ARLINGTON COUNTY, VIRGINIA. County Board Agenda Item Meeting of September 24, 2016

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1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of September 24, 2016 DATE: September 16, 2016 SUBJECT: Deed of Easement from PQ Apartments, LLC, Grantor, to the County Board of Arlington County, Virginia, as Grantee, Consenting to and Subordinating the lien of a County Loan to a Public Use and Access Easement located on property that is part of Site Plan #425 (Pierce Queen), 1515 N. Queen Street, RPC# C. M. RECOMMENDATIONS: 1. Approve the attached Deed of Easement for a Public Use and Access Easement ( Deed of Easement ) on the Property located at 1515 N. Queen Street, RPC# ( Property ) for which the County is a lien holder under a Deed of Trust, Assignment or Rents and Leases and Security Agreement, dated October 23, 2014 ( Deed of Trust ) subject to approval as to form by the County Attorney. 2. Authorize Julie Massie and Susan Stout, Trustees, either of whom may act, to consent to and execute the Deed of Easement subordinating the lien of a County loan on the Property, subject to approval as to form by the County Attorney. ISSUES: This is a request for authorization for the County Trustees to consent to and subordinate the lien of the Deed of Trust that secures an Affordable Housing Investment Fund ( AHIF ) loan made by the County on the Property to an easement for public use and access. There are no outstanding issues. SUMMARY: In order to comply with the site plan conditions for Site Plan #425 ( Site Plan ), approved by the County Board on March 11, 2013, PQ Apartments, LLC ( PQ Apartments ), as owner/developer of the Property, must convey a Public Use and Access Easement to the County on the Property. All lien holders and trustees under deeds of trust on the Property must consent to the Deed of Easement and agree to subordinate their interests to the Deed of Easement prior to its recordation in the Arlington County Circuit Court land records ( Land Records ). The County is a lien holder on the Property under the Deed of Trust securing an AHIF loan. County Manager: ##### County Attorney: ***** 22. Staff: Linda Eichelbaum Collier, DES, REB

2 BACKGROUND: The subject parcel is located on the block surrounded by N. Pierce Street, N. Queen Street, 16 th Street North and Fairfax Drive and is part of the Site Plan approved by the County Board on March 11, The Site Plan is for an apartment building containing approximately 193 dwelling units, which include on-site affordable dwelling units. PQ Apartments is the owner of the Property by virtue of a deed recorded among the Land Records in Deed Book 4801 at Page 499. PQ Apartments, as Grantor, entered into a Purchase Money Deed of Trust, Assignment of Rents and Leases and Security Agreement ( Deed of Trust ) in favor of Julie Massie and Susan Stout, Trustees, either of whom may act for both, and The County Board of Arlington County, Virginia, as Beneficiary, securing a $6,800, Affordable Housing Investment Fund ( AHIF ) Loan that the County made for development of the Property. The Deed of Trust was recorded on October 31, 2014 among the Land Records in Deed Book 4801 at Page 557. DISCUSSION: In order to comply with the Site Plan conditions, specifically Condition #71, the PQ Apartments must convey and record in the Land Records the proposed Deed of Easement. A copy of the Deed of Easement is attached hereto as Exhibit A. The Deed of Trust securing Arlington County appointed Julie Massie and Susan Stout, either of whom may act for the other, as Trustees. The County Board is being requested to authorize the Trustee(s) to consent to and to subordinate the lien of the AHIF Deed of Trust to the Deed of Easement being conveyed to the County and to release the lien of the AHIF Deed of Trust on the portion of the Property being granted and conveyed to the County. The AHIF Deed of Trust must be subordinated to the Deed of Easement so that the County s interest in the Deed of Easement is not affected in the event of a default under the AHIF Deed of Trust. The existence of the easement that is the subject of the Deed of Easement will not materially reduce the value of the secured property under the AHIF Deed of Trust. FISCAL IMPACT: None

