ANALYSIS OF THE REDEVELOPMENT LAND AGENCY
DECISION
TO SELECT REDEVELOPERS FOR PARCEL 27 AND PARCEL 29
IN THE 14TH
STREET URBAN RENEWAL AREA
I. Background and Description of Process
A. Statutory Charge of the Redevelopment Land Agency
On October 5, 1998, the Department of Housing and Community Development (DHCD), on behalf of the District of Columbia Redevelopment Land Agency (RLA), issued a Request for Proposals, which was approved by the RLA and the Council of District of Columbia, for Parcels 15, 24, 26, 27, 29, and 38 in the Fourteenth Street Urban Renewal Area. Development of this area is governed by the Urban Renewal Plan, originally adopted on December 17, 1969 and expiring on December 17, 1999.
The Board of Directors of the RLA ("Board") is statutorily charged to consider sociological and obsolescent layouts in areas where it has holdings. The Board is also statutorily charged to ensure public participation in planning and financing the development. Pursuant to these statutory charges, in the Columbia Heights matter, the Board defined the sociological and public participatory factors to include: (1) the need for expedited development in Columbia Heights; (2) the desires of the community as expressed in the Urban Renewal Plan, the charrette and the public hearings; (3) the changing nature of the regional and national economy and the potential impact of these changes on the neighborhood; (4) the potential short- term and long-term benefits of the various development schemes for the entire city; and (5) the needs of the neighborhood, especially its capacity for density prior to the civil unrest, after the civil unrest, and in its current configuration.
1. Expedited Action
Columbia Heights residents who participated in the RLA public process overwhelmingly stated the need for expedited action by the Board. To this end, the Board established an aggressive time- frame for action. While the need for new Board members to fill the 3 vacant slots on the 5- person Board required a delay in the decision, the Board, once reconstituted, established an aggressive time-frame for decision-making. In light of the urging of citizens, the Ward's council member, potential developers and non- profit organizations, the Board imposed a September 9th deadline on itself which it publicly announced at its August 4th meeting.
2. Desires of the Community
The Board established and followed a community impact process that included: a charrette to document desires of the community; public hearings with the developers; citizen hearings at the RLA office and in the community; and public mark-up of the draft ERA with the developers present. These efforts were intended to create an open participatory process that included community input; however, the Board in no way intended to abdicate its responsibility of considering additional factors beyond community desires such as the economic viability and likelihood of long-term success of the project schemes.
3. Changing Nature of Economy
The Board carried out its statutory sociological review by considering, among other things, the various development schemes and how they kept pace with the changing needs of a dynamic, cross roads community like Columbia Heights. That is, what would be the retail, entertainment, and service needs of working and middle class families and singles in a multi-generation, multiracial community into the next century? What types of jobs were likely to be held by residents and how could this development complement them? How could the Metro station best be used to strengthen the community?
4. Needs of the City
In considering other sociological factors, the Board weighed the potential impact the development could have for the City as a whole: For instance, what was the need for services, entertainment, family friendly activities, arts, and community space? Which services were provided elsewhere, and which had to be provided specifically in Columbia Heights? How would the projects encourage street life, affect safety concerns and encourage the utilization of public transportation?
6.[sic] Needs of the Neighborhood
The Board understood that Columbia Heights is more than just a neighborhood in Washington. Prior to the 1968 civil unrest, it was a principal retail thoroughfare in the city. Some reports show that rents per square foot were comparable to those on lower Connecticut Avenue as late as 1967.
The Board recognized that with a booming national economy, a soaring regional economy and a significantly reviving local economy, it was time to rebuild this once vibrant, dynamic and central retail core to meet the needs of the future generations of urban dwellers. In doing so, the RLA chose not look to rebuild the retail of the past, but the retail and entertainment of the future. The Board would look to ensure that mistakes of the past - exclusion and limited local resident ownership - were not replicated. They would embrace the multi-cultural, age- diverse and mixed income resident population that Columbia Heights has always had and has retained, despite its 30 year deprivation of services. The Board believed it had a strong foundation to build upon and the community and the economy were ready for bold initiative. In selecting DC-USA and Tivoli Partners, the RLA Board believes it has accomplished this objective.
