COUNCIL OF THE DISTRICT OF COLUMBIA COMMITTEE OF THE WHOLE COMMITTEE REPORT 1350 Pennsylvania Avenue, NW, Washington, DC 20004 DRAFT TO: All Councilmembers FROM: Chairman Phil Mendelson Committee of the Whole DATE: November 3, 2015 SUBJECT: Report on PR 21-307, “McMillan Townhomes Parcel, Commercial Parcel, and Multifamily Parcels Disposition Extension Approval Resolution of 2015” The Committee of the Whole, to which PR 21-307, the “McMillan Townhomes Parcel, Commercial Parcel, and Multifamily Parcels Disposition Extension Approval Resolution of 2015” was referred, reports favorably thereon and recommends approval by the Council. CONTENTS I. Background And Need ...............................................................1 II. Legislative Chronology ..............................................................2 III. Position Of The Executive .........................................................3 IV. Comments Of Advisory Neighborhood Commissions ..............3 V. Summary Of Testimony .............................................................3 VI. Impact On Existing Law ............................................................9 VII. Fiscal Impact ..............................................................................9 VIII. Section-By-Section Analysis .....................................................9 IX. Committee Action ......................................................................9 X. Attachments ...............................................................................9 I. BACKGROUND AND NEED On September 16, 2015, PR 21-307, the “McMillan Townhomes Parcel, Commercial Parcel, and Multifamily Parcels Disposition Extension Approval Resolution of 2015” was introduced by Chairman Mendelson at the request of the Mayor. PR 21-307 would extend the time the Mayor has to dispose of the McMillan property. The Development Project The McMillan Reservoir Slow Sand Filtration Site (“McMillan Site”) was conveyed to the District by the federal government in 1987. Prior to that, the site had been operational as a slow- sand water filtration system for 70 years. The property features two paved service courts that divide the site into three large, grassy open spaces. These open spaces are the roofs of 20 unreinforced concrete filter beds that were covered by a layer of fill. In 2014, the Council approved three resolutions authorizing the Mayor to dispose of the property to Vision McMillan Partners Committee of the Whole Nov. 3, 2015 Report on PR 21-307 Page 2 of 10 (“VMP”) to redevelop the property into a combination of healthcare facilities, apartment buildings, townhouses, a recreational center, and open green space.1 VMP is a partnership between three development companies: Trammel Crow Company, EYA, and Jair Lynch Development Partners. Trammel Crow will construct over one million square feet of healthcare facilities; EYA will construct 146 townhouses; Jair Lynch will construct 531 apartment units in two buildings; and the District will be responsible for infrastructure, eight acres of park space, a 17,000 square foot recreational facility, and the preservation of a portion of the McMillan Site’s historical features. The Project Timeline The Office of the Deputy Mayor for Planning and Economic Development (“DMPED”) and VMP have established a development construction timeline that exceeds the Mayor’s current disposition authority (expiring December 2, 2016) by five years. IDMPED and VMP have successfully completed the entitlements process and in 2016 will seek a subdivision of the site into multiple parcels and apply for construction permits. The schedule will continue afterward as follows:2 Q3 2016: Commence Site Work (selective demolition, site work, infrastructure) Q1 2018: Sale of Phase 1 finished pads Q3 2018: First model townhome complete and townhome sales commence Q4 2019: Completion of Phase 1 multi-family building Q4 2020: Full lease up of Phase 1 multifamily building (15 units per month) Q1 2021: Sale of Phase 2 multifamily and healthcare finished pads Q2 2021: 45% Contracts on Phase 1 townhomes (1 townhouse contract per month) Q3 2021: Sale of Phase 2 townhouse finished pads According to the summary term sheets for the project, the outside date for the Phase 2 closings is up to four years after the Phase 1 closings, or the expiration of the extension resolution, whichever is sooner. The development team and DMPED have testified that they are comfortable with the extension resolution expiring in December 2021. Therefore, the Committee recommends approval of PR 21-307. II. LEGISLATIVE CHRONOLOGY Sept. 16, 2015 PR 21-307, the “McMillan Townhomes Parcel, Commercial Parcel, and Multifamily Parcels Disposition Extension Approval Resolution of 2015” is introduced by Chairman Mendelson at the request of the Mayor. Sept. 22, 2015 PR 21-307 is “read” at a legislative meeting; on this date the referral of the bill to the Committee of the Whole is official. 