), and contact

with independent bureaus such as the Environmental

Protection Agency (EPA). I you dont regularly work

with the ederal sector, you might wonder why such

inter-agency coordination is noteworthy. For those o us

charged with putting to use government unds needed

or certain development and related inrastructure

costs, we can oer countless stories o ederal ace-os

and conicting agendas. Too oten, such discord in theederal sector spills over and results in similar dysunc-

tion at the local level. Accordingly, the emerging trend

osilo busting is a welcome change.

So hows it going and what does it mean or all o us

on the ground? A ew on-going initiatives might be o

interest:

DOT, HUD and EPA: Striving for Livable,Walkable Communities and ImpactingLarger Scale Developments

HUD, DOT, and EPA have ormed an InteragencyPartnership or Sustainable Communities charged with

better coordinating ederal transportation, environ-

mental protection, and housing investments. This eort

was born o the notion that too many people spend ar

too long (and too much money) traveling rom work

to home. Similarly, essential retail and entertainment is

too oten not easily accessible.

This unprecedented initiative seeks to provide tools

and resources or building livable, walkable, and

environmentally sustainable regions. Unortunately,

at this point, the program doesnt come with signif-

cant unding opportunities or private developers.Nonetheless, i larger scale development particularly

development requiring government assistance or cer-

tain housing uses or transportation inrastructure is

in your uture, you should track this emerging initiative.

During our recent round-table gatherings, members

o the DCBIA East o the River Committee considered

how this initiative might impact larger developments in

the District, including the planned development o St.

Elizabeths east campus. I you havent done so, I sug-

gest a cyber-tour to sites such as www.walkscore.com,

www.reconnectamerica.com, and www.americawalks.

org or a quick tutorial beore diving into a thorough

review o ederal web oerings on this sustainable

communities initiative.

HUD and DOE: Advancing EnergyEcient Multifamily Properties

The ederal government spends roughly $5 billion

every year or energy costs at public housing and or

rental assistance operations. HUD Secretary Shaun

Donovan notes that trimming this bill by just fve

percent annually would generate considerable savings

over the next fve yearsreal money in the more-than-

a-little-tight HUD budget.

Accordingly, eorts abound to make these properties more

energy ecient. HUD and DOE are working together to

N. Linda Goldstein, E

Goulston & Storrs

Co-Chair, East of the

River Neighborhood

Development

Committee

District of ColumbiaBuilding Industry

Associationcontinued on page 12
http://www.riparchs.com/


4/284 PIPELINEAIL 2010

www.hklaw.com

Washington, D.C. | 202.955.3000

Industry Focused. Relationship Driven.

Copyright 2010 Holland & Knight LLP All Rights Reserved

As the largest real estate law practice in both the District of Columbia and the U.S.,

shouldnt we be keeping your company, too?

THE COMPANY WE KEEP.
http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/http://www.hklaw.com/


5/285

www.DCBiA.org


LeGiSLAtiN/eGULAtiN

Roderic L. Woodson

Partner

Holland & Knight

LLP

Chair, DCBIALegislative/

Government Aairs

Committee

Paul Tummonds

Director

Goulston & Storrs

Vice Chair, DCBIA

Legislative/

Government Aairs

Committee

Cost of Owning and Developing Property

In DC Continues to Escalate

Vacant Property TaxationOn June 15, 2010, as part o the FY 2011 Budget SupportAct, the DC Council adopted several provisions relating

to vacant properties, including a provision to retain the

Mayors proposed vacant property registration require-

ment and the implementation o a higher ee o $250

annually up rom $20. As reported in Spotlight on May 6

and again on June 4, 2010, the Mayors proposal included

a graduated registration ee that would increase up to

$5,000 over a fve-year period with no exemptions. DCBIA

worked to ensure that the registration ee was kept within

reason, and that specifc exemptions were included. In

addition, the Council reinstated a Class 3 vacant property

tax at the rate o $5.00 per $100 o value, and a Class 4 tax

o $10.00 per $100 o value or blighted properties. Vacant

building owners are exempt rom paying the registration

ee or the Class 3 real property tax i the property is or

sale or rent, subject to probate proceedings, under active

construction or rehabilitation, there is a pending applica-

tion or an administrative predevelopment proceeding,

or or undue economic hardship. The exemptions last or

12 to 24 months, depending on which exemption is used.

The cumulative time period o exemptions cannot exceed

three years. DCBIA worked to ensure that vacant land was

not included in the vacant or blighted tax classes, as well

as recommending exemptions to vacant building owners

rom the registration ee and tax.

PLA and First Source LegislationA joint public hearing will be held on June 30 by

Councilmember Mary Chehs Committee on Government

Operations and the Environment and Councilmember

Michael Browns Committee on Housing and Workorce

Development to hear testimony on Bill 18-650, the

Resident Employment and Trade Stimulus Amendment

Act o 2010, introduced by Councilmember Harry Thomas,

Jr., and Councilmember Michael Brown. The bill would

substantially increase the required quota o District

residents employed on government-assisted construction

projects o over $200,000 and mandate a Project Labor

Agreement (PLA) or all such projects. Serious concerns

have been expressed regarding the bills problematic levels

o required resident employment and the increased costs

imposed by PLA participation on virtually all District-

supported development. Other issues o equity have also

arisen in what is seen as an arbitrary legislative intrusion

in ree and competitive labor markets. DCBIA, along with

much o the business community, has taken a position

in strong opposition to Bill 18-650 as counter-productive

public policy and a serious impediment to development in

the District. At this point, the outlook or committee action

on the legislation is unclear.

MS4 Permit RequirementsAs part o its renewed priority clean up o the ChesapeakeBay, the Environmental Protection Agency has issued

proposed new regulations or the Districts MS4 Permit.

DCBIA has prepared detailed comments in response,

citing the imposition o new on-site stormwater reten-

tion standards (90-95%) as unduly stringent and likely to

drive development out o the District to nearby suburban

jurisdictions with more open space and less aggressive

requirements. The comments also note the lack o incen-

tives and exibility (o-site mitigation) in the application

o MS4 proposed regulations, as well as the prospect that

overly stringent requirements will undermine the other

important environmental goals o smart growth, transit-

oriented development.