B. History of the Columbia Heights Redevelopment Process
A majority of the parcels being offered were the subject of a previous offering dating back to November 1979 and had been held by an uncommitted developer until his termination by the Board in November 1996 and his release of his agreement with the RLA by a settlement dated July 27, 1998. Partially in recognition of the community's sense of deprivation for having development denied them for nearly 20 years, the Board insisted that any new offering document be based, to the greatest extent possible, on the needs and desires of the community. To implement this goal, a community charrette was held in November 1997 that involved over 300 community residents and 30 design professionals. The charrette sessions resulted in the development in March 1998 of the "Columbia Heights Metro Station Area Community-Based Plan."
According to the Urban Renewal Plan, the allowable uses for parcels 15, 26, 27 and 29 include apartment houses, retail and personal service establishments, restaurants, commercial service establishments, general offices, department stores and shopping centers, theaters and commercial entertainment establishments, and community and public uses. The allowable uses for parcels 24 and 38 include apartment houses, service establishments such as retail and personal services for the day-to-day needs of residents, and community uses and offices and headquarters for non-profit organizations. These uses, as well as the Community-Based Plan, served as input into the development of the Prospectus and Request for Proposals.
1. Prospectus Criteria
The Prospectus included seven key criteria against which the RLA would evaluate the proposals.
2. Selection Process
On March 1, 1999, four development entities submitted proposals for the sites offered for development in the Request for Proposals. (Developers submitted proposals for parcels 15, 26, 27 and 29. No proposals were submitted for parcels 24 or 38.) Interviews with each of the four offerors were scheduled for April 1, 1999, which allowed a month for the Board, its staff, and other relevant District agencies to review the proposals which ranged in length from just under 100 pages to well over 300 pages.
On April 1, 1999, the Board conducted public interviews of the four teams which began at 10 a.m. and lasted until nearly 3 p.m. On April 15, 1999, also at a public meeting, each development team made follow-up presentations and the public was given an opportunity to voice its thoughts on the subject. The meeting began shortly after 10 a.m. and did not conclude until after 5 p.m.
It was the intent of the Board to select a developer(s) at one of its May 1999 meetings. At that time the Board consisted of three members, the minimum necessary for a quorum enabling it to act. In late April 1999, one of the Board members retired and moved from the area, thereby disqualifying herself from continuing as a Board member. The RLA Board, mandated by federal enabling legislation as a five member Board, was now reduced to two sitting members. Those members, cognizant of the significance of this decision to the City and to the Columbia Heights community and after careful consideration of all legal concerns, made a conscious determination to ensure the review and decision-making process was reflective of the newly elected Williams Administration. In response to the request of the sitting Board, Mayor Anthony A. Williams expeditiously appointed three new members. Each of these members was carefully screened by the Office of Boards and Commissions on the basis of proven professional credentials and commitment to work for the good of the District and its communities. Finally, the
Council of the District of Columbia through its confirmation process, carefully interviewed and voted to confirm the Mayoral appointees.
The new Board members joined on June 30, 1999. They were briefed by the sitting Board members and RLA staff. The new members contributed substantial time and resources in reviewing each proposal and reviewed the voluminous transcripts of public testimony presented by developers and community residents at public hearings conducted by the RLA prior to their appointment. Thereafter, an additional public hearing was held so that the new Board members could interview the developers. The full Board then required the developers to answer an additional set of questions.