3 Document prepared by and when recorded return to: Bean, Kinney & Korman, P.C Wilson Boulevard, 7 th Floor Arlington, Virginia Attn: Lauren Keenan Rote, Esq. VA Bar No RPC Nos DEED OF EASEMENT THIS DEED OF EASEMENT (this Deed ) is made this day of, 2016, by and between PQ APARTMENTS, LLC, a Virginia limited liability company, whose address is c/o Bozzuto Development Services, LLC 6406 Ivy Lane, Suite 700, Greenbelt, Maryland 20770, (the Owner ), Grantor; AMY B. CONNELLY, ESQ., and JAIME MONTOYA, ESQ., as Trustees for the benefit of CAPITAL ONE, NATIONAL ASSOCIATION, a National banking association, each of whom may act for both, whose address is c/o Krooth & Altman LLP, 1850 M. Street, N.W., Suite 400, Washington, D.C , (each a Capital One Trustee ) Grantor for indexing purposes only; CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association, having an office at Capital One, National Association, Community Finance, 299 Park Avenue, 14 th Floor, New York, NY ( Capital One ), Grantor for indexing purposes only; PERRY S. HALL, INC., a Virginia non-stock corporation ( Perry S. Hall ), Grantor for indexing purposes only; JULIE MASSIE and SUSAN STOUT, as Trustees, either of whom may act for both, for the benefit of THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic, whose address is c/o: Office of the Arlington County Attorney, 2100 Clarendon Blvd., Suite 403, Arlington, Virginia 22201, (each an Arlington County Trustee, and together with Capital One Trustees, the Trustees ) Grantor for indexing purposes only; THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic, acting through its County Attorney and County Manager, as a beneficiary ( Arlington County ), Grantor for indexing purposes only; BERNICE H. CILLEY, as Trustee for the benefit of WALKER & DUNLOP, LLC, a limited liability company organized and existing under the laws of Delaware, the Assignor, and FEDERAL HOME LOAN MORTGAGE CORPORATION a corporation organized and existing under the laws of the United States, the Assignee, whose business address is Troutman Sanders LLP, 1001 Haxall Point, Richmond, Virginia (the Walker & Dunlop and FHLMC Trustee and together with Capital One Trustees and Arlington County Trustees, the Trustees ), Grantor for indexing purposes only; FEDERAL HOME LOAN MORTAGE CORPORATION, a corporation organized and existing under the laws of the United States, having its principal place of business at 8200 Jones Branch Drive, McLean, Virginia ( FHLMC, and together with Capital One, Perry S. Hall, and Arlington County, the Lenders ), Grantor for indexing purposes only; and THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic and corporate, Grantee (the County ). RECITALS R-1. Owner is the owner of record of certain real property located and situate in 1

