An Interview With: David Brainerd
Want to get a jump-start on upcoming deals? Meet the major D.C. players at one of our upcoming events!
Madison Marquette took a leap forward last week in its local profile when the Anacostia Waterfront Commission named it and partner KSI as one of two finalists, along with PN Hoffman, to redevelop the Southwest waterfront, stretching from what is now the fish markets, past Phillips Seafood, to the Odyssey dock and police pier. (Although it is referred to as a 47 acre project, much of it is to be marina waters and parkland.) David Brainerd is in charge of Madison’s activity in this region. Originally from western Massachusetts, he came here in 1990 by way of Amherst and MIT’s Sloan School of Management to work for Capital Guidance, a diverse investment and private equity firm, that brought its subsidiary Madison Marquette here from Cincinnati in 2003. Madison has developed Cityline in Tenleytown and is redeveloping the “Festival at Waldorf ” as a half million square foot lifestyle town center in Maryland. The company is known as one of the innovators in lifestyle retail, ie, retail in a non-conventional format, such as open air environments with specialty shops, restaurants, and entertainment components like movie theatres and bookstores. Brainerd has two young children who he is already introducing to his favorite sport of skiing from Park City to White Tail.
How’d you find out Madison is one of the finalists? I was out of town, but Liz Price of the AWC called and emailed to congratulate us. She said they’re going to follow an aggressive schedule to negotiate a term sheet and announce something by the end of September.
How long ‘til a shovel’s in the ground? That’s hard to forecast. There are land assembly issues, you have to get Water Street closed and work out arrangements with existing leaseholders, transfer land from the NCRC, and of course go through the zoning andapproval process. Maybe two years.
How much of a design did you submit? AWC was pretty specific in its request not to do designs. They want to be involved in selecting a design team and in the design process. So we addressed what you might call the vision and the program. We submitted about 30 pages in early May, and after they cut to a short list of five, we sat down for a formal interview.
Where and for how long? At our law firm, DLA Piper, for about two hours.
What was your program? It was consistent with the Anacostia Waterfront plan approved in 2003 for 850,000 square feet of residential; 240,000 of retail, which we could see taking up to 300,000; 80,000 of office; and 450 hotel rooms. We varied some elements of the program, so instead of one 450 room hotel, for example, we would have two boutique hotels.
What differentiated you from the other four competitors? First of all, we believe we assembled an all-star team. We have KSI as our co-master developer and lead residential developer. They’re based in Vienna, led by Dick Knapp, a District resident, and one of the largest residential developers in the Washington area, known for doing more affordable housing than anyone else, including 1200 units in DC and east of the Anacostia river. They’re teamed with Boston Properties on Square 54. Our partner in the hotel development is Carpenter and Company, which did the Charles Hotel in Cambridge, a luxurious but very comfortable hotel that really relates to the community. Northern Real Estate Urban Ventures is the LSDBE, representing 20% of development equity and responsible for LSDBE contracting and community outreach. We have WCI Communities out of Florida, whose specialty is waterfront luxury condominiums, many with marinas with lots of slips, which was a unique element. And we have Canyon Johnson Urban Funds, Magic Johnson’s real estate vehicle, which is teamed with Canyon Capital investment firm in L.A. We've known them a long time, managed projects for them, and had a lot of conversations over the years. Plus, Gina Merritt of Northern has had partnerships with them. They are the most prominent firm in the country focused on urban investment, with a billion of equity. So our team has an incredible amount of experience doing complex urban projects and working in the public/private arena.
Other factors besides the team? The caliber of retail, which is the public face of the project. In California, we created an urban village called Bay Street at Emeryville, in a former industrial town sitting at the foot of the Bay Bridge between Oakland and Berkeley, where we worked with the city to assemble a 20 acre brownfield site, and when we're done it will have half a million square feet of retail, 650 residential units, and a hotel. Our specialty is “place making” and creating vibrant retail mixed-use environments that become the heart of the community.
Did you submit drawings? No drawings. They look at your track record, the quality of your built environments. But we did provide various ideas, such as creating a market pavilion that would be a food hall like Pike Place Market in Seattle, or Terminal Market in Philadelphia, that would play off and reinforce the fish market that's in Southwest and would be an iconic destination for fresh meats and specialty foods.
What’s the next step? Negotiating with the AWC all the parameters, including a financial framework and specifics as to affordable housing, community involvement, and the role of the AWC in the planning of the project, as well as to develop pro forma financials. :)