MOUNT PLEASANT RETAIL DEVELOPMENT STUDY, DISTRICT OF COLUMBIA DHCD

DEVELOPMENT STUDY (DEVELOPMENT ANALYSIS)

The Mount Pleasant Main Street area of Washington DC is a seven-block retail district in the heart of Northwest Washington DC. Mt. Pleasant Street has always been a local retail street but has had some difficulty attracting all of its residents – all ethnicities and income groups – to its retail strip. Many of the businesses were developed to serve one component of the community. As the neighborhood has become more diverse overall, the businesses have not changed in a significant way. Urban Focus® was part of a consultant team for the Mt. Pleasant neighborhood Retail Market Study in Washington DC. 

 Urban Focus® evaluated both sites, considering both for sale and rental housing over retail. The retail was considered below market and potentially would remain as community center space for a short time. It was also determined that based on the current marketplace the redevelopment of the sites at present for rental housing, was not supported. One Site A, there is a gap of $2.4 million and the equity investment return did not meet the hurdle rate. On Site B, there is a gap of $1.9 million and again the project yield and equity return did not meet the hurdle rate for the project. These projects would require additional height or subsidy to proceed. It was determined that additional height is not appropriate at these locations above 65 feet. Potential subsidies were analyzed, including New Markets Tax Credits and Low Income Housing Tax Credits, to determine how the funding gap could be filled and to make recommendations to the DC Department of Housing and Community Development on how to proceed. It was recommended that the projects wait until the housing market demand in this area return.