Wednesday, January 28, 2009

Old Firehouse for Sale- updated.

ec-12. nope.
martini 2020. nope.

but now its for sale


1626 North Capitol Street NW, Washington DC 20002
Map
$1,500,000

Incredible space! Approx 12,000+ sq ft. This was once the old fire house. Total renovation needed. The first floor is restricted for RESTAURANT use only! All plat, plans, drawings convey with this property. Please call for appt.
hope.

i did see a new sign on the old savemore grocery store.
i guess that might be opening soon.

From the eckington yahoo group:
I would like to give the neighborhood an update on the Firehouse restaurant project. Since many people joined this list midstream I will backtrack a little so everyone is on the same page.



Several years ago Nextgen Development was awarded the Firehouse via RFP where we were to be the developer and Mike Benson (operator of St Ex bar and café) would be the operator. Near the end of a year planning stage Mike Benson and his partners dropped out for personal reasons. Over the next 14 Months we met with approximate 20+ qualified operators and while there was interest from many operators, most were frankly afraid to take the chance of opening a restaurant in an untested neighborhood. Near the end of the 14 months we met Twyla Garett of Martini 2020 who upon looking at the site and the neighborhood potential rapidly moved forward to commit to the project. Nextgen proceeded to complete the acquisition and moved forward on the project. Unfortunately for Nextgen Twyla signed that agreement just as the financial mess hit nationwide. As a result four or five months after she signed the agreement the financing she had lined up disappeared and she defaulted on her agreement.



In spite of that default Nextgen made the decision to move forward on the project while we looked for a new operator. We committed to spending between $500,000 and $750,000 of our own funds while we searched for a new operator. (Note: this does not include the $100,000 in interest payments we have made to date while we carry this project) The work performed to date on the site is as follows:



95% completion of the exterior building restoration.

We addressed some environmental issues we became aware of

We completed 90% of the non-structural demo required for the project

We spent $250+k completing the architectural and structural plans.

We initiated structural stabilization of the building

Bid out most aspects of the critical systems so we could move quickly when we find the right operator.



During the time we were doing the above work we have continued to search for operators. While we have gotten close to signing a new operator over 7 times, each time something would surface near the completion of the deal that undid it. I will share two such situations here. One operator we found was in a financial cash position to move forward however one of the conditions they were looking for some nominal help from the city for their first 5 years of operation to make their numbers work.. Unfortunately while we had every indication from the city that this would happen (including legislation being introduced to that effect) however the deteriorating local economy killed the city’s ability to deliver that help in fiscal 2008 and that deal died. Subsequent to that opportunity collapsing we signed a letter of intent with another operator, and started working through the operating agreement, however 1 week after we signed that agreement their financing partner collapsed. (Their financing partner was Lehman Brothers)



During the time we have been have been marketing the space we have gotten a number of operators that expressed interest only if they could purchase the building as part of the transaction. In the past we declined to consider that because we wanted to make sure that we could fulfill our commitment to the community of delivering a restaurant on the first level of the building.



After discussion with several bankers regarding how restaurants are currently being financed we have come to realize that in today’s financial instability that the only likely way that a restaurant will get financing on this type project is if they use the building as collateral to complete the build out. While this was not true in the past the problems banks are having has resulted in it being nearly impossible for any other option.



To that end we have changed our marketing strategy to bring this project to market. Shortly you will see a lease/sale sign appear on the building. This is also being placed in Co-star, Loop net as well as the MLS as a sale/lease. The hope is to bring in an operator that previously might have rejected it because they could not lock in their costs by purchasing part or majority ownership of the project at the time they build-out the restaurant. It may be that we may just become general contractor on this project. Our intent is to still to find a way in spite of the financial environment to try to move this project forward. We are trying to think outside the box to keep this process moving. We have also reached out to the Council members’ office for advice/options also. Thank you for your understanding and patience.



Brian Brown

20 comments:

  1. Yikes... this is going to take a lonnnng time to sell. And even longer to renovate and put into productive use. One step forward, two steps back.

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  2. DAMN. I was really looking forward to some more restaurants in the hood. what made martini 2020 leave?

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  3. I can't say I'm surprised since nothing has gone on there for months. They will definitely not get 1.5 for it, but it remains a cool building and a promising spot. at least it's zoned for a restaurant now.. I'll take anything really.

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  4. I think this is a perfect building for Matchbox, but I'm sure the hipsters would disagree because Matchbox has 2 locations outside of DC.

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  5. What bothers me is that he paid $600,000 in buying it from the city, and now he wants $1.5MM. The higher the real estate cost, the less chance of success a restaurant or any business has. For commercial uses, DC continues to have high real estate costs, which have a huge drag on entrepreneurship and encourage chains. I can't believe some of the prices I see on North Capitol Street.

