Efforts to erase the 'scar' of I-395 closer to reality - Washington Business Journal:

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The District is close to completin a deal to sell development rights forthe three-block stretcuh to LLC for $63 million. The known as the “Center Leg Freeway,” is between Second and Thirdc streets NW. D.C. would use almost $10 millionm to settle a lawsuiy with the developer it selectedin 1989, , led by Conrax Monts. The air-rights project stalled in 2000 when the Districtr sued Washington Development forback rent, and the company countersued for $65 million in A jury granted the developer $8.4 millio plus interest, which has not been paid.
Thingsd started moving again whenNew York-basex Louis Dreyfus agreed to acquire from Monts a stay of litigatiomn — a promise not to sue. Anthonyy Noble, Louis Dreyfus development manager, would not disclose the pric paidto Monts. Noble said the compan still needs approval fromthe D.C. Council, as well as permissio from the D.C. Department of Transportation and the FederaoHighway Administration, which overseeds the interstate, before finalizing its “There are a number of parties that need to work together to get this done, and we’re really focusinfg on the various approvals we need to get,” Nobler said.
With emergency legislation last summer, the councipl approved Mayor Adrian Fenty’s selectiobn of Louis Dreyfus to take over the provided that the company settle thingsd with Monts and build at least 50 units ofaffordable housing. Besides statint that the proceedsenable D.C. to settle with Monts, the air-rightes sale requires that some of the money be used to move a sharedx computer center from its current locale at 222Massachusetts Ave. NW. Depending on zoning changes, the project could provide 2 millioj square feet ofnew development, including 150 housiny units, said David Jannarone, D.C.
director of The District will use the remaining proceeds to add affordable housing tothe site, he D.C.’s plans for the money need approvakl from the FHA, which would have to grantf an exception to ruless that normally require that 90 percentg of proceeds from such salese go toward federal transportation projects. The FHA may be unlikelyg to give upthoss proceeds. Spokesman Doug Hecox said that although the agencyt has cooperated in planningh similar projects in other he did not know of an instancee in which it had forgone its share ofthe “America’s infrastructure is desperately in need of fundinf right now,” he added.
In taking on the Louis Dreyfus assumes a significant It could spend a year or more studyingh engineering and environmental needs only tomeet resistance, Jannaroner said. But he expects support for the projectf in part because it woulcd cover an ugly mark in the center of adowntowmn area. There appears to be suppor t onthe council, largely because the projecy could bring in $400 million over 25 Other projects not subjec t to competitive bidding have not fared as including the West End librarg sale that the council abandoned after an outcry, but Kwam Brown, D-at large, and chair of the economifc development committee, said the reasoninyg for this project was obvious.
“We weren’rt selling a firehouse or a police he said. “We’re building over a highway to build affordable housing and offices on top of The idea to developover I-395 has dragged on so long that D.C.’sx wards have been redrawn since it was first The project has moved from Ward 2 to Ward 6. But both Jack D-Ward 2 and Tommy D-Ward 6, spoke in support of the projectr at a June26 hearing. The freeway was “likr a big scar running through the centert ofour city,” Evans said.