HPA No. 1986-729 (In re. the Woodward Building)

HPA Number: 1986-729
Building Name: Woodward Building
Location of Property: 1426 H Street, N.W.
Date of Decision: 02/19/88
Type of Case/Type of Permit Sought: Demolition
Disposition: Approved
Date of Case Summary: 07/06/07

Summary of Decision:

15th & H Street Associates Limited Partnership (a/k/a S.J.G. Properties, Inc.) (the “Applicant”) filed for a permit to demolish the eleven-story Woodward Building, a contributing structure to the Fifteenth Street Financial Historic District, a locally designated district in Washington, D.C. In its place, the Applicant proposed to construct a first-class office building of “essentially the same height and form” (according to D.C. Office of Planning testimony), which would comply with current Building Code requirements (to include handicap access, a loading dock and compliant fire stairs), and provide certain amenities. In analyzing the value of the existing building against the merit of the proposed project, the Mayor’s Agent determined that the building’s significance stemmed not from exceptional architecture (a classical revival style that also attempted to incorporate “natural” elements of terra cotta and brown brick) or a connection to historic events, but from its “illustration of the economic trends of the city.” The Mayor’s Agent further determined that the problems inherent in rehabilitating the Woodward Building created little economic incentive for a developer to build structures other than Class A office buildings. He also concluded that the Applicant’s inclusion of two floors of residential space, some street level retail space, and a day care facility in the new building was enough to qualify the project as one of special merit based on its specific features of land planning. Thus, the Mayor’s Agent granted the demolition permit.

Mayor’s Agent – Procedural:

A procedural question was raised as to whether the Mayor’s Agent has authority to review plans for new construction in a demolition application involving a project of special merit where the plans have been referred to the Historic Preservation Review Board (“HPRB”) but where HPRB has made no specific recommendation on the plans to the Mayor’s Agent.

The Mayor’s Agent found that when determining whether a project is one of special merit, “the Mayor’s Agent is required by D.C. Law 2-144 to consider the architecture, land planning features and other significant aspects of the project...” and that such determination “can only be accomplished through a review of the architectural plans and features of the new construction.” The required review, however, need not be undertaken by the Mayor’s Agent, and in this case, the Mayor’s Agent relied upon the prior review of the U.S. Commission of Fine Arts (“CFA”), acting pursuant to the Shipstead-Luce Act (40 U.S.C. 121), which also had jurisdiction over the Woodward Building.

The HPRB recommended against granting the permit. The CFA granted preliminary approval of the new construction. Several Advisory Neighborhood Commissions (the “ANCs”), as well as the Committee of 100, filed as parties in opposition. The concerns raised by the ANCs were “considered carefully and given great weight.”

The Mayor’s Agent excluded from consideration a letter submitted for the record because the letter “included post-hearing evidence not specifically requested by the Mayor’s Agent.”

The Applicant has the burden of proof of establishing that the demolition of a building is necessary to construct a project of special merit.

Economic Feasibility:

The Mayor’s Agent credited the testimony of Shalom Baranes, architect for the Applicant, who testified that renovation of the existing Woodward Building was economically unfeasible because such renovation would produce at best only a “Class ‘B’ office building.” Characterizing the issue as “not whether a renovation can be done, but whether a Class ‘B’ building can command the level of rents necessary to justify the extraordinary expense of renovation,” the Mayor’s Agent identified many “significant problems” affecting the feasibility of renovation, including: complying with handicap access requirements; replacing the elevator system and elevator shaft in the core of the building; replacing the building’s stairways; fitting modern heating and air conditioning systems in the building’s low ceilings; relocating an underground electric transformer; and replacing the terra cotta on the exterior of the building, which was “in a state of deterioration.”

The Mayor’s Agent considered expert testimony on the level of rents a renovated building could command. A renovated building was estimated to be able to command rents of $22 to $23 per square foot, which is “at the low end of the range for ‘asking’ lease rates for downtown new office space.” This left the owner of the building with “little economic incentive” to engage in renovation of the building, and the Applicant testified that he had “no incentive...to borrow $30 million at 9 ¾ percent interest to finance a renovation on a building which when renovated would result in a Class ‘B’ office building producing 7.32 percent cash-on-cash return on equity.”

Project of Special Merit – Specific Features of Land Planning:

The Mayor’s Agent determined that the proposal was a project of special merit having significant benefits by virtue of its specific features of land planning. In particular, the proposal supported the “clearly enunciated goal of developing a residential community in the downtown area” set forth in the District’s Comprehensive Plan, because the new building would include approximately thirty thousand (30,000) square feet of residential space. The Mayor’s Agent weighed the “city’s high priority for establishing a ‘critical mass’ of housing in the Downtown area” and determined that the downtown housing supply will not increase “if we rely upon market forces alone.” Moreover, the combination of residential space, a pedestrian plaza and street level retail space demonstrated “mixed land use” consistent with the goal of creating a “Living Downtown.”

In addition, the proposed building included space for day care services for at least fifty-seven (57) children that would address a critical need for day care providers in close proximity to work places that “enhanced the special merit of the project.”

Furthermore, the project included at least two hundred sixteen (216) parking spaces, and the Mayor’s Agent found such parking to promote “the District’s policy for a balanced parking supply.” The Mayor’s Agent found the proper guideline for consideration of what constitutes “balanced parking supply” to be the District’s zoning regulations for parking requirements; it was not expressly mentioned whether the proposed parking spaces would exceed what was required by the zoning regulations.

Project of Special Merit – Exemplary Architecture:

The D.C. Office of Planning had concluded that the design of the new building “does meet the test of exemplary architecture in terms of how it relates to and enhances the character of the Fifteenth Street Financial Historic District.” However, the Mayor’s Agent found that “the design of the proposed building fails to reach a level that can comfortably be described as ‘exemplary architecture.’” The Mayor’s Agent was persuaded by the reservations expressed by certain CFA members regarding the proportions of the proposed building; concerns centered around the top of the building being “much too heavy.”

Compatibility:

Although the Mayor’s Agent did not find the architecture of the proposed to building to be “exemplary,” she did find it to be “compatible” with the character of the historic district. The new building would: (i) have retained the Woodward Building’s tall entrance columns, (ii) be of the same height and form as the Woodward, (iii) use better-quality materials than the original building, and (iv) incorporate a “three-part ‘base, shaft and crown’” configuration recommended by the urban design standards for Downtown.

Subsequent History:

The decision of the Mayor’s Agent was appealed to the D.C. Court of Appeals (See Committee of 100 on the Federal City v. DCRA, 571 A.2d 195 (D.C. 1990)). The Court questioned the decision and remanded the case on a number of grounds, holding that the Mayor’s Agent’s findings of fact were not supported by substantial evidence in the record because the Mayor’s Agent had failed to consider material issues relating to the proposed amenities, including whether the proposed day care and residential facilities could be provided in a renovated Woodward Building; also that the Mayor’s Agent had incorrectly applied the law because “the balancing of the historic value of the Woodward Building against the special merits of the project could not proceed until the Mayor’s Agent found that the amenities proposed by S.J.G. were sufficient to constitute a project of special merit.” In making the special merit determination, the feasibility of the amenities was a legitimate determination.

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