Developer Of Huge Ward 7 Project Faces Pushback After Pivoting From Office To Housing

The developer behind Parkside, a mixed-use project planned for more than 3M SF across 15 acres in Ward 7, is seeking to change the plans for one of the next phases from office to residential.

The move has spurred opposition from some community members who say the area is oversaturated with residential — especially small apartments — and who are concerned that moving away from the office space they were promised will be a setback in the economic development for the area east of the Anacostia River. 

The D.C. Zoning Commission was scheduled to review the proposal on Monday, but the developer, CityInterests, asked for it to be postponed to July 10 so Advisory Neighborhood Commission 7D could “continue to respond to issues raised by individual members of the community,” it said in a zoning filing. 

Nearly two decades into its development, Parkside has already delivered 600 residential units, including senior affordable housing, market-rate apartments and townhouses, plus a childhood learning facility and a communal green. The development also has 230 units under construction and scheduled to deliver within the next year, after it received financing in February 2022 for a pair of residential buildings on parcels 8 and 10. 

The Parkside site is steps from the Minnesota Avenue Metro station and just north of Benning Road NE. The first stage PUD, outlining the overall vision and density for the site, was approved in 2007 for 10 blocks spanning 3M SF. 

Parcel 9A was originally approved for residential use, but CityInterests made the change to office in 2017. Peter Farrell, managing partner for CityInterests, told Bisnow Tuesday it had been hoping to secure a government agency or nonprofit relocation, given the competitive prices. 

“We tried for five years to secure office prospects for this. That didn't happen,” Farrell said. 

The District government has worked to relocate agencies to neighborhoods in wards 7 and 8 that haven't historically had many office tenants, including moving the 700-person Department of General Services to the Northeast Heights development, which sits a half-mile down Minnesota Avenue from the Parkside site. But Parkside itself hasn't managed to close a deal with an agency or other large office tenant. 

Prior to the pandemic, Farrell said the firm entered into a memorandum of understanding with a large nonprofit tenant, but then the pandemic stopped the deal in its tracks.

Now, as CityInterests seeks to pivot the parcel to a 122K SF building with residential and ground-floor retail, some community members are raising concerns. 

“The office space would mean my neighbors and I could walk to work and live nearby,” said local resident Victor Booth, in testimony submitted prior to Monday’s scheduled hearing. 

“Switching back to denser residential use now … is not only dismissive of planning, it is purposely harmful in an effort to serve the applicant’s bottom-line at our expense.”

Booth’s prepared statement, along with four other written letters, also express disappointment that the switch is to apartments instead of condominiums. 

The four letters of opposition argue that the area already has enough apartment units and the community living there would benefit more from homeownership opportunities for families instead of one- and- two-bedroom rental units with limited parking. 

“Current residents want to attract longer-term residents, especially families who can create demand for retail in a ward that is a food desert that requires population density and staying power. Catering to families rather than smaller density rentals will ease parking concerns, create demand for retail, and satisfy resident concerns,” wrote resident and former ANC commissioner Artilie Wright. 

Farrell said constructing condos on Parcel 9A isn’t feasible in this economic landscape. 

“There's really no financing available today for condominium construction, and so even if we wanted to be able to build them right now, we wouldn't be able to,” Farrell said. 

“At the current construction costs, the price point that we would be delivering condominiums, if we could finance them, would be higher than some of the single-family home prices.” 

CityInterests has already constructed 100 for-sale townhomes, including market-rate and workforce units, at Parkside. 

If the zoning change for 9A does pass, there is still an opportunity outlined in Parkside’s plans for office space in future phases of the development. The H2 building of Parcel 12 has a PUD Stage 2 approval for a nine-story office building.

Residents raised concerns in their letters that the shift away from office could happen to the Parcel 12 plans as well. 

In response to a question about the plans for Parcel 12, Farrell said office remains a possibility, but he is also looking at senior housing and other types of residential. 

“That’s evolving,” he said. “I think you can plan to see ultimately residential, I think you could see condominiums there. To date the numbers haven’t made sense.” 

“The whole thesis of our housing continuum was to create multiple opportunities for people to move into Parkside under one set of life circumstances and then as those circumstances changed, they would be able to grow in place and not have to leave the community, which we thought would establish deeper roots and stronger neighborhood and community sensibilities.” 

While he said condos haven’t penciled out for Parcel 9A, he said it could still be possible to build for-sale units in future phases. 

“We really just aren’t able to build condos at this point in time,” Farrell said. “But that doesn’t preclude us from doing it in the future because the markets will change and we’ll be able to take advantage of them.” 

Farrell said his firm has been in conversation with the community since the beginning and will continue to work with it to address the concerns. 

“We’re not building one building in isolation, we're building one community,” he said. “Generally people are very supportive of the direction that Parkside is going.” 

Farrell says his firm expects to stick to its timeline of getting construction started on Parcels 9A and 9B, another planned residential building with retail, by the end of the year, despite this week’s hearing being postponed. It will move forward with plans for Parcel 12 once those sites are underway.