Federal Payment of ImperviousSurface FeesThe U.S. Government Accountability Oce has recently

inormed WASA that ederal agencies will not pay the

Districts impervious surace area ee to und stormwater

inrastructure improvements, declaring the ee is really a

tax or which the ederal government is exempt. The ed-

eral governments reusal to pay a share o the ee (it owns

about one-fth o the land in the District), in eect, makes

the proposed MS4 permit requirements an ununded ed-

eral mandate and their costs, already projected to increase

substantially over time, an even more crushing fnancial

burden on the private sector.

No Escape from Flood InsuranceIt now seems all but certain that the District will not escape

the requirements or ood-risk insurance and building

code compliance arising rom FEMAs revised 100-year

oodplain maps, although the District is reportedly still

seeking a urther postponement rom FEMA implementa-

tion pending a changed levee up-grade schedule. An

earlier agreement with the District by which FEMA would

deer the issuance o revised oodplain maps pending the

overhaul o the 17th Street levee broke down as agreed-to

completion dates were unmet. In March 2010, FEMA issued

its fnal determination o District ood risk to become

eective September, 2010 at which point an estimated

5,500 property owners with buildings in parts o the low

lying area o downtown and anking the National Mall,

as well as areas o the citys Southwest quadrant, will be

required to secure ood insurance and to comply with

ood-risk related building code requirements.

A new levee construction schedule has been arrivedat, running rom July 2010 to April 2011, which should



6/286 PIPELINEJUE/JULy 2010

Connect with us:bakertilly.com

Weve changed (sort of).

For over 30 years, youve known us as Beers + Cutler, one

o the Washington regions leading accounting and consulting

frms. We have now joined orces with Baker Tilly. And while

our name has changed, our level o commitment and

dedication to our real estate clients remains the same.

Together with Baker Tilly, our strengthened industry expertisewill provide you with greater resources and services to meet

your tax, assurance and business advisory needs into the

uture.

Today is a great day.

And tomorrow will be even better.

2010 Baker Tilly Virchow Krause, LLP

Baker Tilly reers to Baker Tilly Virchow Krause, LLP, anindependently owned and managed member o Baker Tilly International.

Accountants and Advisors
http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/http://bakertilly.com/


7/287

www.DCBiA.org


C

ongratulations. Ater months o preparation and presentationsin response to a request or proposals issued by the Deputy

Mayor or Planning and Economic Development, your develop-ment team has been selected to redevelop a District-owned site. Asdicult as it may have been to get to this stage, greater challengeslie ahead in the negotiation o the requisite disposition and devel-opment agreements with the District o Columbia. The ollowingoutline sets orth the deal documents and issues that are typicallyencountered in such negotiations. A general understanding o theissues involved, along with experienced counsel, will help you toocus your eorts and move through the negotiation process in anecient and eective manner.

Term SheetLike most term sheets used in other real estate transactions,the Districts term sheet begins the negotiation by outliningthe basic terms o the deal. It will incorporate the basic

minimum terms stated in the Districts request or proposals,and will not be binding on either party. Some developers fndit best to negotiate most major legal issues in the term sheet.Others preer a term sheet that sets orth the basic businessterms only and deers negotiation o legal issues until theLand Disposition Agreement. Regardless o your strategy, aterm sheet, even a short one, sets the tone or the negotia-tions and thereore should not be dismissed as an ancillarydocument. You should consult with counsel to determine thebest approach or negotiation o your term sheet and identiyany unique issues presented by your proposed project.

Right of EntryIn conjunction with your selection as the developer, theDistrict will allow you and your team to enter onto the

property to conduct due diligence pursuant to a Right o EntryAgreement. Prior to executing the Right o Entry Agreement,you should take steps to ensure: (i) the parameters in whichyou can conduct your due diligence are broadly defned so asto ensure your particular testing, especially i you suspect thepresence o adverse environmental conditions; (ii) your relatedindemnifcation obligations are appropriately limited in scope;and (iii) the agreement remains in eect through the closing,to ensure your continued access to the property.

Land Disposition and DevelopmentAgreementOnce the parties execute the term sheet, the District willincorporate the agreed upon terms into a Land Disposition

and Development Agreement (LDDA). The LDDA is the prin-cipal operative document that governs your acquisition o theproperty rom the District through a ee simple conveyanceand/or a ground lease. All other major deal documents willbe negotiated concurrently with the LDDA, or subsequentexecution at the closing. The LDDA is structured similarly to atypical land purchase and sale agreement, but because o thepublic interest involved in the conveyance and developmento a District-owned site, the LDDA will also typically provideor, among other things, signifcant District control and reviewover the design, development, and operation o the project. Inaddition to deal specifc project requirements, the ollowingissues will typically be addressed in the LDDA:

Approval of Construction Plans and Drawings . The LDDAwill address the parameters o the Districts approval

rights over the developers construction plans and draw-ings. From the developers perspective, it is importantto incorporate sucient exibility to address possiblesubsequent zoning requirements and non-materialchanges in the plans and drawings.

Other District Approvals. The LDDA will also address theDistricts approval rights or items such as the projectbudget and unding plan, selection o the generalcontractor and other proessionals, easements andcondominium documents, aordable housing and retailleases, and community outreach plans. The extent andparameters o such District approval rights should be gov-erned mainly by the extent o the Districts participatinginterest in the operation o the project, or whether theDistrict will be a party to the subject instrument.

Construction Consultant. The District will likely requirethe developer to hire an independent constructionconsultant to report to the District on matters such asthe conormity o the construction to the approvedplans. Since most project lenders and equity investorswould likely require their own construction consultant,it is important to address this District requirement in amanner so as to avoid conicts and duplicate costs to thegreatest extent possible.

Assignment/Transfers . In order to ensure that the selecteddeveloper remains responsible or the actual constructiono the project, the District will likely place restrictions ondeveloper assignments and transers prior to achieve-ment o stabilization. It is important that each developer

consider its long-term plans or ownership o its projectand negotiate the requisite exibility with regard topossible assignments and transers.