3. Additional Due Diligence
Because of the importance and sensitivity of this redevelopment decision, the Board took a number of steps beyond its usual procedure to ensure its decision was fully informed.
a. Independent Consultants
The Board engaged an independent consulting firm, RER Economic Consultants, to assist in understanding and evaluating the varied and complicated financing schemes proposed by some of the developers.
b. Site Visits
The Board at its own expense visited several development projects that were built, under construction, and planned to be built by each of the offerors. The Board met with government officials, community organizations, tenants, bankers, and visited each one of the development projects. The intent of these visits was to have a direct appreciation of the quality of the developments and the level of commitment of the developers as it related to financing the projects, community participation, relationships with government agencies, community partners, development schedules and other aspects of the development. The following visits were conducted:
Atlantic Center, developed by Forest City Ratner Companies in Brooklyn, New York Harlem USA, developed by DC-USA (Grid Properties) in Harlem, New York, Jump Street USA, proposed development by DC-USA (Grid Properties) in Philadelphia, Pennsylvania Addison Plaza, developed by Horning Brothers in Seat Pleasant, Maryland Seven Corners, developed by Saul Group in Falls Church, Virginia
Based upon the Board's review of all of the documentation and interactions with the consultants, a series of additional questions were sent to each development team requesting specific information and additional documentation to verify the market demand and support for the project each developer proposed.
c. Pre-selection Community Forum
On August 4, 1999, the Board held a community forum in the affected community to receive additional community input. An estimated 300 - 400 people attended this three hour evening meeting. On August 19, 1999, the Board held a second round of interviews with all of the prospective redevelopers and the developers responded to the follow-up questions submitted to them in July 1999.
d. Meetings with Other Agencies
The RLA Board - understanding the complexity of the development of these sites as well as the need to coordinate and understand its impact on other agency plans - held several meetings and briefings with the following agencies:
D.C. Office of Planning, to review and understand the existing and proposed land uses, marketing and demographic trends, zoning and other planning issues in Columbia Heights, and the relationship the proposed developments would have to development and land uses in other parts of the city;
D.C. Department of Finance and Revenue, to review and understand government financing and the. impact of the proposed level of government financing required by each developer. This included discussions about tax increment financing (TIF), tax-exempt financing, Industrial Revenue Bonds, etc;
D.C. Historic Preservation Office, to review and understand the impact of the proposed developments on Historic Designated properties such as the Tivoli Theater;
D.C. Office of Corporation Counsel, to review and understand legal issues related to the proposed developments, such as condemnation of properties, and potential law suits by third parties;
D.C. Department of Public Works, to review the impact of the proposed developments and issues related to traffic circulation, parking, public infrastructure, and Metro;
D.C. Public Schools, to review the impact of the proposed development on Bell Multicultural High School and also to obtain information about the future plans for Bell and Lincoln Junior High School;
D.C. Metropolitan Police Department, to review the impact of the proposed developments on public safety, to discuss crime in the area and its impact on present and future businesses, and also to obtain information on future steps that the police department would take to ensure safety to businesses and to the community; and
The Deputy Mayor for Planning and Economic Development, to review the Office's - overall economic development policies and their relationship to the proposals for the redevelopment of Columbia Heights.
These meetings were held with the participation of high officials and technical staff of each agency.
4. Selection of the Prospective Developers
Following comprehensive review and analysis of all of the testimony and documentation submitted, and development of an evaluation/ranking system to determine which proposals most closely fulfilled the selection criteria contained in the Request for Proposals, on September 9, 1999, the Board of Directors of the RLA, by unanimous vote, selected DC-USA Operating Co., LLC as developer for Parcel 27 and Tivoli Partners as developer for Parcel 29.
II. Basis for the RLA's Decision
Four offerors submitted proposals for the Columbia Heights Metro Station Area parcels. In alphabetical order, they were:
No offers were submitted for parcels 24 or 38.
