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D.C. government strikes $48M, 15-year Anacostia lease deal

Wednesday - 7/10/2013, 3:07pm  ET

The District has struck a 15-year, $48 million deal to move three government agencies into the former D.C. police evidence warehouse, soon to be redeveloped as an 82,000-square-foot office building.

The D.C. Taxicab Commission, the D.C. Lottery and the D.C. Department of Transportation's Business Opportunity and Workforce Development Center — all currently located in various, privately owned Anacostia buildings — will move to the renovated 2235 Shannon Place SE once its rehabilitation is complete in roughly 12 months.

The building is owned by Camp Springs-based Curtis Investment Group. The redevelopment will be managed by D.C.-based Four Points.

The 15-year lease, currently before the D.C. Council for a 10-day review, will cost the District $3.2 million per year, or roughly $40 per square foot. There are two, five-year renewal options, and no option to buy. The District will occupy 80,549 square feet, virtually the entire building, minus a small planned cafe.

Demolition is likely to begin next week, said Stan Voudrie, a Four Points principal. The work will include reframing the building in glass and steel, gutting the interior and adding multiple floors.

The Taxicab Commission currently operates out of 10,866 square feet at 2041 Martin Luther King Jr. Ave. SE, which is owned by Curtis. But the commission, per documents submitted to the council, needs double that space to accommodate additional taxicab staff for "greater enforcement, a larger hearing room, and space to accommodate taxi cab drivers."

The D.C. Lottery runs out of 74,260 square feet at 2101 MLK Ave., another Curtis property. The lottery's space will shrink by more than 30,000 square feet at 2235 Shannon, but its new space will be more efficient, and it will include a claim center.

The DDOT center operates out of 2311 MLK, a small rowhouse (not owned by Curtis).

All three existing leased offices, the District reports, are deficient in condition, size and/or layout. The newly constructed space will have a more efficient design and will bring online "greatly needed office space East of the Anacostia River."

Plans to renovate 2235 Shannon go back years. The Washington Post reported in 2011 that the owner would market the renovated building to government contractors eying a presence near the St. Elizabeths west campus, home to the new U.S. Coast Guard headquarters.

While 2235 Shannon won't be available to contractors, the District's exit from two Anacostia office buildings, both owned by Curtis, will free up space immediately available for lease, Voudrie said.

© 2013 American City Business Journals, Inc.