1 See The McMillan Residential Townhomes Parcel Disposition Approval Resolution of 2014 (Res. 20-0705; 62 DCR 1091), the McMillan Residential Multifamily Parcels Disposition Approval Resolution of 2009 (Res. 20-0706; 62 DCR 1094), and the McMillan Commercial Parcel Disposition Approval Resolution of 2014 (Res. 20-0707; 62 DCR 1097). 2 Timeline provided in the testimony of Gilles Stucker, Senior Project Manager at DMPED, at the public hearing before the Committee of the Whole on PR 21-307 on October 26, 2015. Committee of the Whole Nov. 3, 2015 Report on PR 21-307 Page 3 of 10 Sept. 25, 2015 Notice of Intent to Act on PR 21-307 is published in the District of Columbia Register. Oct. 2, 2015 Notice of a Public Hearing on PR 21-307 is published in the District of Columbia Register. Oct. 26, 2015 The Committee of the Whole holds a public hearing on PR 21-307. Nov. 3, 2015 The Committee of the Whole marks-up PR 21-307. III. POSITION OF THE EXECUTIVE Gilles Stucker, Senior Project Manager for the Office of the Deputy Mayor for Planning and Economic Development, testified at the Committee’s public hearing on October 26, 2015. Mr. Gilles began his testimony by outlining the aspects of the development plan and the expected revenue. Next, he provided a timeline for the schedule of construction, which is expected to go into 2021. IV. COMMENTS OF ADVISORY NEIGHBORHOOD COMMISSIONS The Committee did not receive any formal resolutions from any ANC, however two Commissioners representing ANC1A10 and ANC5E09 testified at the public hearing on PR 21- 307 in favor of the legislation and the underlying development project. V. SUMMARY OF TESTIMONY The Committee of the Whole held a public hearing on PR 21-307 on Monday, October 26, 2015. The testimony summarized below is from that hearing. Copies of written testimony are attached to this report. Adam Weers, VMP/Trammel Crow Companies, testified on behalf of the developer for the healthcare and retail components of the project. He stated that Parcel 1 of the project will be dedicated to healthcare office and research facilities which will require 27 months of construction. He also described the company’s initiative known as Opportunity|McMillan, in partnership with the Community Foundation, which includes a $1 million investment in scholarships and workforce development in preparation for 6,000 jobs to be created from this project. Brian Allan Jackson, VMP, EYA Development, testified on behalf of EYA Development, a partner of Vision McMillan Partners. He stated that if the extension is approved, the company will work with DMPED to submit site development permits at the beginning of 2016 and begin land development in the summer of 2016. Committee of the Whole Nov. 3, 2015 Report on PR 21-307 Page 4 of 10 Jair Lynch, VMP/Jair Lynch Development Partners, testified in favor of the legislation as one of the partner developers comprising Vision McMillan Partners. Jair Lynch Development Partners is responsible for the construction of Parcel 4, which will contain 196 market rate rental apartments, 85 affordable senior apartments, and 53,000 square feet of grocery store retail space, and Parcel 2, which will contain 236 rental apartments (including 25 affordable units). Parcel 4 and Parcel 2 will be constructed in two phases. Philip J. Blair, Jr., Public Witness, testified in opposition to the McMillan extension. He expressed concerns related to a recent letter from the D.C. Auditor regarding a lack of competitive bidding in the city’s selection of VMP as master developer. He also called on Councilmember Nadeau to recuse herself from voting on McMillan related legislation due to an allegation that her chief of staff worked for VMP while managing Ms. Nadeau’s campaign. Mary Pat Rowan, Public Witness, testified in opposition to the McMillan development project extension. She cited a lack of park space in Ward 5, as well as concern that many religious institutions in the area are slowly selling off their land to private developers. Andrea Rosen, Public Witness, testified in opposition to the McMillan development project. She does not believe that agencies including DMPED have ensured a competitive bidding process in for the McMillan project, and that VMP was unfairly granted additional time and city funds. In her written submission, she attached a copy of a letter from Kathleen Patterson, District of Columbia Auditor, to Chairman Phil Mendelson in which Ms. Patterson expressed concern that after the District took full responsibility of the project, VMP was given “exclusive rights” to negotiate on cost and other factors. Quoting