Monday, January 11, 2010

Corcoran In Negotiations With New Developer Partner

It was mentioned at tonight's ANC 6D monthly business meeting by the general counsel for the Corcoran that they are in negotiations with a new developer partner for the Randall School site. The Corcoran was requesting a 2-year extension of their Planned Unit Development (PUD) agreement with the ANC before going to the Zoning Commission, which was approved unanimously 7-0. While the general counsel was not able to disclose the name of the developer due to the sensitivity of negotiations, he indicated that he anticipates an agreement will be made before the end of the month. When Monument Realty backed out of their deal with the Corcoran in the Fall of 2008 after the collapse of Lehman Brothers, the Corcoran retained the firm West, Lane, & Schlager to identify potential developer partners for their project. The commercial real estate firm contacted 50 potential developers with experience in mixed use projects of this kind in the District, from which 35 parties expressed interest. Then, seven of those 35 developers sent proposals and the Corcoran chose the one they thought was the best, to negotiate a purchase & sale agreement (PSA). Once the new developer partner and the Corcoran come to terms on the PSA, there will be a due diligence period of 4 - 9 months in which the developer has time to determine the financial feasibility of the project and fine-tune their understanding of the local market. During the due diligence period, the developer has the ability to back out of the agreement without financial penalty. Once the new developer is announced, the Corcoran and their new partner will come before the ANC to discuss their plans for the project, which could possibly include a change to the original PUD application. The existing plan with Monument called for the Corcoran College of Art + Design to occupy space at the historic portion of Randall School, which would be fully renovated. Additional wings of the school that were built after the original school was constructed would be demolished and replaced with an apartment building.

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