Amendment to Twinbrook Joint Development Agreement

Transcription

1 Planning, Program Development and Real Estate Committee Action Item IV-A April 11, 2013 Amendment to Twinbrook Joint Development Agreement

2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: Twinbrook Joint Development Agreement Amendment PRESENTATION SUMMARY: Request Board approval to amend the Twinbrook Second Amended and Restated Joint Development Agreement to: extend the date to close on Phase 1B to June 30, 2013 and extend the date to renegotiate a Phase 3 closing to November 30, 2013 PURPOSE: Request Board approval to amend the Twinbrook Second Amended and Restated Joint Development Agreement to: Extend the closing date for Phase 1B to June 30, 2013 Extend the date for the renegotiation of Phase 3 terms to November 30, 2013 DESCRIPTION: The Second Amended and Restated Twinbrook Joint Development Agreement (JDA), executed April 11, 2011 with Twinbrook Commons, LLC, an affiliate of the JBG Companies, provided that: Twinbrook Commons Residential South LLC, also a JBG affiliate, would close on the second phase of the Twinbrook joint development project, Phase 1B, by December 30, 2012; and that Closing on Phase 3 of the development would occur by May 30, Neither of those closings are able to occur on schedule for reasons explained below, which is why the additional time is being requested. Closing on Phase 1B of the Twinbrook project, which will provide 175 market rate apartments, 31 moderately priced apartments, and 33,000 square of retail space, was delayed because Metro has not been willing to accept the West Garage, a 426-space replacement facility, which would provide new spaces for Metro commuter parking displaced by Phase 1B. There are extensive cracks in both the precast elements and cast-in-place elements of the replacement garage, and JBG's contractor resisted Metro's specifications for repair over a several-month period. The contractor is now prepared to make repairs and warranty its work for the next 10 years, and the 1B lease, previously approved in form by the Board in March 2011, is being readied for execution not later than June 30, The lease will be with Twinbrook Commons Residential South, an affiliate of the JBG Companies.

3 It will not be executed, however, until Metro certifies that the West Garage is substantially complete and ready for use, with only minor punch list items remaining to be finished, or the developer provides a plan for temporary replacement parking that is approved by Metro. Phase 3 of the Twinbrook project is scheduled to include 751 apartments and condominiums, and 76,500 square feet of retail space. In , when Metro renegotiated the JDA to account for the depressed real estate market and restart construction, both parties agreed that it was premature to renegotiate Phase 3 of the development until the market improved. The delays on Phase 1B recently affected the timing and willingness of both parties to address Phase 3. But both parties are now willing to do so. Therefore, staff is requesting an extension of time for the Phase 1B closing to no later than June 30, 2013 and for renegotiation of the closing date and selected terms for Phase 3 to no later than November 30, The Phase 3 negotiations will be brought to the Board for approval. Key Highlights: Completion of the 426-space Metro garage will provide replacement parking spaces for those displaced by Phases 1A and 1B, which together encompass 412 market rate apartments, 73 moderately priced apartments and 40,500 square feet of retail space. Phase 1A was completed in 2010 and is occupied. Phase 1B is to be completed with 18 months of closing, which is now expected to occur no later than June 30, Phases 1A and 1B provide rental income to Metro, and the land value of the two phases was sufficient to finance the West Garage, which was constructed with no cost outlay by Metro. Four more phases of construction are slated for the future: 325,000 square feet of office, 595 condominiums, 515 apartments, and 158,500 square feet of retail. Phase 3 terms, including a closing date, are proposed for revision by November 30, Closing for the project's office phase is scheduled for December Closing for the project's first condominium phase, with ground floor retail, is scheduled for December Background and History: N/A Discussion: N/A

4 FUNDING IMPACT: Extension of the Phase 1B execution date will result in a rental income to Metro commencing upon execution Project Manager Rosalyn Doggett Project LAND/CFO Department/Office: TIMELINE: Previous Actions 9/1998 Selection of JBG as Developer 10/2002 Execution of JDA 2007 Execution of amended and restated JDA 2009 Execution of Phase 1A lease Anticipated actions after presentation 6/30/2013 Execution of Phase 1B lease 11/30/2013 Approval of amended Phase 3 terms 12/30/2013 Execution of Phase 2A office lease RECOMMENDATION: Approval to amend the Twinbrook Second Amended and Restated Joint Development Agreement to: Extend the closing date for Phase 1B to June 30, 2013 Extend the date for the renegotiation of Phase 3 terms to November 30, 2013

5 Washington Metropolitan Area Transit Authority Twinbrook Joint Development Agreement Amendment Planning, Program Development and Real Estate Committee April 11, 2013

6 Purpose Amend JDA to extend time to: Close on Phase 1B in June 2013 Revise start date/selected terms for Phase 3 in Nov 2013

7 Site Plan and Phases

8 Current Closing Schedule Start t Date 2007 JDA Current Proposed Phase 1A apts./retail completed Phase 1B apts./retail 12/2012 6/2013 Phase 2A office 12/ /2013 Phase 2B condos./retail 12/ /2014 Phase 3A apts./retail 5/2013 TBD Phase 3B condos/retail 5/2013 TBD Metro West Garage to be complete prior to Phase 1B Metro East Garage to start prior to Phase 3A

9 Issues West Garage Phase 1B Phase 3 Exterior Complete. Repair work to occur mid-april il to mid- June Closes once West Garage repair work is substantially complete or temporary parking is provided New closing date and selected terms to be negotiated

10 Recommendation Amend JDA to extend time to: Close on Phase 1B in June 2013 Revise start date/selected d terms for Phase 3 in November 2013

11 Appendix: Phase 1A - The Alaire