Local Retail Requirement. I the project includes a retailcomponent, the District may require certain minimum set-asides or retailers that are local and/or Certifed BusinessEnterprises (CBEs) at reduced rental rates or a designatedperiod o time. In such event, the extent o the Districtslease approval rights and the subordination o same to anylender approval rights, must be addressed in the LDDA.

D.C. Council Approval. Once the parties fnalize the LDDAand related transaction documents, the District will needto obtain D.C. Council authorization in accordance withD.C. Code 10-801 beore the District may execute the

LDDA. D.C. Council authorization normally provides ora two-year period rom the date o the authorization toconsummate closing under the LDDA. Your ailure to closeby such date will result in the Districts ability to exerciseits remedies under the LDDA, which typically includethe right to terminate the LDDA. The impact o Districtdeaults and orce majeure events upon such outsideclosing date, and the conditions under which the Districtwould agree to seek an extension o its authorization,must be negotiated and set orth in the LDDA.

DC LAND DeAL

Understanding the Land Deal

With the District of Columbia

Edward M. Rogers

Debra D.

Yogodzinski

John H. Brown

Arent Fox LLP




Its not just a transaction,

its a relationship

1725 DESALES STREET, NW, SUITE 401 WASHINGTON, DC 20036

(202) 331-0901 [email protected]

At Terra Nova, our relationships with our clients endure

because of the unparalleled service we provide on every

transaction. Let us employ our decades of combined

experience to service your title insurance transactions in the

DC, Maryland, Virginia and national real estate markets.

Contact Christopher Clarke or Jennifer Brown

202.638.3000 akridge.com

Acquisitions

Asset and Portfolio Management

Build to Suit

Construction ManagementDevelopment

Leasing

Property Management

In every aspect of commercial

real estate, Akridge strives to

exceed all standards.

Building

Excellence

PROUD CORPORATE SPONSOR 20012010

Community

ImprovementDay

REAL ESTATE DEVELOPMENT, MANAGEMENT, INVESTMENT555 THIRTEENTH STREET NW, WASHINGTON , DC 20004TELEPHONE: 202.347.6337 FAX: 202.347.2802
http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.tnovatitle.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.akridge.com/http://www.tnovatitle.com/http://www.skbarch.com/http://www.akridge.com/


9/289

www.DCBiA.org


Over the past two years, the state o the municipalbond market can best be described as on lie support.However today, as a result o the Obama Administrations

New Issue Bond Program, the District o Columbia Housing

Finance Agency (DCHFA) is on track to exceed any oits previous one year totals in mortgage revenue bond

issuances. We are fnally hearing good news rom investors,

developers and public ocials the market is back.

The Market Meltdown: In 2007, the national housing

bond market peaked. The upward market trend that had

been building or several years reached its apex with a

notable 61% increase in market activity between 2005 and

2007. However, increased bond sales activity rom $9.4 bil-

lion to $16.1 billion between 2005 and 2007, took an even

more precipitous drop o 75% when sales ell to $4 billion

in 2009. Similarly, the mortgage revenue bond market in

the District slowed signifcantly in calendar year 2009 with

the DC Housing Finance Agency issuing a mere $17 million

in bonds or only one project.

The Fix: In response to a sudden about ace in the credit

and capital markets, the previous and current administra-

tions proposed two economic stimulus bills to Congress,

the Housing and Economic Recovery Act o 2008 (HERA)

and the America

Recovery and

Reinvestment Act

o 2009 (ARRA).

Taken together,the two pieces

o legislation

approved over

$1 trillion to

stimulate the

American economy.

The New Issue Bond Program (NIBP): On October 19,

2009, the Obama Administration used HERA authority to

create a new initiative or state and local housing fnance

agencies (HFAs) called the New Issue Bond Program (NIBP).

The program was implemented through a partnership

o the U.S. Department o the Treasury, Fannie Mae and

Freddie Mac and was designed as an additional tool tohelp stabilize the U.S. housing market by providing tem-

porary fnancing or HFAs to issue new mortgage revenue

bonds. As a result, bonds totaling more than $15 billion

were issued nationally.

AffDABLe hUSiNG eBUiNDS

Obamas New Issue Bond Program

Harry D. Sewell

Executive Director

District of Columbia

Housing Finance

Agency

Real Estate Survival Services

Accounting: audits and financial statement reviews, accounting

outsourcing, acquisitions, due diligence, construction contract audits

Tax: tax compliance and planning services, innovative tax solutions for

companies, principals and partnerships

Consulting: cost segregation studies, private placement, financial and tax

modeling, equity and debt offerings

1730 Rhode Island Ave., NWSuite 800Washington, DC 20036202.296.3306

Call Brian McQuade at202.296.3306 for a review of yourorganizations financial and taxstrategies.

McQuadeBrennan, LLPWWW.MCQUADEBRENNAN.COM

http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/http://www.mcquadebrennan.com/



Vie fm the tp


11/2811

www.DCBiA.org


Vie fm the tp

Vie fm the tp continued from page 1

Property Value Enhancement

Transit investments have a solid history o increasing property values.

When new transit is announced, property values increase exponen-

tially, then generally plateau upon completion o construction orcontinue to increase with system expansion.

Robert Charles Lesser Company (RCLCO), an international real estate

advisory frm, has generated projections or property value increases

along the Districts H Street line based on Portlands experience with

streetcar-related development. The projected average value increases

or properties located within two blocks o the line are dramatic:

approximately 69 percent or single amily homes; 32 percent or raw

land; an average o 20 percent or condominiums, apartments, and

hotels; and 13 to 15 percent or oce and retail. These numbers do

not account or the eects o zoning changes, which make the value

proposition even more conservative. And these projections are just or

the frst fve miles o DCs proposed 37-mile system.

Transportation Impacts

Washington continues to get denser, as infll sites and emerging

markets respond to new development. Our height restrictions have

developers constantly seeking and planning creative ways to maxi-

mize densities wherever appropriate. As new retail, oces, residences,

and entertainment uses emerge and make our city more interesting

we put added strain on a very fnite transportation inrastructure.

