As Huge St. E's Project Gains Steam, Developers Hope It Can Lift Up Southeast D.C. Community

The massive redevelopment of the 350-acre St. Elizabeths campus, a plan in the works for nearly two decades, is picking up steam as new projects deliver, as D.C. seeks developers for the remaining parcels and as the federal government works to finish the Department of Homeland Security’s new headquarters.

As the redevelopment comes together in the Congress Heights neighborhood in Ward 8, a portion of D.C. that has been underserved and underinvested in for decades, development teams are working to ensure the execution of the plan lives up to the socially conscious vision. 

“The challenges historically have been that lack of access to capital, lack of access to resources," Mehul Vora, vice president of Neighborhood Development Co., the developer building on St. Elizabeths East's Parcel 13, told Bisnow.

“What we see on the ground are businesses that are coming forward to say ‘we have the skills, we have the people; give us the opportunity.’ And it's really incumbent on companies like ours to make sure that we are fully utilizing all of those resources, fully engaging the strengths of Ward 8.” 

The 359-acre property was once home to one of the nation’s most famous mental health facilities. It was established by Congress in 1852, at the urging of 19th-century social activist and mental health advocate Dorothea Dix, and made a name for itself as the first facility devoted to treating the U.S. Armed Forces as well as African Americans.

The hospital was one of the first in the country to practice psychoanalysis, beginning in 1908. Occupancy surged after World War II, with St. Elizabeths serving around 7,500 patients per day, according to the National Park Service, and in 1964, a children's center was constructed. The institution began struggling with funding in the 1970s, according to NPS, and the old hospital west of Martin Luther King Boulevard shut its doors in 2003. The entire campus became a National Historic Landmark in 2005. A behavioral health facility run by D.C. operates on the east side of the campus today. 

A plan to redevelop the site has been in the works for nearly two decades. Split in two, the campus is set to be a vibrant mixed-use community with office, retail, residential, entertainment and healthcare uses on the east; and to the west, a new headquarters facility for the Department of Homeland Security. 

On the west side, development has been underway for DHS’ new 4.1M SF headquarters across 176 acres since 2009. Congress had allocated $2.8B as of last June, when the Government Accountability Office found it needed more funding. The General Services Administration is asking for $193.4M in its fiscal year 2024 budget.

In February, the GSA began seeking builders for a 620K SF office for the DHS' Cybersecurity and Infrastructure Security Agency as part of the St. Elizabeths West campus, the Washington Business Journal reported. 

Meanwhile, St. Elizabeths East is an 18-parcel puzzle that envisions a vibrant mixed-use and mixed-income community in a historically underserved part of the city. Already in place is a RISE community center, the 4,200-seat Sports and Entertainment Arena — home to the WNBA’s Washington Mystics and a practice facility for the NBA’s Washington Wizards — a 22K SF interim retail village and a 252-unit apartment building. 

The development’s first retail came online last month with Sycamore & Oak, a temporary retail village housing 13 Black-owned local businesses, all led by residents in Wards 7 and 8. The new retailers include a Black Bella Spa & Wellness Center, The Museum DC, WeFitDC, Dionne’s Good Food, art boutique Soufside Creative and The Fresh Food Factory Market.

“We’re creating a Black Wall Street in Southeast that like — this has never been done before,” Keyonna Jones, the owner of Soufside Creative, told DCist last month. 

NDC's Vora said the retail village's opening has had an outsized impact on the area. 

“Honestly, the opening of that facility has been — it’s hard not to use sort of trite phrases, but a ‘game changer’ is probably the right one," he said. “It centers the entire campus.” 

D.C.'s Office of the Deputy Mayor for Planning and Economic Development has selected developers for most of the parcels on the site, four of which will be built by Redbrick LMD.

The largest of Redbrick's phases is Parcel 15, a five-building centerpiece to the St. Elizabeths East campus. The site, now housing the interim retail village, is ultimately planned for 650K SF of residential, office, hotel and retail development. 

Redbrick Managing Partner Tom Skinner, speaking at a Bisnow event last month, said the firm's development at St. Elizabeths East, as well as its Bridge District project in Anacostia, are part of its "triple bottom line" strategy.

"We measure not just our financial returns, but also our environmental impact and social impact," Skinner said.

He added that D.C.'s Green Line has become a popular Metro line for young people, with other developers building huge projects around the Waterfront and Navy Yard stations on the other side of the river.  

