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$25M Emergency Shelter Project In Eckington Faces Funding Gap

A rendering of the proposed 30-unit emergency shelter mixed-use project at 101 Q St. NE

Plans to construct a five-story building to serve as a shelter for domestic violence survivors in Northeast D.C.'s Eckington neighborhood are at risk because of a funding issue that the development partner partially attributes to January's government shutdown

DC Safe, a nonprofit that provides housing for domestic violence survivors, received Board of Zoning Adjustments approval in May 2018 to build a five-story, 30-unit shelter at 101 Q St. NE. 

The nonprofit is partnering with Building Partnerships LLC and Marcus Asset Group to build the facility, which it estimates will cost $25.2M. The 32K SF building is also planned to include administrative offices that will serve as the nonprofit's headquarters. 

The neighborhood has supported the new project, with the Eckington Civic Association and Advisory Neighborhood Commission 5E recommending approval during the BZA process. 

The team had planned to break ground in August, but it now faces a $4M funding gap that is preventing it from beginning construction, MAG's Colin Thomas tells Bisnow. He still hopes to break ground by year-end, but the delay will likely make the project's construction costlier. 

The funding issue arose because the project failed to receive an expected allocation of New Market Tax Credits, Thomas said. This year's awarding of the credits came two months later than usual because of the government shutdown, Thomas said, and this limited the team's time to find additional gap financing options. 

Thomas said he is now reaching out to potential donors who could help fill the funding gap and allow the project to break ground as soon as possible. 

"There are groups out there, charitable organizations, who might support this," Thomas said. "There are donors who have helped the shelter in the past, but I think we would need to have someone new to come in. I just don't know that the typical donors are going to be able to cover the gap."

If the team is able to secure funding, the project will likely cost more because of the delay. The price agreements the team reached with subcontractors expired after Labor Day, said Building Partnerships LLC's Robert Aramony. He said he is waiting to have a firm start date before locking in prices again, but he expects costs will rise by 5%.

"We're in a tight market and trades like concrete are expected to rise," Aramony said. "The other thing is if we're pouring concrete in the winter months, that adds another $40K a month."

Further complicating the issue, the DC Safe shelter's agreement for its temporary home in a condo building expires in March 2021, and if the project doesn't deliver by then it could be left without a home. Thomas said he expects the project to take about 15 months to construct, and if it isn't completed by that deadline the shelter could be forced to find another temporary home or to shut down.