Former DDOT Director To Lead Boston CRE Firm’s Expansion in D.C. Market
Redgate, a Boston-based investor, developer and real estate adviser, is looking to grow its presence in the D.C. market, and it brought on a well-known figure in the region to help it achieve that.
The company announced last week it hired Leif Dormsjo, the former director of D.C.'s Department of Transportation and deputy director of Maryland's Department of Transportation, to lead its D.C. office and spearhead its expansion in the Mid-Atlantic region.
Dormsjo worked on some of the region's largest transit projects in the last decade, including the Purple Line and the D.C. Streetcar. In an interview this week, he said the region can learn important lessons from the hurdles those projects have faced, and he also sees the projects as catalysts for the type of transit-oriented development that he plans to work on at Redgate.
He left DDOT in 2017 and began working for Louis Berger Services, where he remained until joining Redgate. At that last job, he said he had more of a national focus and told Bisnow he is excited to dive back into local projects.
"From a personal perspective, I’ve been really desiring to be back in the region," Dormsjo said. "When I left government, having been in senior positions in Baltimore city, the state of Maryland and the District of Columbia, I went into a private-sector position that had a national scope, and the last year certainly with Covid has brought home for me the need to be more centered and closer to home, and closer to a region that I’ve spent the bulk of my career in."
Redgate plans to spend the next two to three years growing its advisory business in the region, partnering with developers and institutions to help them navigate large projects, Dormsjo said. The company has already landed two partnerships in the D.C. region, with College Park's government for its new City Hall complex and with Children's National Hospital on its Walter Reed campus.
The D.C. region has many of the same types of large institutions Redgate has partnered with in Boston, such as universities, hospitals, government agencies, transit systems and economic development authorities. He said that similarity was one of the main reasons Redgate decided to expand in the D.C. region.
"Certainly, those institutions will be an early and intense focus for us," he said. "You can look at any campus or large government agency within this region, they’re all facing challenges from a space needs perspective, budgetary pressures and just the physical infrastructure needs as well. We feel that’s an area that’s a gap oftentimes in the advisory space, and it’s one that we’re looking to fill."
The company has five employees in the D.C. region, and Dormsjo said he is working to secure an office space near Gallery Place. He said he plans to grow the team as it lands more advisory business in the region, and once it has a large enough presence, it could start making its own investments.
Redgate has invested in several projects in the Boston area, including a billion-dollar partnership with Hilco to redevelop a South Boston power plant into 636 housing units, 860K SF of mixed-use space, a 240-room hotel and 5.7 acres of open space.
"Right now, our investment focus is in New England," Dormsjo said. "The idea would be that as we gain more market insight, more critical mass in the Mid-Atlantic, we would start to include investment opportunities within the region in our pipeline."
He said Redgate's timeline for investing in new D.C. projects depends on the growth of its advisory business, but he expects it will be within the next two to three years.
Dormsjo said his focus will span from Baltimore to Richmond. He sees many opportunities for new TOD in the region, especially with Metro seeking new development partnerships for station-adjacent land and with Amazon last week committing $125M to finance affordable housing near transit.
"Metro across all three jurisdictions has great sites, and with the announcement by Amazon around their affordable housing fund, I think it makes the promise and possibility of development at Metro stations all the more exciting," Dormsjo said. "Getting involved with those types of transit-oriented development projects in an advisory capacity would very much be something that we would like to do."
Maryland's Purple Line also presents development opportunities, though it likely won't come to fruition as soon as planners had hoped when Dormsjo worked on the project at MDOT.
Dormsjo spent eight years at MDOT from 2007 to 2015, rising to become the deputy director. While there, he worked on putting together the public-private partnership and creating the plans for the Purple Line, but he left before its groundbreaking in 2017.
The project has faced major cost overruns and lawsuits since breaking ground, and in September, its contractors walked off the job and terminated the partnership. In December, Maryland reached a $250M settlement with the contractor, and the state is now working to select a new contracting partner, narrowing its search to three companies in March.
Dormsjo said he can't speak to the specific issues with the contractor because they transpired after he left MDOT, but he said the situation should provide lessons for jurisdictions working on major public-private partnerships.
"Infrastructure is just getting more and more complicated and challenging, and you’ve really got to be thoughtful about not only how you lay out your process of selecting a developer or builder but how you manage that relationship through challenges," he said. "At the end of the day, you’ve got to have strong contractual documents, but you’ve also got to have strong relationships."
Once it finally opens, Dormsjo said he thinks the Purple Line will help spur new development and economic growth in suburban Maryland.
"There are going to be zones of more compact transit-oriented development along that corridor, and there will also be stations that will have more of a neighborhood feel," he said. "I see the Purple Line as catalytic of solid mixed-use development that’s going to be really attractive for residents and businesses and other institutions."
The D.C. Streetcar, another transit project that has faced years of hurdles, opened during Dormsjo's time leading DDOT in 2016, and a Washingtonian story from the time called him "the man who got the streetcar running."
Plans to expand the streetcar line have also stalled. A planned western expansion to Georgetown was killed last year, but the eastern expansion to the Benning Road Metro station in Ward 7 still appears possible. Mayor Muriel Bowser's proposed 2022 budget would advance the Benning Road extension, which advocates say would provide important transit access to underserved neighborhoods east of the Anacostia River.
"The extension to Benning Road is imperative," Dormsjo said. "The system was never intended to be that minimum operating segment. It was intended to be built out and to increase the transit value, and I think it makes all the sense in the world to address the historic underinvestment in transportation infrastructure in Wards 7 and 8."