The University collaborates with the District of Columbia and significant financial and development partners to invest $33 million of tax-exempt capital in the initiative
WASHINGTON, D.C. (January 9, 2019) – Howard University announced today that it has completed plans to renovate and modernize an existing campus asset known as Howard Center, located at 2225 Georgia Avenue, NW.
The agreement calls for the University to lease the 3rd through 9th floors of the Howard Center, a former hotel/restaurant venue most recently used as Howard University Administrative Offices with ground floor retail, to Provident Group – Howard Center, Inc., a 501(c)(3) entity for a term of 41 years. The space will be renovated into 176 below-market rate micro, one-bedroom, and two-bedroom apartments with amenity space. The primary residents will be students, faculty, staff, and associates. Howard will retain ownership and control of the asset, and receive an up-front payment to reinvest in the University’s mission. In addition, Howard will participate in the performance of the asset by receiving annual lease payments and residual cash flows from the transaction.
This initiative continues the strategy championed by President Wayne A. I. Frederick to innovate the campus while improving the Georgia Avenue Corridor. For the first time, the project will make available a new housing offering that targets primarily professional and graduate students who make up a significant portion of the campus population. Currently, there are limited affordable housing options within close proximity to the central campus.
“I am committed to improving our student experience at every level. While we have renovated much of our housing stock over the past couple of years, the Howard Center project provides an improved foundation for our core graduate and professional programs which are key components of my growth strategy. Also, included in the program are community spaces where residents can engage with faculty and alumni, which further deepens the linkage between generational University stakeholders” says President Wayne A. I. Frederick. “This project is a unique opportunity for Howard University to drive the re-imagination of the Georgia Avenue Corridor. It is a small, but significant initial step in furthering the DUKE Plan which envisions the immediate environment as part of the ‘Howard Town Center Area.’ This and our previously announced Bond Bread Factory and WRECO Garage redevelopment initiative will further enhance the local community experience while encouraging economic growth, job creation, and development.”
Howard Center is a nine-story concrete structure totaling 90,157 gross square feet. Its central location near downtown is served by public transportation and is uniquely situated along the lower 7thStreet/Georgia Avenue Corridor (US-29) at the intersection of several vibrant and rapidly redeveloping neighborhoods, including Pleasant Plains, Shaw, and the historic U Street Corridor. This neighborhood has experienced significant growth over the past 10 years, which has made it increasingly difficult for price-sensitive students, faculty/staff, and long term residents to reside close to the University. The Howard Center program aims to adaptively re-use a deteriorating building in a fashion which expands access to housing, while fulfilling the urban planning principles and vision established by the District of Columbia.
Having been in the works for nearly 12 months, the project team worked extensively with the community, the District of Columbia’s Industrial Revenue Bond Program leadership, and a large team of municipal finance and real estate experts. The program brings private capital to support the University’s mission in a way that ensures that the project is adequately capitalized for development activities as well as ongoing operations.
“We were excited to learn of Dr. Frederick’s vision for the University” says Ramiro Albarran, Head of Originations at Preston Hollow Capital, LLC. “Preston Hollow Capital brings creative solutions with its investments nationally. We were proud to include Howard University in the $1+ billion of investments that we made in 2018. Howard University is an iconic national institution and we are thrilled to bring our expertise in structuring and capital allocation to support this project, the associated innovative program as well as the mission overall.”
The Howard Center program brings a new and enticing residential environment to the University community. Accordingly, the project prioritizes residents in the following order: (1) Graduate and Professional Howard University Students; (2) Other Eligible Howard Students; (3) Howard Faculty and Staff; and (4) Howard Associates. The proposed redevelopment program for the Howard Center is primarily a dormitory use intended to serve the housing needs of the expanded University community, while maintaining continuity of operations for the University-serving ground floor retail components.
The redevelopment program consists of the following elements:
(a) Residential: Levels 3 through 9 are designated to receive a total of 176 residential units with a mix of unit types that includes micro units, one-bedroom, and two-bedroom suites ranging in size from 300 to 775 square feet. Each unit will be outfitted with an individual bathroom and kitchenette, and will be fully furnished to include a bed, dresser, table, chair, and closet or armoire.
(b) Amenities: Levels 3 and 4 will be outfitted with building amenity spaces for residents to include a fitness center, social lounges, a gaming room, and a laundry facility.
(c) Retail: The existing retail tenants (Starbucks, Barnes & Noble) that are located on levels 1 and 2 will remain in place to serve the greater university community.
“This project continues our aggressive approach of providing creative solutions to University Development projects,” says Howard Real Estate Executive Anthony Freeman. “Implementation of the lease required specialized structuring to provide appropriate delineation of the dormitory/residential and retail components. Additionally, we were able to build an expert development team, fully capitalize the project and provide reinvestment capital while minimizing risk to the University by financing the project with off-balance sheet tax exempt bonds.”
The Howard Center team includes industry leaders in Higher Education and municipal finance including: The District of Columbia, Bank of America/Merrill Lynch, Preston Hollow Capital, Provident Resources Group, Corvias Campus Living, and Alvarez & Marsal.
The building is currently vacant except for the ground floor retail. The transaction was completed on November 28, 2018. Construction has commenced with an anticipated completion in the Summer of 2019.