We need to constantly fnd new and ecient ways to move people

into and around our city. Streetcars oer an attractive and ecient

alternative to bus and auto trips. A streetcar can hold 71 percent more

riders than a 40-oot bus and wont contribute to tailpipe emissions or

our dependence on oil. Experience in other cities clearly shows that

ridership on streetcar lines ar exceeds that achieved on comparablebus lines. Portland Streetcar Inc. reports that a streetcar attract 30 to

50 percent more ridership than a comparably routed bus. A Tacoma,

Washington, streetcar route that replaced a bus line saw ridership

triple within a year.

Why Streetcar?

Many o the development benefts o streetcars mentioned

above can be attributed to other orms o mass transit as

well. But streetcars unique attributes in terms o cost,

building logistics, and transportation unction make them

the right option or Washington, DC.

Generally, streetcar construction is limited to the top o theroadbed and can be built very quickly. Portland built its frst

line at a pace o one block per month. Shorter construction

schedules mean less disruption to business, and, when the

economic benefts are layered in, the investment argu-

ments become even more compelling. Streetcars, thereore,

oer one o the most cost-eective new investments we

can make in our transportation inrastructure. Per-mile

construction costs are less than 18 percent o the price

o building Metros Silver line, or example, which total

$226 million per mile. Experience in other cities has also

demonstrated that operating a streetcar system can be

more aordable than comparable rail or bus service.

Finally, streetcars can make a contribution to the areas development

environment that compliments and enhances rail transit. Where

rail transit is designed to carry lots o people over long distances at

high speeds, providing the nodes or transit-oriented development,

streetcar routes support linear development by radiating out romthose nodes. Such linear development links neighborhoods that

otherwise lack good transit connections. Smaller than trains, streetcars

travel shorter distances and move at the speed o other trac. They

provide that last mile connection that makes heavier rail work better.

The Need For Private Sector Support

DC city leaders, including Tommy Wells, Jim Graham, Gabe Klein, and

Scott Kubly, among others, have shown the vision and commitment to

champion the streetcar network. Even more importantly, the city has

indicated an interest in engaging the private sector in the planning

o the system and its operations. Build-out o the streetcar plan will

require thoughtul public-private collaboration to establish construc-

tive fnancing solutions. The creation o the New York Avenue Metrostation provides proo that such collaboration can work to create a

transportation and economic development tool that is a win or all

involved.

But the uture o streetcars in Washington is ar rom assured, as

evidenced by the challenge o maintaining unding in the Council

budget. Spending on transportation inrastructure has long been a

struggle in the District with its competing spending priorities, and

current budget diculties dont make things any easier. While our

metrics may be a little dierent, the public and private sectors can

both recognize the strong return on investment potential o streetcars

The private sector needs to be an active part o the solution in seeing

that streetcars return to Washington streets. While there are some

transportation oerings rom the past that should stay in the past the Pinto comes to mind good ideas like the streetcar should clearly

be a part o our uture. s



VOA Assoc ia tes , Inc .

CHICAGO l DUBAI l INDIANA l ORLANDO l SAO PAULO l SEATTLE l SHANGHAI l WASHINGTON DC

WASHINGTON DC DESIGN STUDIO / 722 12TH STREET SUITE 100 WASHINGTON DC

TELEPHONE 202.822.8227 / FACSIMILE 202.822.3898 WEBSITE WWW.VOA.COM

CONTACT JOHN JESSEN, AIA, NCARB, IIDA

a r c h i t e c t u r e + p l a n n i n g + i n t e r i o r d e s i g n

PHOTOGRAPHY NICK MERRICK OF HEDRICH BLESSING

mAKet AtCh continued from page 3

mAKet AtCh

extend use o DOEs weatherization programs to certain multiamily

housing properties. Unortunately, at the local level, old habits die hard

and many jurisdictions continue to ocus on weatherization o single

amily units, turning a blind eye to the critical need to weatherize larger

multiamily properties. Cynics will note that even though conservation

experts suggest that signifcantly greater savings per dollar is achieved

by reducing energy demand at large multiamily properties, mayors

generally score more political points by supporting programs to widely

distribute weather stripping to single amily dwellers.

I you support eorts to advance energy conservation eorts at public

housing and government-assisted rental properties, dont despair.

Legislation is pending on Capitol Hill that will give owners increased

incentives to make their buildings more energy ecient. For their part,

government ocials seem reasonably open to suggestions or sensible

reorm. In the interim, small sums o stimulus monies or green retroft

are owing and the notice o unding or another (again small) Energy

Innovation Fund will soon be issued. While much o the greening eortto date has been directed toward making the ederally-impacted

housing portolio more energy ecient, the drum beat signals that

private buildings are the next rontier. This may be a good time to move

your best ideas to the oreront, through DCBIA or your national trade

associations.

HUD and VA: Addressing the Needs of Homeless

Veterans:New Ways of Transforming Distressed

Public Housing (HHS and DE to step up)

A new plan to end homelessness among military veterans is expected

to soon hit the Presidents desk. Federal data demonstrates that

veterans are overrepresented among the total homeless population.

Early on, HUD Secretary Donovan and VA Secretary Eric Shinseki

committed to meeting the permanent housing needs o homeless

vets. They created benchmarks to allocate unds to public housing

authorities and dedicated VA case managers to meet veterans housing

needs. Despite eorts to date, we are ailing to address the needs o

our troubled veterans. In the District and elsewhere, the challenge

o providing permanent housing or veterans is simply not a priority,

although many analysts expect increased political pressure on local

housing ocials rom veterans groups i, as anticipated, the population

o homeless vets swells with those returning rom the wars in Iraq and

Aghanistan.

With respect to improving the lives o other needy populations,the Administration soon will make available $65 million in competitive

Choice Neighborhood Initiative pilot grants. Watch or a ormal Notice

o Funding Availability this summer. This is a test eort to replace the

HOPE VI program used to redevelop some o the nations worst public

housing. Similar to the sustainable communities initiative described

above, the choice neighborhoods eort advances sustainable mixed-

income neighborhoods by linking housing, transportation, and jobs.