"We said, 'let's look at the Anacostia Metro and let's look at the Congress Heights Metro,' and we've assembled the largest landholdings around those two Metro stops," he said. "We think that that is part of where demographics are moving, and people are continuing to move south and east."

In February 2022, D.C. and multiple health system partners broke ground on a new $375M hospital on the St. Elizabeths East campus, named the Cedar Hill Regional Medical Center, GW Health. D.C. is also planning a new library on the campus, and last month Bowser announced the selection of Perkins&Will and Turner Construction to design and build the 20K SF library, expected to open in 2027.

Bowser's administration is steadily releasing requests for proposals for the remaining land on the campus. Last month, the city released an RFP for Parcel 6, a 4-acre plot approved for office, residential and commercial, and it plans to release a request for a Parcel 2 developer this summer.

NDC was awarded Parcel 13 at the end of 2020, and a partnership led by the Menkiti Group was awarded parcels 7, 8 and 9 in December.

Both development companies are Black-owned, and their executives say it is important for them to provide services to a historically underserved community.

“There's still a big focus east of the river of bringing retail amenities that exist in other parts of the city, bringing those to Ward 8, so that folks can shop in their community and not have to travel to the other side of the river," Menkiti Group Executive Vice President of Financial Development Brian Burke told Bisnow. "So bringing retail amenities was important.” 

Menkiti is planning to bring over 30K SF of retail to Parcel 7. Burke said the firm has soft commitments from TGI Fridays, Creative Ground Coffee Shop, DC Credit Union and Grub Rockstar, a catering company planning to open a brick-and-mortar location. 

Parcels 8 and 9 will be dedicated to social services and arts and culture businesses. Burke said planned tenants include Step Afrika!, Shop Made in DC, University of the District of Columbia, I Dream Public Charter School, Bright Beginnings, Jubilee Jumpstart, Safe Shores, Easter Seals and the Congress Heights Training and Development Corp.

NDC is planning to bring HalfSmoke and social services organization A Wider Circle to the 21K SF of ground-floor retail in its project. Vora said he expects there will be six or seven retailers in total, and the firm would like to bring a locally owned bank as well as food services. He said that a grocery store, a much-needed addition to the campus, will probably go to one of the larger parcels. 

“We take a lot of time to pull and solicit feedback from the community,” Vora said. "They have made some great suggestions for what would be helpful for the actual neighbors.”

But as this new development gets underway, local residents’ concerns about keeping the neighborhood affordable has risen to the top in their discussions with the community.

“What we've heard pretty clearly is there's a concern about being priced out of the neighborhood as new construction comes in," Burke said. 

His firm’s residential project on Parcel 7 is planned for people earning between 30% and 120% of the area median income. A 277-unit apartment complex will be available to residents making up to 80% AMI, while the townhomes will be available up to the higher end of 120% AMI.

Affordability has also been a theme in NDC’s conversations with the community, Vora said.

“There's for sure differences of opinion on what should transpire. And I think the biggest one, and the most complex one is the level of affordability that's embedded into these projects,” he said.

Of his firm's 400 rental units, 30% will be reserved for residents making below 50% AMI, and 70% will be market-rate. 

Vora said that though the breakdown is causing some debate, he believes a mixed-income community is vital to the area's success. 

“Obviously, to the extent that we can offer more affordability, it's helpful for folks who are in need," he said. "At the same time, we want to make sure that we're not concentrating that affordability — that we're also offering market-rate housing solutions, so that the community can continue to thrive."

He said DMPED has done a good job in designing the overall vision to lift up residents and create pathways to generational wealth, especially with the townhomes program. 

“I think what you see is a very thoughtful approach to engaging Ward 8 residents so that they can be a part of the creation, wealth generation that's happening on the campus,” he said. 

Menkiti Group is looking to foster that community success by hiring locally in the construction process and after the development is completed. 

"It's a big focus of ours to work with local groups that help with with training and job placement to be able to not only provide the opportunities, but also provide the training so that folks have the skills to compete for the jobs once they're available," Burke said.

With all these strategies coming together, Vora said the overall goal of the government and the developers is to see the community flourish. 

“We all have the same ultimate objective, which is to see Ward 8 succeed, and in particular to see the campus become thriving and really the next city center for the entire district," he said.