4 Arlington County, Virginia, known as Parcel B, Block 6, Fort Myer Heights (the Property ), by virtue of that certain deed recorded among the land records of Arlington County, Virginia (the Land Records ) in Deed Book 4801 at Page 499. R-2. The Property is encumbered by the following Deeds of Trust made by Owner to certain Trustees and securing certain Lenders, as follows (collectively the Deed of Trust ): a. Certain CREDIT LINE DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURTIY AGREEMENT, dated October 24 th, 2014, between Owner as Grantor and Borrower, CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association, as Beneficiary, and AMY B. CONNELLY, ESQ. and JAIME MONTOYA, ESQ., as Trustees, and recorded among the Land Records in Deed Book: 4801 at Page: 520; b. Certain SUBORDINATION AND INTERCREDITOR AGREEMENT, dated October 23, 2014 between Owner as Grantor and Borrower and CAPITAL ONE, NATIONAL ASSOCIATION, national banking association as the Senior Lender and various Subordinate Lenders as Beneficiaries, and recorded among the Land Records in Deed Book: 4801 at Page: 599; c. Certain MORTGAGE dated October 24 th, 2014 between Owner as Grantor and PERRY S. HALL, INC., a Virginia non-stock corporation, as Beneficiary and recorded among the Land Records in Deed Book: 4801 at Page: 590; d. Certain PURCHASE MONEY DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT, dated October 23 rd, 2014, by and between the Owner as Grantor and Borrower, THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic as Beneficiary, JULIE MASSIE and SUSAN STOUT, as Trustees, and recorded among the Land Records in Deed Book: 4801 at Page: 557; e. Certain MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT, dated October 23 rd, 2014, between Owner as Grantor and Borrower, WALKER & DUNLOP, LLC, a limited liability company organized and existing under the laws of Delaware as Beneficiary, and BERNICE H. CILLEY, as Trustee, and recorded among the Land Records in Deed Book: 4801 at Page: 621; and f. Certain ASSIGNMENT OF SECURITY INSTRUMENT, dated October 23 rd, 2014, between WALKER & DUNLOP, LLC as Assignor and FEDERAL HOME LOAN MORTGAGE CORPORATION as Assignee, and recorded among the Land Records in Deed Book: 4801 at Page: 675. R-3. The Property is subject to the control of SP #425 Site Plan for approximately 193 apartment dwelling units with modifications of zoning ordinance requirements to include, without limitation: setbacks, parking ratio, compact parking spaces, bonus density for LEED Silver and on-site affordable dwelling units, and other modifications as necessary to achieve the proposed development plan; located at th Street North and 1520 North Pierce Street (RPC # and ), and any subsequent amendments thereto, approved by the County Board at a carryover meeting on March 11, 2013, (the Ordinance ). Condition #71 of the Ordinance requires Owner to convey a perpetual public use and access easement to the County, with certain conditions, which easement is the subject of this Deed. 2

5 R-4. Pursuant to the Ordinance and Condition #71 of the Ordinance, it is now the desire of Owner, with the consent and approval of the Trustees and the Lenders, as evidenced by their signatures affixed hereto, to create, grant, and convey unto the County a public use and access easement, all as more particularly shown and described on the plat attached hereto and made a part hereof entitled PLAT SHOWING PUBLIC USE AND ACCESS EASEMENT ON PARCEL B, BLOCK 6, FORT MYER HEIGHTS, DEED BOOK 4799 AT PAGE 825, ARLINGTON COUNTY, VIRGINIA, Sheet 1 of 1, dated March 26, 2014, last revised February 5, 2016, and prepared by VIKA Virginia LLC (the Plat ) and approved by the Arlington County Department of Environmental Services, Subdivision and Bonds Administrator on. WITNESSETH: PUBLIC USE AND ACCESS EASEMENT NOW, THEREFORE, for and in consideration of the sum of One and 00/100 Dollars ($1.00), cash in hand paid, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner, with the consent and approval of the Trustees and the Lenders, does hereby create, grant, and convey unto the County, its successors and assigns, a perpetual public use and access easement over, across, and through the Property in the areas and dimensions shown on the Plat (the Public Use and Access Easement Area ) and described therein on Sheet 1 of 1 as PUBLIC USE AND ACCESS EASEMENT 3,609 SQ.FT. OR AC (HEREBY GRANTED) (the Public Use and Access Easement ) for the purposes of use, access, ingress, and egress by the County and the public over, across and through the Property. The Public Use and Access Easement is subject to the following terms and conditions: 1. The Public Use and Access Easement Area shall be open twenty-four hours a day, seven days a week, for pedestrian and bicycle use, by the public-at-large. 2. The County, and its employees and agents, shall have full and free use, without temporary or permanent obstruction, of the Public Use and Access Easement Area for fire, police, and other County emergency vehicle access, twenty-four hours a day, seven days a week. 3. All vehicles, other than those described in sections 1. and 2. above, shall be prohibited from using the Public Use and Access Easement Area. 4. Except in case of fire, police or other emergencies where fire, police and other County vehicles need to park in the Public Use and Access Easement Area, there shall be no vehicular parking in the Public Use and Access Easement Area. 5. The Owner shall, at its sole cost and expense, care for, clean, maintain (including snow and ice removal), repair, replace, install and remove (if so required by the County) the Public Use and Access Easement Area and all improvements and facilities therein. 6. The Owner shall keep the Public Use and Access Easement Area free from all obstructions. 3