What makes this eort unique is that the government seeks to also

address the need or educational opportunities, including early

childhood development yet another example o silo busting. s
http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/http://www.voa.com/


13/2813

www.DCBiA.org


I you are a commercial building owner, or areinvolved in the design o a government building,you may have government-provided monies avail-able to you that can help make your buildings more

energy ecient.

The Section 179D tax deduction allows a taxpayerto take a deduction or part or all the costs oenergy ecient commercial building propertyplaced in service between January 1, 2006 andDecember 31, 2013. The deduction is available tocommercial building owners and primary designerso government buildings or the installation oenergy ecient lighting, HVAC (heating, ventila-tion and air conditioning), hot water systems andbuilding envelopes (walls, windows, etc.). These

projects must exceed a specifed energy eciency standard but can resultin a signifcant tax savings when implemented.

Representative SavingsReznick Group believes that the 179D deduction oers a signifcant taxsavings opportunity or a variety o our clients notably commercial realestate developers, architectural and engineering frms, and designers. Thechart below provides examples o the value o this tax deduction or aproject based on a buildings square ootage:

Square ft. Lighting HVAC Buildingenvelope

Total

Min.deduction

Max.deduction

Max.deduction

Max.deduction

50,000 $15,000 $30,000 $30,000 $30,000 $90,000

100,000 $30,000 $60,000 $60,000 $60,000 $180,000

250,000 $75,000 $150,000 $150,000 $150,000 $450,000

500,000 $150,000 $300,000 $300,000 $300,000 $900,000

750,000 $225,000 $450,000 $450,000 $450,000 $1,350,000

1,000,000 $300,000 $600,000 $600,000 $600,000 $1,800,000

Section 179D Who Benets Most?Architectural and engineering rms that design government build-ings can reap signifcant tax savings benefts rom the 179D. Whenever aproject is a government building, including K-12 public school projects,

the designer may be entitled to the 179D deduction. The deduction hasenabled some design frms to experience ZERO income tax liability or2006, 2007 and beyond.

CmmeCiAL ppetY tAX DeDUCtiNS

Understanding the Section 179D Tax Deduction

Lorraine Reale

Principal, Reznick

Group

Get the Breaking Ground daily e-mail update and have an edge

in the real estate industry. Breaking Ground features all the latest

commercial real estate news and a comprehensive calendar of thebest business events in Greater Washington.

wbjbreakingground.com

Get the Breaking Ground e-mail sent to your inbox

everyday at 11:30 a.m. Sign up at

Sponsored by:

CC S

Get the inside scoop.

Greater Washingtons Real Estate Quarterly

Reach commercial real estate insiders

by advertising in the industry publication

they turn to for the latest scoop.

Greater Washingtons commercial real estate

quarterly magazine, OnSite, will publish its fall

issue May 21. The space deadline is April 16.

For advertising information, call Tracy Merzi,

Advertising Director, at 703.258.0850 or e-mail

at [email protected].

http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/http://www.wbjbreakingground.com/


14/28


15/2815PIPELINEJUE/JULy 2010

HY LOOIGH ND

OW?

tHe vIeW frOm

YOur DesK Has

Never beeN sO

spectacuLar.

With 600 shops and

restaurants, seven hotels,and three Metro stations

at your ngertips, bragging

rights come standard with

every ofce lease signed

in the Golden Triangle. WWW.GOLDENTRIANGLE.COM

Donohoe Real Estate Services

Donohoe Construction CompanyDonohoe Development Company

Donohoe Hospitality ServicesComplete Building Services

2101 Wisconsin Avenue, NW Washington, DC 20007

202.333.0880www.donohoe.com

Eastern Testing

and Inspection

Corporation

Main Office:12505 Park Potomac Ave., Suite 200

Potomac, MD 20854301.881.8313 (p) ~ 301.881.6722 (f)

Charles Mitchell-Vice [email protected]://www.skaengineers.com

A Subsidiary of SK&A Structural Engineers

ETI HOUSTON,TX

AUSTIN,TX

WASHINGTON,DC

SANANTONIO,TX

PRE-CONSTRUCTION|GENERALCONTRACTING|DESIGN/BUILD

207APERRYPARKWAY,SUITE1,GAITHERSBURG,MARYLAND20877PHONE:301.519.2288|WWW.HARVEY-CLEARY.COM|FAX:301.519.9677

OFFICE

INTERIORS

INSTITUTIONAL

INDUSTRIAL

HEALTHCARE/RESEARCH

HOSPITALITY

RESIDENTIAL

RETAIL
http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.goldentriangle.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.donohoe.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.skaengineers.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.harvey-cleary.com/http://www.skaengineers.com/http://www.goldentriangle.com/http://www.donohoe.com/



DC LAND DeAL continued from page 7

DC LAND DeAL

Ground LeaseGiven the Districts preerence to stimulate economic developmentwhile retaining ee ownership and control o its land, many developmentprojects with the District involve long-term ground leases. The orm o theground lease will typically be attached to the LDDA as an exhibit. Whilethere will be some specifc requirements unique to a deal with the District,negotiating a ground lease with the District should be approached in thesame manner as a similar transaction with a private land owner. The goalo the developer should be to ensure adequate exibility and controlover the development and operations o the leasehold improvements,and to structure the transaction so as to make the lease and develop-ment fnanceable on market terms. Several issues or consideration whennegotiating a District ground lease are as ollows:

Ownership Structure. I there are multiple uses and componentswithin the project, you will need to determine whether to use a singleground lease or multiple ground leases, and whether a condominiumregime or regimes, or subdivision into air rights parcels should beutilized. I more than one ownership entity is to be used, issues o

control and development responsibility will need to be negotiatedwith the District.

Leasehold Mortgagee Provisions. Among the most important provi-sions to be negotiated and incorporated into a ground lease are thosegoverning the rights and protections o lenders in the event o adeveloper deault under the ground lease, and the interaction o samewith the Districts deault remedies. Extended cure rights, subordina-tion and recognition agreements are among the related issues to beaddressed in the ground lease.

