Developer Geoff Griffis relents on plans to develop the blighted Congress Heights Metro site, agreeing to a deal that would be a win for former tenants
By Jeffrey Anderson
One of the District’s longest-running and scandalous housing controversies is heading towards a resolution, District Dig has learned.
Through a court mediation, tenants of the 1309 Alabama Avenue Congress Heights Tenants Association, 1331-1333 Alabama Ave Congress Heights Tenants Association, and 3210 13th Street Congress Heights Tenants Association have identified a third party developer who has agreed with Geoffrey Griffis and his firm CityPartners to a purchase of three lots with four vacant brick apartment buildings near 13th Street and Alabama Avenue in Southeast, at the Congress Heights Metro Station.
According to documents filed this week in D.C. Superior Court, Griffis also has agreed to assign a purchase and sale agreement with the Washington Metro Area Transit Authority that will allow the new developer to acquire three adjacent undeveloped lots that are part of a larger assemblage of parcels Griffis has labored to develop for more than a decade.
A separate lot, the subject of a District Dig expose last October, at the corner of 13th and Alabama, is to be acquired from city contractor Monica Ray, a proxy for Griffis in his pursuit of a Planned Unit Development (“PUD”), which includes the lot.
Griffis acquired the dilapidated apartment buildings on December 27, 2017, from his then-partner A. Carter Nowell of Sanford Capital. Soon thereafter, the tenants sued CityPartners and Sanford–which was collapsing into bankruptcy–alleging a breach of their statutory rights to purchase the buildings.
Now the tenants, who have been relocated for years, have partnered with a group led by a subsidiary of Trammel Crow Company that is poised to obtain the properties.
Altogether, the land acquisition the parties have agreed upon totals 82,045 square feet–not including the corner lot–across the street from The Entertainment and Sports Arena, located on the St. Elizabeths East Campus, which also is being redeveloped.
The intention of the developers, according to a letter of intent dated February 11, is construction of a mixed-use, multifamily rental community with commercial office and retail space.
Sale of the properties, which the parties estimate will take place by October, would conclude a lengthy and costly legal battle that began five years ago with a lawsuit by D.C. Attorney General Karl Racine’s office to remediate slum housing conditions that persisted under Sanford.
Nowell acquired the properties in 2008, and in 2011 formed the first of two partnerships with Griffis, with the intention of obtaining PUD approval so that Griffis could purchase and develop the assembled parcels.
A PUD is necessary to show that a project is of higher quality than what would result from “matter-of-right development,” and to convince neighborhood stakeholders that it would benefit the community.
After Griffis and Nowell obtained that approval in 2015–but before they could consummate a sale–Racine’s office filed its lawsuit against Sanford, in 2016, charging Nowell with housing code violations that forced the tenants to live in squalor among rodents, infestation and mold.
In September 2017, the court appointed a receiver to oversee remediation efforts under the Tenant Receivership Act, and in November 2017 ordered Sanford to negotiate exclusively with the tenants for 60 days over a sale of the properties under the Tenant Opportunity To Purchase Act (“TOPA”).
In late December 2017, however, before that period expired, Nowell and Griffis executed a transfer of the properties from Sanford to CityPartners through a deed-in-lieu of foreclosure–the culmination of a series of transactions that Racine’s office has alleged was a “sham,” a deceptive maneuver aimed at circumventing tenants’ TOPA rights.
Dozens of tenants had left for good by then. Some relocated, their rent differentials paid by Griffis under the receivership order.
Griffis issued an Offer of Sale to each of the remaining tenants on June 11, 2018–after the tenant associations sued him and Nowell on May 17, accusing them of “a strategy of attrition through neglect.”
In the fall of 2019, Gilbane Construction, in partnership with nonprofit developer National Housing Trust/Enterprise Preservation Corp. (“NHT”), reached a tentative agreement to acquire the properties from CityPartners, according to sources familiar with the matter.
“Economic issues brought on by the COVID-19 pandemic resulted in that particular purchaser ultimately not proceeding through to closing,” according to this week’s court filings.
The case has dragged on, with Griffis paying the receiver’s fees and rent differentials for the remaining nine tenants, who are represented by the Washington Legal Clinic for the Homeless and pro bono lawyers from Arnold & Porter.
The February letter of intent is not binding, nor is it “a contract to purchase or sell real estate.” Judge Shana Frost Matini this week granted motions to stay the court proceedings pending the outcome of a potential sale.
“The parties represent that they have identified a new potential third-party purchaser for the real property at issue in this case, and seek to continue the stay in this matter to permit the potential purchase to take place,” she wrote, setting a date for a status hearing on October 22.
CityPartners and Trammel Crow expect to reach a finalized agreement consistent with the PUD in the coming weeks, states a motion filed by Griffis’s company.
With a key exception:
Under the existing PUD, Griffis was to deliver the minimum affordable housing allowed by D.C. law, which calls for just 8% of the floorspace to go toward affordable housing.
Trammel Crow, on the other hand, has been working on a development agreement with the tenant associations and NHT that calls for an 100% affordable complex, the motion states.
The steadfast remaining tenants, who vowed to fight for their TOPA rights, plan to return to live there.
In Racine’s case, Judge Anthony Epstein stayed the proceedings through October 18, and ordered Griffis to continue to pay the receiver’s full compensation of $2,350 per month and reimburse her legal fees.
Griffis also must continue to pay the tenants’ rent differentials.
No information was immediately available on plans for the corner lot owned by a limited liability company formed by Monica Ray. In 2014, just as Griffis’s PUD application was under review, Ray alleged in a lawsuit against the owners at the time–grantees of a million-dollar housing loan from the District–that she had contract rights to purchase the property.
Ray eventually gained control of the lot after she also sued the District, which had scuttled that sale.
Griffis and Nowell had a concurrent claim to that lot: A previously unreported Membership Interest Purchase Agreement filed with the Recorder of Deeds, on June 13, 2014, indicates the desire of the lot’s owners at the time to sell a 100% membership interest in the lot to Sanford Capital, a co-applicant on the PUD.