A. Summary of Decision
As stated above, there were seven key criteria for evaluating the competing proposals. Based on the following comparison of the proposals against these criteria - most significantly DC-USA and Tivoli Partners' commitments from tenants, strong minority and community-based organization participation, and more realistic development program - the Board of Directors of the RLA, by unanimous vote, selected DC-USA Operating Co., LLC as developer for parcel 27 and Tivoli Partners as developer for parcel 29. The RLA found the proposal for parcel 15 to be unacceptable because of its speculative nature regarding the future market for office space, and it found the proposal for a movie theater development on parcel 26 to be a redundant use given that the winning offer for parcel 27 also included movie theaters. While at the outset there was a range of opinions regarding the merits of the proposals, through a deliberative process and evaluation, the Board arrived at a unanimous decision regarding each of the individual parcels.
While the Board recognizes that the awards do not meet every use called for in the community charrette, the development process embodied in the Exclusive Rights Agreement and Land Disposition Agreement offer further opportunities for further community input to the final design and development of the awarded parcels. The Board in fact directed that the ERAs for parcels 27 and 29 be redrafted to require the developer to respond to each community comment raised during the development process. The RLA also will offer a Request for Expression of Interest for parcels 15, 24, 26 and 38, to obtain direct input and to test the interest of the development community as it relates to the uses and marketability of all sites in the Columbia Heights area. The RLA recognizes that a staged development - one in which parcels 15, 24, 26 and 38 were not awarded for immediate redevelopment - would benefit Columbia Heights by allowing the recommended uses for the additional parcels to reflect changes in market conditions brought about by the development of parcels 27 and 29. The RLA thus hopes to expedite the development of all available parcels in a feasible manner that reflects future market conditions and meets community needs and desires.
B. Point-by-Point Comparison of Proposals Against the Seven Key Criteria
1. Experience of the Development Team
Key finding: The Board determined that each development team had the requisite experience in large developments. Forest City has a longer history of the particular kind of development it offered for Columbia Heights than does DC-USA and Tivoli Partners.
DC-USA principal Grid Properties is based in New York City, as are The Gotham Organization and Joseph L. Searles, III. The team also includes as a local partner the Development Corporation of Columbia Heights (DCCH), a nonprofit community development corporation, which serves as land lessor.
- Grid and Gotham have a long development track record. Similar projects to the one proposed for Columbia Heights were under way and had not been completed at time of offer.
Grid's Harlem-based community partner indicated that the delay for the Harlem project was due to the community organization's inability to assemble the parcel, and that Grid stayed with the partnership throughout the delay.
City and nonprofit officials in Philadelphia indicated that the delay for the Philadelphia project was due to the City's inability to find a suitable relocation site for an existing business in the development area.
- DCCH represents a community-based organization whose participation ensures that part of the economic benefits will be recycled directly into the community.
Forest City is a nationally-established entity headquartered in Cleveland, Ohio with an office in Washington, D.C. Its partners on this proposal include Washington Square Partners, a development firm owned by former principals of the Forest City New York area affiliate, and Millennium Development Company which is owned by a local minority businessman.
- Both Forest City and Washington Square Partners have long term experience in developments similar to that proposed for Columbia Heights. Forest City had numerous discussions with various community members about its proposal.
- Millennium Development Company serves as a community liaison. The joint venture agreement between Forest City and Millennium had expired at the time of the initial offer but was subsequently renewed.
- There is no community-based equity partner on the Forest City team.
Saul Centers, Inc. is a Washington, D.C.-based public company that will be 100% owner/developer for parcel 27. It has developed over 30 shopping centers in the Washington, D.C. metropolitan area. There is no community-based equity partner on the Saul Centers team.
Tivoli Partners principals Homing Brothers, Fort Lincoln New Town Corporation, and Winston Development Inc. are locally-established entities. DCCH also serves as a partner on this team.
- Homing Brothers, the managing general partner, has a long track record of development in the Washington, D.C. area. It has developed 2,400 apartment units, including 510 units of low- and moderate-income housing in seven Urban Renewal parcels. It also developed the Nehemiah Commercial Center. Each Urban Renewal parcel was developed in cooperation with community- based partners.
- Fort Lincoln New Town Corporation and Winston Development Inc. both are minority-owned enterprises. Fort Lincoln is a housing and commercial real estate developer; Winston Development provides development consulting and management.