Casualty/Condemnation. I the project is damaged by casualty, theobligation to rebuild the improvements should be made subject tothe lenders rights to receive the insurance proceeds, and should belimited to the actual insurance proceeds received by the developer.Similarly, in the event o a condemnation o the project, the allocation

o the award should go frst to the project lender, and thereater beapportioned between the developer and the District based on therelative value o the leasehold improvements and leasehold estate.

Subtenants/Non-Disturbance Agreements. To acilitate commercialleasing in the project, the ground lease should allow or subtenancies,within specifed parameters, and should provide or non-disturbanceprotections or the subtenants.

Construction and Use CovenantSince the LDDA is generally extinguished upon the developers acquisitiono the property, the construction obligations and related provisions in theLDDA are typically incorporated into a Construction and Use Covenant tobe executed and recorded at the closing. In addition to the constructioncovenants, the Construction and Use Covenant typically reiterates many othe other covenants the developer agreed to in the LDDA, including com-

pliance with the approved project budget and unding plan, the approvedcommunity participation and outreach plan, the First Source HiringAgreement, the CBE Agreement, and assignment restrictions. I the projectinvolves retail uses, the Use part o the Construction and Use Covenantwill set orth the developer s covenant to abide by the retail plan and localretailer requirements, as outlined above. Certain prohibitive uses may alsobe negotiated by the District in conjunction with projects retail spaces andset orth in the Construction and Use Covenant. The terms o the construc-tion related covenants should expire upon the projects completion, whilethe terms or other covenants, such as the retail uses, may continue or anextended period o time.

Aordable Housing CovenantThe LDDA will require that an Aordable Housing Covenant be executed atthe closing and recorded against the residential portion(s) o the project.The Aordable Housing Covenant will outline the developers obligationsto make a specifed percentage o the housing units in the project avail-able to low and/or moderate income residents. Each project will have itsown set o requirements as laid out in the Districts request or proposalsto redevelop the property, emphasizing the required number o aord-able units at specifed area median income levels, the requisite size o theaordable units, the exterior and interior fnishes o the aordable units,the locations and distribution o the aordable units within the residentialbuildings o the project, and the amenities to be made available to occu-pants o the aordable units. The developer will be required to determinetenant eligibility and the District will impose upon the developer anongoing annual reporting requirement on its aordable housing program.

Development and Completion GuarantyIn addition to the letters o credit to be posted under the LDDA, the

District will also typically require a Development and Completion Guarantyto be entered into by an acceptable guarantor at the closing on theproperty. The guaranty covers completion o construction o the projectin accordance with the terms o the LDDA and the Construction and UseCovenant. To provide exibility over the long term, the developer shouldnegotiate the ability to substitute a designated or existing guarantor withone o equal or greater net worth.

DeedI the transaction involves a transer o ee interest in the subject property,such interest will be transerred via a special warranty deed. The ormo deed, which will be attached to the LDDA as an exhibit, is consistentwith that o other special warranty deeds typically used in the District oColumbia, with one exception. The Districts deed will usually include aright o re-entry by the District in the event o a deault by the developer

in the completion o construction pursuant to the Construction and UseCovenant. Due to the potential draconian eect o such re-entry rights andthe potential impact on the developers ability to fnance the project, thedeveloper must be sure to negotiate adequate notice and cure rights oritsel and its lenders. The right o re-entry should expire and be releasedupon the developers completion o construction o the project.

Other Agreements with District AgenciesTwo other agreements that are typically required in any developmenttransaction with the District are the Certifed Business Enterprise Agreement(to be executed with the D.C. Department o Small and Local BusinessDevelopment), and the First Source Hiring Agreement (to be executed withthe D.C. Department o Employment Services). These agreements evidencethe Districts commitment to ensure participation o District residents andDistrict based businesses, particularly local, small, and disadvantage busi-

ness enterprises, in the development, equity investment and contractingopportunities derived rom the redevelopment o District-owned sites.These agreements must be negotiated with the respective agencies andfnalized prior to the developers execution o the LDDA.

ConclusionThe above discussion highlights several o the typical deal documentsand issues you will ace when engaging with the District to redevelop aDistrict-owned site. The key to a successul negotiation with the Districtis to be pro-active, persistent and consistent in addressing the numerousissues involved in the transaction. Experienced counsel will help you tonavigate the negotiations in an eective and ecient manner. s


17/2817PIPELINEJUE/JULy 2010

Whether its maintenance or renovation,give your project the energy it deserves.

From everyday maintenance and building renovations to green building construction, the high-powered

contractors and electricians of NECA and IBEW Local 26 are the cost-ef fective, 24/7 solution when

you need an electrical contractor in Washington, Maryland and Virginia. Theyre highly-trained,

certied in the latest energy-saving technology and motivated to meet your budget and schedule.Find out more today at electricalalliance.org
http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/http://www.electricalalliance.org/


18/28


19/2819

www.DCBiA.org


On Thursday, evening, May 20, at the Hilton Washington, hundreds o DCBIA members and their guestscelebrated the 26th Annual Awards Dinner and the presentation o the Associations 2010 AchievementAwards to a stellar group o individuals who have made remarkable contributions to the District o Columbia,

making it a sought ater place to live and visit and to work and do business. The celebrated honorees Deborah Ratner Salzberg, President o Forest City Washington, Bob Peck, Commissioner o the GSA Public

Buildings Service, and Allen Lew, Executive Director o the DC Oce o Public Facilities Modernization, received

the Achievement Awards rom a group o highly accomplished presenters, including Congresswoman Eleanor

Holmes Norton, Mayor Adrian Fenty and Councilmember Jack Evans.

In a slightly dierent twist this year, original caricatures o the Achievement Awards (the crystal obelisk),

were skillully sketched by architect Darrel Rippeteau and presented to the awardees: Big Bob The Other

Washington Monument, Dedicated Debby Dedicated to Urban Development, and Magic Allen DC

School Children Discover a New Landmark. We thank Darrel or his incredible creativity and enormous

contribution to this years awards program!

