Mayor Anthony A. Williams Announces Public/Private Partnership with Kaempfer Company and Forest City Enterprises to Redevelop Waterside Mall in Southwest Waterfront Area.

Business Editors

WASHINGTON--(BUSINESS WIRE)--Oct. 31, 2001

In the second major announcement within a week related to making the District's Anacostia Waterfront Initiative (AWI) a reality, Mayor Anthony A. Williams, Congresswoman Eleanor Holmes Norton and members of the D.C. Council, in conjunction with the Kaempfer Company and Forest City Enterprises (NYSE:FCEA)(NYSE:FCEB) announced a public/private partnership to redevelop the Waterside Mall.

"This is another major boost for the revitalization of our waterfront. The re-introduction of 4th Street SW and the planned redevelopment of the mall will make this a major mixed-use destination, said Mayor Anthony Williams. "We are proud to be working with Kaempfer Company, Forest City Enterprises and the Southwest community to make this happen. It proves that this administration turns plans into results."

The announcement comes less than a week after District officials announced a US Housing and Urban Development HOPE VI grant to redevelop Arthur Capper Homes and Carollsburg Gardens, public housing developments that are also in the waterfront area.

Through negotiation of a Memorandum of Understanding (MOU) and other related documents between the District's Office of the Deputy Mayor for Planning and Economic Development, the Office of Planning and a joint venture including the Kaempfer Company and Forest City Enterprises, two of the area's respected commercial developers, the property will be redeveloped and significantly re-tenanted over the next five years. The agreement also makes possible realization of the SW Community's long held desire to see 4th Street SW re-opened, making the mall a pedestrian-friendly place.

"The redevelopment of Waterside Mall by this caliber of development team sends an important signal to the business community that the market believes that the waterfront is a growth area," said Deputy Mayor for Planning and Economic Development Eric Price. "I believe that this project will spur further development by creating a new direct connection between the waterfront and the District's downtown and the National Mall."

"This project will have a positive regional impact by connecting a Downtown DC's proven employment and tourism center to an area with great potential as a second, in-District regional employment and tourism center," said Andy Altman, Director of the DC Office of Planning. "The waterfront and the central business district are now connected in very few places, and the new 4th street will provide a key link between these areas. With this 4th Street connection restored, the natural pedestrian and vehicular linkage between these two economic generators for the District will be back in place."

The Waterside Mall project is a 30-year old, 1.1 million square foot urban renewal era area office building in the Southwest Waterfront Urban Renewal Area of the District. It is arranged in two major components with a large, three story platform including the SW Waterfront's major retail anchors, Safeway and CVS, and upper floor office space, some of which is located in two 130-foot towers on the both ends of the site.

In 1996, the Southwest community funded an Urban Land Institute (ULI) study of the Southwest Waterfront in search of ways to revitalize the area. Among its chief recommendations was re-extension of the street connection between 4th Street downtown and 4th street in SW, which is currently blocked by a small National Park Service "pocket park" and the Waterside Mall.

In July of last year, the District was approached by the Kaempfer Company and Forest City Enterprises about the property. The developers proposed a joint venture to redevelop and reposition the Waterside Mall in the office market. The project's major long-term lease with US GSA expires in September of 2002. Both developers had a long and significant track record of major mixed-use and commercial redevelopment work in D.C. and in other major cities around the country.

Because the property was ground leased to the developers through the DC Redevelopment Land Agency, the Joint Venture sought the assistance of the District in amending certain elements of the ground lease and locating new US GSA and private tenants. In exchange for District assistance in both these matters, the development team agreed to allow the street to travel through their site and make a contribution to the street construction costs on their site that will represent a significant percentage of the total cost of the road improvement.

As the Anacostia Waterfront Initiative work continues, this agreement sets the stage for further development in the Waterfront area.