All developers and team members satisfied reference checks and were deemed eligible to participate in the redevelopment program.
2. Financial ability
Key finding: RLA determined that each developer has sufficient financial resources to complete the project. Both DC-USA and Forest City asked for a high level of public subsidy for their projects, but DC-USA and Tivoli Partners offered a higher percentage of equity in their respective developments than do Forest City or Saul Centers.
DC-USA and Tivoli Partners proposed the most equity for each parcel.
- DC-USA offered to provide a 10% equity stake for the development of parcel 27.
- Forest City offered to provide a 5.5% equity stake for the development of the four parcels, as follows:
Parcel 15 - not specified.
Parcel 26 - 2.3% equity stake; Forest City would advance all minority interests.
Parcel 27 - 7.5% equity stake; Forest City would advance all minority interests.
Parcel 29 - Forest City offered no equity stake.
- Saul Centers did not specify an equity stake for the development of parcel 27.
- Tivoli Partners (Horning Brothers and Fort Lincoln New Town Corporation) offered to provide a 10% equity stake for the development of parcel 29.
DC-USA requested the most subsidy, followed by Forest City.
- DC-USA requested approximately $40 million in tax increment financing (TIF) plus $29 million in tax-exempt bond financing to construct parking on parcel 27.
- Forest City requested approximately $40 million in TIF for development of parcels 26, 27 and 29.
- Saul Centers asked for no public subsidy but assumed that the RLA would convey its portion of parcel 27 to the developer at no cost.
- Tivoli Partners requested $12.6 million in tax- exempt bond financing.
DC-USA also offered the highest potential for property and sales tax revenues for parcel 27 because of its highest proposed density.
3. Development program
Key finding: Tivoli Partners presented the most financially feasible and fully developed development program for parcel 29; DC-USA presented the most family-oriented development program for parcel 27; and both offered sustained financial benefits to the community through the ownership stake of a community-based organization. The Board determined the development program for parcel 15 needed further substantiation.
Parcel 15: The Board's understanding of Federal and City agency plans indicated that Forest City's proposed office development on parcel 15 was too speculative.
- Forest City proposed that a Federal or City agency serve as the chief tenant for the office building; however, the City has no plan to relocate any agencies to Columbia Heights, and thus would not be a tenant as suggested by Forest City, and Columbia Heights is not within the Federal zone for employment. There is no evidence of a market for an office building of the scope proposed for parcel 15.
- Forest City offered to consider developing parcel 15 as housing in oral testimony but did not provide detail, thereby indicating the indefinite nature of its development plan at the time of offer.
Parcel 26: Forest City proposed retail and movie theaters for parcel 26, but expressed that its willingness to develop parcel 26 was contingent upon its receiving parcel 27. Parking for parcel 26 would be at parcel 27. The Board was unable to make an award of parcel 26 because the movie theater proposal was redundant of the winning offer for parcel 27.
Parcel 27: Each proposal offered a mix of retail and services for this site, however, DC-USA was most responsive to the community's stated desire for family-oriented entertainment, and DC-USA moreover offered the most intensive development program and the strongest evidence of commitment from tenants.
- The uses for parcel 27 were similar, but DC-USA offered more family amusements.
DC-USA offers 632,500 sq. ft. of retail, entertainment (movie theaters, an indoor skating rink, and an indoor amusement park) and service space plus 422,500 sq. ft. of below-grade parking. The proposal also included 50,000- 100,000 "unbuilt out space" that could serve community needs.
Forest City included 478,640 sq. ft. of retail space, supermarket, restaurants and below- grade/rooftop parking. The proposal also included an offer to provide space to the Bell Multicultural High School.
Saul Centers 96,240 sq. ft. of retail space and supermarket plus 219 parking spaces at grade however, the community charrette indicated a preference for parking below-grade/behind walls.