The event was a huge success or DCBIA as evidenced by the buzz in the room and the many guests who stayed

long into the evening catching up with colleagues. Surprisingly, despite the continued tight economy, DCBIAexperienced a 20% increase in both sponsorships and attendance. We wish to express our great appreciation

to all who participated. Hope to see you again next year!!

HAPPY SUMMER EVERYONE!!

AADS DiNNe 2010

DCBIA Members Celebrate 2010 Achievers

Christopher H.

Collins

Holland & Knight

LLP

Ernest Drew Jarvi

CB Richard Ellis

Co-Chairs

DCBIA Awards

Dinner



BBEENNEEFFAACCTTOORRSSAkridgeArent Fox LLPArnold & Porter LLPBaker TillyBalfour Beatty ConstructionBernstein Management CorporationBoston PropertiesBrailsford & DunlaveyBrookfield PropertiesClark Construction Group, LLCDouglas Development CorporationForest City Washington

Fort Lincoln New Town/ConcordiaGroup/CSG Urban Partners

Goulston & StorrsHines | ArchstoneHolland & Knight LLPThe JBG CompaniesMcKissack & McKissackMCN BuildPillsbury Winthrop Shaw Pittman, LLPRepublic Properties Corporation

William C. Smith & CompanyTerra Nova Title & Settlement ServicesTishman SpeyerTurner Construction Company

Venable LLPVornado/Charles E. Smith

PPAATTRROONNSS

High Tide Design, LLCLeftwich & Ludaway, LLC

Washington Business Journal

TTAABBLLEESSPPOONNSSOORRSS

Anacostia Holding CompanyThe Bozzuto GroupCB Richard Ellis, Inc.DLA PiperDRI Development Services/Transwestern

Ellisdale ConstructionForrester Construction CompanyThe George Washington UniversityHESS Construction + Engineering

JAIR LYNCH Development Partners &Greenstein DeLorme & Luchs

Louis Dreyfus Property GroupPatton Boggs LLPPEPCORIPPETEAU ARCHITECTSSaul Ewing LLP

David M. Schwarz ArchitectsSIGAL Construction CorporationSmoot Construction Company of DCSorg ArchitectsUrban PaceVOA Associates Incorporated

CCOONNTTRRIIBBUUTTOORRSS

AECOMBingham McCutchen LLPCommonwealth Land Title Insurance CompanyDesign AllianceEYA

Fanning Howey Associates, Inc.Grunley Construction Company, Inc.Miller & Long CompanyPerkins+Will

FFRRIIEENNDDSS

Bank of America Merrill LynchBohler EngineeringBowman Consultingcox graae + spack architectsDewberryDistrict PropertiesThe Donohoe Companies, Inc.Hughes Group ArchitectsLehman Smith McLeishLoiederman Soltesz Associates, Inc.

Manhattan Construction CompanyMcQuade Brennan, LLPMetropolitan Washington Airports AuthorityNorthwestern MutualStudley, Inc.SunTrust BankVerizon Washington, DC Inc.Wilkes Artis, CharteredThe Wilkes Company

HILTON WASHINGTON, Washington, DC

THURSDAY, MAY 20, 2010

Our Thanks!2010 Awards Dinner Sponsors


21/2821

www.DCBiA.org

PIPELINEJUE/JULy 2010 21

AADS DiNNe 2010



Contact:

*Manage, Design, and Consulting Services*

www.marcparc.com 202-464-2900

Bobby Williams - Vice President & Chief

Marketing Officer

The MarcParc Team jumps at the

chance to deliver the most return

on your parking asset!

ENGINEERING THEWASHINGTON REGION.

Loiederman Soltesz Associates, Inc. is proud to be the civil

engineer for Naonal Harbor - the regions

newest premier entertainment desnaon.

ENGINEERING|PLANNING|SURVEYING|ENVIRONMENTAL SCIENCES

ROCKVILLE LANHAM WALDORF LEONARDTOWN

www.LSAssociates.net

The Award-WinningAfrican American Newspaper

Your Link to theWashington DC

African AmericanCommunity

Over 40 Years of Positive

News About Our Communities

From Our Perspective.

Contact Ron Burke at202-561-4100 or

[email protected]

www.washingtoninformer.com

www.washingtoninformer.com

Digital & Conventional Printing

Brand & Asset Management

E-Commerce

Cross-Media Marketing

Electronic Merchandising

Variable Data Solutions

Mailing

Fulfllment

Graphic Design

Promotional Items

800.638.3508 www.hbp.com
http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.marcparc.com/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.lsassociates.net/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.washingtoninformer.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.hbp.com/http://www.washingtoninformer.com/http://www.marcparc.com/http://www.lsassociates.net/


23/2823

www.DCBiA.org

PIPELINEJUE/JULy 2010 23

AADS DiNNe 2010



CmmeCiAL ppetY tAX DeDUCtiNS continued from page 13

CmmeCiAL ppetY tAX DeDUCtiNS

Commercial building owners involved in cost segregation projectscan take these one-year deductions in addition to the cost segregationdeduction. The items typically deducted under 179D would be 39- yearassets and not reallocated to a 5 to 15 year lie. Key projects that can

qualiy or the 179D deduction include energy eciency lighting retroftsand geothermal and thermal storage. It is important to note that the costsegregation must be done beore the energy retroft has started in order toproperly identiy and value the items that will be replaced in conjunctionwith the planned energy retroft.

Qualifying for the Section 179D Deduction.Have You Found the Money?The Section 179D tax deduction can provide signifcant cost savingsin two ways: (1) overall tax savings and (2) cost savings due to energyeciency improvements. But beore you start counting the money youcan save rom 179D, it is important to ask yoursel the ollowing questions:

1. Are you are a designer, architect, engineer, contractor, environ-

mental consultant or energy services provider who created orwill create the technical specifcation or a new or reurbishedgovernment owned building that incorporates energy ecientcommercial building property between January 1, 2006 andDecember 31, 2013?

2. Do the energy eciency improvements to your commercialbuilding property include a part o the interior lighting systems,

heating, cooling, ventilation and hot water systems or thebuilding envelope? Think about the steps you are taking or didtake to LEED certiy buildings.

