Union Market Expansion Plans Change After Development Partner Drops Out

• August 29th 2018

by Nena Perry-Brown

Last spring, EDENS-affiliate EAJ 1309 5th Street, LLC applied for a two-year extension for plans that would expand and construct a companion building to Union Market. Now, with the exit of development partner Great Gulf, plans may be changing significantly.

Since applying for a time extension, EDENS also filed for a separate modification of consequence to replace the proposed theater use with loft office space above the Union Market ("South") building at 1309 5th Street NE (map), while also applying for a second-stage PUD for the 240-apartment "North" building. At the time, the applicant requested that the Zoning Commission consider the time extension concurrently with the additional modifications.

Now, they are asking for a time extension to be considered as soon as possible.

Part of the impetus for these changes is the recent, well-documented pattern of delayed and overturned projects in DC, which the applicant asserts influenced Great Gulf's decision to let a contract for both buildings expire. 

"After being under contract for a year, the Applicant's development partner on the Project allowed its contract with the Applicant to terminate because of such partner's concerns regarding the current PUD appeals climate in DC," the application states. "More specifically, the development partner is also the development partner with an affiliate of the Applicant on a nearby PUD, which was appealed at the same time as the contract for the [sic] property terminated."

"The Applicant believes that it has determined a path that would allow for the construction of the originally approved South Building without the modifications and specific design requested in the Modification and Second-Stage Application, but such path nonetheless requires a commitment from a theater operator and an office tenant," the application continues. "As noted above, for the past couple of years, the PUD appeals climate has had a chilling effect on the extent to which development partners, and funding sources, are willing to engage on the Project."

EDENS has met with four theater operators, including former lessee the Angelika Film Center, all of which have expressed interest in having a 42,000 square-foot theater above Union Market with four or five screens and event space. Consequently, the developer will proceed with the originally consolidated PUD, pending approval of the time extension, and will withdraw the applications for modification of the overall consolidated PUD and second-stage PUD for the North building. The plans approved in 2015 allowed for the uppermost four floors of the eight-floor addition to be office space or residential use while adding 1,600 square feet of retail.

Other factors like high construction costs and complex logistics involved with adding stories to the existing building and the timeline of development on the adjacent Gallaudet University-owned parcels (one of which the applicant leases for surface parking) will also influence the timeline of development and the future plans for the second phase. 

The original order was set to expire May 8, 2017 if building permits were not filed. The developer will also submit a new second-stage PUD for the North building in the near future. A zoning hearing has not yet been scheduled.

This article originally published at https://dc.urbanturf.com/articles/blog/great-gulf-pulls-out-of-union-market-redevelopment-pud/14376.