6 7. The Owner shall indemnify, defend and hold harmless the County Board, its elected and appointed officials, officers, employees, contractors and agents from any liability, personal injury, death, claims, damages, losses, costs and expenses of whatsoever nature concerning or arising out of the design, construction, installation, care, cleaning, maintenance, repair, use, access, regulation, repair and removal of the Public Use and Access Easement Area or any improvements or facilities located therein, including, without limitation, use of the site plan garage located beneath the Public Use and Access Easement Area. 8. The Public Use and Access Easement shall provide no rights in the public-at-large or any private party as third party beneficiaries thereunder and shall create no obligation on behalf of the County to the Owner, developer, the public-at-large or any third party. 9. The County may, at its sole discretion, require the Owner to install and maintain, at the Owner s expense, signage and/or pavement markings in the Public Use and Access Easement Area, including but not limited to, signage prohibiting non-emergency vehicular traffic in the Public Use and Access Easement Area. The County may, but is not required to, install signage and/or pavement markings in the Public Use and Access Easement Area as well, including but not limited to, signage prohibiting non-emergency vehicular traffic in the Public Use and Access Easement Area. 10. If the Owner fails to perform any obligation under the Public Use and Access Easement, the County may perform the obligation and the Owner shall reimburse the County for all costs incurred by the County in such performance, plus an additional ten (10) percent fee to defray the County s administrative costs of performing the Owner s obligations. 11. The Owner may locate improvements and facilities in the Public Use and Access Easement Area that are approved by the County in the final landscape and engineering plans. SUBORDINATION THIS DEED FURTHER WITNESSETH that in consideration of the sum of One and 00/100 dollars ($1.00), cash in hand paid, the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Trustees, as evidenced by the Trustees signature affixed to this Deed, by and with the consent of the Lenders, as evidenced by the Lenders signatures affixed to this Deed, do hereby acknowledge, agree, and consent that the lien of the Deed of Trust is subordinated to the Public Use and Access Easement and all rights granted herein. MISCELLANEOUS 1. Owner covenants that it is seized of and has the right to convey the Public Use and Access Easement, rights and privileges herein conveyed. 2. This Deed is made with the free consent and in accordance with the desires of the Owner. 4

7 3. The parties agree that the terms, conditions, representations, covenants, and warranties stated in this Deed shall be construed as covenants running with the land and shall be binding upon and shall inure to the benefit of Owner, the County, and their respective agents, successors and assigns. 4. If any term or provision of this Deed shall be invalid or unenforceable to any extent, the remainder of this Deed shall not be affected thereby, and each remaining term and provision of this Deed shall be valid and enforceable to the fullest extent permitted by law. 5. This Deed shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. 6. The Recitals are hereby incorporated into this Deed. 7. Owner hereby represents and warrants that neither Bozzuto Development Services, LLC nor Wesley Housing Development Corporation either own any interest in, or hold a lien with respect to, the Property. [SIGNATURES APPEAR ON FOLLOWING PAGES] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 5

8 WITNESS the following signature and seal: OWNER: PQ APARTMENTS, LLC, a Virginia limited liability company PIERCE QUEEN APARTMENTS GP, LLC, a Virginia limited liability company, its Managing Member PIERCE QUEEN APARTMENTS, LLC, a Maryland limited liability company, its Sole Member BA PIERCE QUEEN, LLC, a Maryland limited liability company, its Managing Member BOZZUTO HOLDINGS, LLC, a Maryland limited liability company, its Managing Member Name: Title: (SEAL) STATE OF MARYLAND CITY/COUNTY OF, to wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that, as of Bozzuto Holdings, LLC, Managing Member of BA Pierce Queen, LLC, Managing Member of Pierce Queen Apartments, LLC, Sole Member of Pierce Queen Apartments GP, LLC, Managing Member of PQ APARTMENTS, LLC, whose name is signed to the foregoing Deed, has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 6

9 CAPITAL ONE TRUSTEE: (SEAL) Name: Title: Trustee for Capital One, National Association COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that, TRUSTEE for Capital One, National Association, a national banking association, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 7