3. Will the property reduce the systems total annual energy and power

costs by 50 percent or more? I the property will result in a less than50 percent reduction, there is a sliding scale which may still yield adeduction. The calculation o energy eciency is intended to be uelneutral, e.g. a heating source can be a gas or oil urnace.

4. Do you have a written allocation statement with the required inor-mation either as a separate document or a part o your contract? Thestatement will clariy that you have the right to take the deduction orwhat portion o the deduction has been allocated to you.

Answering yes to each o these items may lead to a tax deductionresulting in a permanent beneft. It is important to note that it is not toolate to review old projects and assess i you could take advantage o thisdeduction. An amended tax return can be fled or open tax years.

With governments and communities greening up their ootprints and

ocusing on LEED certifcations and energy eciencies, the opportunityto utilize the Section 179D deduction is here. Make sure you bring this ideato the table. Who know, you may have ound money!

For more inormation on Reznick Group, including our services relatedto the Section 179D tax deduction as well as cost segregation studiesor commercial property owners, please contact Reznick Group atwww.reznickgroup.com/contact-us. s
http://regionaltitlecorp.com/http://www.rcdh.com/


25/2825

www.DCBiA.org


AffDABLe hUSiNG eBUiNDS continued from page 25

AffDABLe hUSiNG eBUiNDS

On November 13, 2009, DCHFA was allocated $193 million under NIBP o

which it allocated $168 million to its multiamily program and $25 million

to single amily activities. As a result o HERA legislations sunset date, all

bonds under NIBP had to be issued by December 30, 2009. Board, sta

and our partners rallied to meet the deadline which included securingemergency resolutions rom the DC City Council just beore its year-end

recess. The DCHFA team navigated this transaction through unchartered

waters as this has not been done beore.

Once the bonds were issued, they were securitized by Freddie Mac with

proceeds escrowed or drawdown by DCHFA as its development projects

close. Additional NIBP requirements include a limit to each HFA o only

three opportunities over the course o CY 2010 to break escrow andthe

requirement that all projects are closed and unded beore December 16,

2010. Undoubtedly, the undamental goal o the NIBP is simple, albeit, the

programs requirements or use are multi-layered and complex.

The First Escrow Break: DCHFA became the frst HFA in the country

to close a multi-deal transaction under NIBP when it completed its frst

escrow break on April 14, 2010. The frst escrow break included three proj-

ects that had been languishing in its pipeline as a result o the restrained

capital market. DCHFA issued NIBP bonds and market bonds purchased

by private investors in the amounts o $19.5 million and $6.5 million

respectively to und Village at Chesapeake, Webster Gardens and Fort View

Apartments. The transaction resulted in the unding o three multiamily

projects or a total development cost o $55.8 million and the preservation

o 232 units o aordable housing in the District.

The Projects:Webster Gardens, one o the earliest garden-style apartments

built in the city, is also home to some residents who have lived there or

over 50 years. The 52 unit complex located in the Petworth neighbor-

hood o Ward 4 and built in 1921, is on the National Historic Registry and

oers one and two bedroom apartments. The project is being developed

by a partnership between Somerset Development, THC Aordable

Housing, Inc. and the tenants association. A somewhat unique eature

o this project is that the tenants association will be entitled to 10% othe projects annual cash ow, a projected $100,000, or use as a resident

services und. The projects total development cost is $13 million and upon

completion o the renovation, three o the units will be Uniorm Federal

Accessibility Standards (UFAS) compliant and made available to amilies

with mobility impaired members.

Fort Stevens Apartments is a 62 unit vacant property in the Brightwood

neighborhood o Ward 4. This two, our-story building project built in 1939

is also on the National Historic Registry and will oer one, two and three

bedroom units upon completion. This project is also being developed by

the Somerset Development /THC Aordable Housing, Inc. partnership or a

total development cost o $19.2 million.

The renovations oVillage at Chesapeake, a 118 unit complex o fve, our-

story buildings located in the Congress Heights neighborhood o Ward 8,

included new kitchens, bathrooms and ooring with additional improve-

ments to landscaping, encing, signage, security and lighting. The total

development cost o the renovation was $23 million and the project wasdeveloped by a or-proft aordable housing Connecticut-based company

called VestA Corporation.

The Agency: DCHFA was established in 1979

to stimulate and expand homeownership and

rental housing opportunities in Washington,

D.C. It accomplishes its mission by issuing

mortgage revenue bonds that lower the

homebuyers costs o purchasing homes

and the developers costs o acquiring,

constructing and rehabilitating rental

housing. DCHFA embraces its responsibility

with conviction and pledges its best eorts to

serve as the citys champion or homeowners

and renters and to act as the citys principalcatalyst or neighborhood investment. For

more inormation on DCHFAs participation in

the NIBP or or general inormation about the

agency and its programs, email your request

to [email protected] or visit the website at

www.dcha.org. s



5100 WIsOsI AVEUE, .W., sUIE 301

WAshIO, .. 20016

202/966-8665 n AX 202/966-3222

WWW.bIA.O

President . . . . . . . . . . . . . . . . . . . . . . . Merrick T. Malone

Vice President . . . . . . . . . . . . . . . . . . . . Matthew J. Klein

Vice President . . . . . . . . . . . . . . . . . . . . . . . . Jair K. Lynch

Vice President . . . . . . . . . . . .Deborah Ratner Salzberg

Secretary . . . . . . . . . . . . . . . . . Christopher J. DonatelliTreasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Todd Stokes

Gail Edwards

Executive Vice President & Managing Editor

The PIPELINE is published bi-monthly by the

District o Columbia Building Industry Association.

Graphic Design by DesignAlliance.com
http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.dcbia.org/http://www.gdllaw.com/http://www.dcbia.org/http://www.ecslimited.com/http://www.wilkesartis.com/


27/28
http://www.dcibts.org/


28/28

goulstonstorrs.com

newfaceWhen it comes to projects that

reshape skylines and revitalize

neighborhoods, Goulston &

Storrs gets your deals done.

That is why we are proud to welcome

eleven leading real estate professionals

to our Washington office.
http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/http://goulstonstorrs.com/

pipeline dc building industry assn july 2010

Documents