- DC-USA included letters of interest from prospective tenants with its proposal and Saul Centers' proposal included an expression of interest from Shoppers Food Warehouse; however, Forest City did not include letters of interest.
Parcel 29: Tivoli Partners offered the most intensive commercial development and has a ready tenant in Giant Food; Forest City offered the most intensive housing development but had no prospective tenants for the retail portion of the development at the time of offer.
- Forest City offered 38,000 sq. ft. of retail and community uses, and 121,000 sq. ft of housing. Parking for parcel 29 would be at parcel 27.
- Tivoli Partners offered 84,500 sq. ft. of retail and 47,096 sq. ft. of housing, plus 90,000 sq. ft. of roof-top parking. Giant Food supermarket would serve as the anchor tenant.
Each proposal addressed major elements of the charrette.
- The charrette indicated a desire for a grocery store, retail, entertainment and services in the overall redevelopment of Columbia Heights, but did not tie any one use to any single parcel.
- The charrette clearly states "The Tivoli Theater should be restored and/or adapted for re-use" but does not unanimously prescribe a specific re-use for the theater.*
*While the charrette sites a vision of Columbia Heights in which a community theater production opens at a renovated Tivoli Theater, the section of the charrette titled 'Community Discussion" reads: "The plan was continually modified as comments and suggestions came in." "Other comments included recommendations that the guidelines should not be conditions of development ... Others suggested quality townhouses for Holmead Place and that the Tivoli Theater should be converted into a grocery store rather than the art space/movie complex shown in the draft plan."
- Both DC-USA and Forest City offered to replicate in their developments forms of community space that were available in the area.
The proposed re-use of the Tivoli as a 1 ,200- seat performing arts theater replicated the services of the Lincoln Theater, one metro stop away from Columbia Heights.
The proposed community space in both proposals replicated another proposed community center under development by the Friends of Meridian Hill on 15th and Euclid Streets N.W.
- As part of its participation in Tivoli Partners' proposal, Giant Food indicated it would proffer the lease on its existing facility to a community organization.
- While not specified as a requirement in the charrette, DCCH's participation in the DC-USA and Tivoli Partners proposal represents another return to the community in the form of sustained community ownership.
Moreover, it should be noted that adherence to the principles and spirit of the charrette was a significant element in the Board's decision, but the Board also had to consider the overall proposed uses and economic viability against market considerations and economic feasibility issues.
All proposals could be begun within a similar timeframe. However, the RLA was concerned not to allow a single developer to own the parcels but leave them undeveloped for long periods of time, as happened when the Haft family controlled the parcels from 1979 to 1996. The RLA felt that award of parcels to separate offerors had the benefits of expediting redevelopment and reducing the risk that each parcel would be developed one at a time (rather than simultaneously by separate developers). Moreover, Forest City's testimony suggested that development of parcel 15 would not proceed until other parcels were completed.
4. Design concept
Key finding: DC-USA, Forest City, and Tivoli Partners all proposed designs that met the vision of Columbia Heights as expressed in the charrette. Saul Centers ' proposal was considered too low-density for the area. An Advisory Architectural Review Panel will review each development phase of the architectural design of the successful offeror(s) and provide further comment.
5. Minority participation in development
Key finding: Among the offerors, only DC-USA and Tivoli Partners met or exceeded the 25% minority participation guideline. Tivoli Partners ' minority participation is all locally-based. DC- USA and Tivoli Partners further included local and nonprofit, community-based equity partners.
The DC-USA team includes 25% minority participation in the form of Joseph Searles, a minority businessman based in New York. Development Corporation of Columbia Heights, which provides local community participation as land lessor, will receive 25% of net cash flow proceeds.
The Forest City team included 20% minority participation at the time of offer, of which 67% was controlled by a New York entity and 33% by a D.C. minority development company (Millenium Development Corporation). An additional 5% was reserved for a community nonprofit organization to be named later.
Saul Centers, Inc. did not specify any minority participation at the time of offer.