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  6. if he isn't going to build this, he should return it to the city and get his money back. no way should he be able to make $900K!! you must be kidding me. what a fraud.

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  7. First, I'd love to see a good restaurant complex go into the old firehouse. I've admired the building sionce moving into NW 2 yrs ago. Given that this "was" to be a four floor restaurant offering: brick-oven pizzas, pasta, sushi, and a full bar; a lounge atmosphere with live music performances; an espresso bar; and a rooftop tapas place.

    As for the cost and profit, $600K for the building, $250K+ for the architectural work/plan, $100K for interest; plus all the work done on structural/exterior/environmental clean-up work means the profit isn't nearly $900K.

    If the city wants to expand economic development, it is going to have to make this attractive for someone to step in and operate this project. This needs to be done right or you're going to end up with a half-baked effort that only has to ripped out later and boosts the cost again.

    Just some thoughts from an interested observer.

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  8. The city did step in and gave the developer a very good price on the property. The problem is the developer is now trying to sell it for much more. In retrospect maybe the city should of offered the property at market value and provide some tax incentives instead. That at least would prevent the flip that's happening now.

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  9. So the bottom line is Brian Brown got a sweetheart deal from the DC government and now stands to make almost a million dollars by turning it around and selling it? What a scam. Note the careful wording in this e-mail – he “committed to spending between $500,000 and $750,000 of our own funds” but of course did not actually spend that amount. $250,000 on architects? 95% complete exterior restoration? Laughable. It looks just like it did when he took possession of it. There’s no way he spent a quarter million dollars on architects before even having a concept for what it was going to become! Selling it off for $1.5M makes it incredibly difficult for the buyer to operate it profitably and cover their costs. If Mr. Brown wanted to make this happen perhaps he should have been more flexible with some of the “20+ qualified operators” and arranged terms that made financial sense to them. Also, you’ve gotta love the comment on his real estate listing – “The first floor is restricted for RESTAURANT use only!” As if that is somehow possible. All of his comments strike me as attempting to shift the focus from the fact that he failed to deliver what he told the city he would deliver and now stands to make a million bucks. The city should sue this liar, take back the property and auction it off.

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  10. Wow -- pretty quick to judge Mr. Brown. From what he is saying, it sounds as though he has at least $1.2M tied up in this project, possibly more. After closing on a $1.5M deal, assuming commissions and taxes come out at roughly the same rate they do for residential property, then he nets about $1.35. That means he might, just might, make $100k. Further, I think what he is saying is this is a route he is trying in hopes he can actually get the project done. If it works, then great. There is one point I do agree with some of the prior postings on and that is the exterior completion. It looks like some work has been done, but not nearly what he estimates.

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  11. He wants to imply that he's got $1.2M tied up in the project, but he doesn't come out and say that. As you said, 95% complete exterior renovations? Please.

    Sorry but as of a year ago the city was supposed to rescind its award to NexGen as they obviously couldn't handle this. Why does he now own the property?

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  12. The fire house was actually built 1897. And I'm fairly sure that DC real estate law requires that the listing include the fact that the building is listed in the DC Inventory of Historic Sites. In other words, it's a legal landmark and all exterior work must be reviewed and approved by the DC Historic Preservation Office. I hope the realtor will revise the listing to include that fact.

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  13. This a sham. It was obvious from the beginning that Brian Brown could not handle this project. All of his developments in the community are eyesores. Even the Anna Cooper House where he lives is an eyesore with the weight set and dart board on the front porch and the unfinished retaining wall around the perimeter of the house that has existed more than a year. We have been duped.

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  14. Let's not forget his two pop-ups that dominate the meager North Capitol street skyline. U-G-L-Y painted cinder block. One of the floor additional floors lacks windows.

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  15. i drove by there this weekend to check out the exterior renovations he claims are 95% complete. What a joke - missing bricks, missing windows (not even boarded up, just open to the elements), no masonry work whatsoever. The fact that he is claiming it to be 95% complete demonstrates we are dealing with a liar.

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  16. That's too bad that this has turned out this way.

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  17. How would everyone feel if this just became a residence?

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  18. i think it being a residence is like stealing from the community.

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  19. We need to make sure that this is NOT sold for $1.5 million. Where's the outrage? It's sad how complacent everyone is that this developer stands to profit so heavily on the sale of public property that he purchased for, what, $500k? He shouldn't see a dime of profit on this. Audit the expenses that he put into it, and allow him to sell it for what he paid + expenses, but not a penny more. Email Councilmember Thomas if you have to

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  20. speaking of the Anna Cooper house - is there any way to force them to rebuild the retaining wall? It has destroyed the brick sidewalk and is filled with weeds, garbage and rodents...the beautiful house should be a point of pride for the neighborhood but instead it's a an eyesore. This would not require much investment compared with the amount that went in to fixing up the house, I don't understand why the owner hasn't done it!

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