10 ARLINGTON COUNTY TRUSTEE: (SEAL) Name: Title: Trustee for The County Board of Arlington County, Virginia COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that, as TRUSTEE for The County Board of Arlington County, Virginia, a body politic, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 8

11 BENEFICIARY CAPITAL ONE: CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association Name: Title: (SEAL) COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that CAPITAL ONE, NATIONAL ASSOCIATION, by, its, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 9

12 BENEFICIARY PERRY S. HALL: PERRY S. HALL, INC., a Virginia non-stock corporation Name: Title: (SEAL) COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that PERRY S. HALL, INC., by, its, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 10

13 BENEFICIARY COUNTY BOARD: THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic Name: Title: (SEAL) COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that THE COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA, a body politic, by, its, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 11

14 BENEFICIARY FHLMC: FEDERAL HOME LOAN MORTGAGE CORPORATION, a corporation organized and existing under the laws of the United States Name: Title: (SEAL) COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that FEDERAL HOME LOAN MORTGAGE CORPORATION, a corporation organized and existing under the laws of the United States, by, its, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 12

15 FHLMC TRUSTEE: COMMONWEALTH/STATE OF COUNTY/CITY OF, to-wit: (SEAL) Name: BERNICE H. CILLEY, TRUSTEE Title: Trustee for Federal Home Loan Mortgage Corporation as Assignee I, the undersigned Notary Public of and for the jurisdiction aforesaid, do hereby certify that BERNICE H. CILLEY, TRUSTEE for FEDERAL HOME LOAN MORTGAGE CORPORATION, a corporation organized and existing under the laws of the United States, whose name is signed to the foregoing Deed has this date appeared before me, and acknowledged the same. Given under my hand and seal this day of, My Commission Expires: My Notary Registration Number is: Notary Public [SIGNATURES CONTINUE ON FOLLOWING PAGE] [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 13

16 The Public Use and Access Easement herein conveyed is accepted this day of, 2016 on behalf of the County Board of Arlington County, Virginia pursuant to a resolution of the Board adopted May 10, COUNTY BOARD OF ARLINGTON COUNTY, VIRGINIA Name: Title: COMMONWEALTH OF VIRGINIA: COUNTY OF ARLINGTON: to-wit The foregoing instrument was acknowledged before me this day of, 2016, by, the on behalf of the County Board of Arlington County, Virginia. My Commission Expires: Virginia Notary Registration #: Notary Public Approved as to Form: County Attorney 14

17 N QUEEN ST Vicinity Map Pierce Queen Apartments Site Plan #425 Public Use Access Easement RPC # TH ST N Public Use Access Easement N PIERCE ST FAIRFAX DR 0 75 Feet 14TH ST N / Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center Produced and August 2016 ARLINGTON BLVD ARLINGTON BLVD ARLINGTON BLVD

18 Vicinity Map Pierce Queen Apartments Site Plan #425 Public Use Access Easement RPC # TH ST N Public Use Access Easement E ST N PIERC N Q UEEN ST R FAI FAX DR AR 0 N 75 Feet / Pursuant to Section ST of the Code of Virginia, any determination of topography or contours, THor any depiction of physical improvements, property lines or boundaries 14 information only and shall not be used for the design, modification, or is for general construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center Produced and August 2016 LIN ON GT VD BL AR LIN ON GT VD BL AR LIN ON GT VD BL

19 N RHODES ST N QUINN ST N QUEEN ST N PIERCE ST WILSON BLVD Vicinity Map Pierce Queen Apartments Site Plan #425 Public Use Access Easement RPC # TH ST N CLARENDON BLVD N ODE ST 16TH CT N 16TH RD N 16TH ST N Public Use Access Easement FAIRFAX DR ARLINGTON BLVD ARLINGTON BLVD 14TH ST N ARLINGTON BLVD 14TH ST N Feet / Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center Produced and August 2016 N QUEEN ST N QUINN ST N PIERCE ST N ODE ST FORT MYER DR