Tivoli Partners team includes 40% minority participation, all of which is local: Fort Lincoln New Town Corporation has a 25% limited partner stake, DCCH has a 10% limited partner stake, and Winston Development has a 5% limited partner stake.
6. Equal opportunity for local, small, and disadvantaged business enterprises
Key finding: DC-USA 's estimate of job creation was the highest for parcel 27. All proposals would offer similar opportunities for local, small, and disadvantaged business enterprises with regard to construction and retail tenants which would increase with increased density of development.
Each proposal offers similar opportunities for local, small and disadvantaged business enterprises.
DC-USA offers the highest potential for permanent job creation on parcel 27.
- DC-USA estimated it would create 1,300 permanent jobs on parcel 27.
- Forest City estimated it would create 1,193 permanent jobs for parcels 26, 27 and 29 combined.
- Saul Centers did not provide estimates.
Tivoli Partners estimated it would create 120 permanent jobs on parcel 29.
See also above points regarding minority participation.
7. Special considerations
Key finding: The RLA determined that support for Bell Multicultural High School is not a major factor in the decision because of Bell 's stated consideration of plans for relocation, and that the Tivoli Partners ' proposal for parcel 29 was stronger in terms of marketability and financial viability while respecting the historic preservation of the Tivoli facade on 14th Street and Park Road N. W.
DC-USA and Forest City both offered to provide amenities to Bell Multicultural High School. Saul Centers did not offer amenities in its proposal. The school's principal informed developers that Bell wants to relocate, however; this reduces the extent that the consideration of amenities should affect the selection of the offeror.
Renovations to the exterior of the Tivoli Theater are subject to historic preservation requirements.
Tivoli Partners maintains Tivoli facade except for back wall, and the lobby. Penetration of the back wall will require a waiver of historic preservation requirements.
Forest City maintains the entire Tivoli facade and the lobby, and also offers community groups the opportunity to raise finances for theater restoration. Plans for the configuration of the interior were not specified.
The RLA found the Tivoli Partners' proposed adaptation of the Tivoli Theater to be more well- considered, based on the following considerations:
- Forest City offered to include live performance theater one month after submitting its original proposal to the RLA - its initial offer proposed to use the Tivoli for retail and community space. Forest City was unclear in its testimony regarding its rationale or plan for proceeding with the theater renovation.
- In addition, Forest City's offer is contingent upon the community raising funds to pay for the rehabilitation within one year, at an estimated cost exceeding $6 million. If the community did not provide the funds after one year, Forest City would consider other uses.
- The proposal to restore the Tivoli as performing arts space was vague from a financial and marketing standpoint and, as a consequence, the RLA felt that public investment in the Tivoli Theater renovation as performing arts space would be an irresponsible use of public funds.
- The offer did not include a proposal or contingency program for providing renovation and operating funds if the community should fail to raise the funds needed.
- Forest City identified potential users but did not identify a theater management company to take responsibility for ongoing operations and maintenance.
- Theater use would not create sufficient revenues to repay TIF, especially without other commercial/retail uses on site.
- The City currently owns the 1,200-seat Lincoln Theater on U Street N.W. (one metro stop from Columbia Heights), which at the time of the decision was not booked to full capacity annually. The market for live theater at Tivoli is unproven, thus creating a risk to the City which owns the currently-vacant Howard Theater in addition to the Lincoln Theater.
Forest City's original proposed use of Tivoli space for community organizations and as a technology center did not include a plan for creating such a center.
- The funding and management plan for the "M2T2" technology center was unclear, with no evidence of commitments.
- As with the theater, the center would not create revenues to repay development cost.
- There are scattered computer centers in the Columbia Heights community, although none as concentrated as that proposed for the Tivoli in the Forest City proposal.
Consideration of these factors led the RLA to award parcel 29 to Tivoli Partners. Following that decision, and also in consideration of its higher density and stronger family orientation, the RLA awarded parcel 27 to DC-USA.