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Capitol Crossing Residential Component Scrapped As Developer Pitches Hotel Instead

Capitol Crossing rendering
A rendering of the retail and outdoor plaza at Capitol Crossing's 200 Massachusetts Ave. NW

There won't be any housing on the new city blocks being built above I-395 in D.C.

Capitol Crossing developer Property Group Partners filed an application last week with the Zoning Commission proposing to replace the planned 150-unit multifamily building with a hotel, UrbanTurf reports

The proposed 180K SF hotel would be built on the center block of the development, which is being constructed on a deck atop the interstate, three blocks west of Union Station. The hotel would have the same height and density as the approved apartment building.

The developer cited the changing nature of the neighborhood since the project's original approval as the reason for its pivot. The application said the number of households in Mount Vernon Triangle has grown by 32% since 2011 to over 11,000. 

"The number of residential units in the area immediately surrounding the [Capitol Crossing site] continued to increase, such that providing residential use is not necessary to create a mix of uses in the vicinity of the [site], and the hotel use will further the diversity of uses in the area," the application said. 

To provide the affordable housing it committed to as a public benefit in the original approval, the developer is planning to invest in a separate project in Southwest D.C. It said it will finance TM Associates' 101-unit affordable project at 1530 First St. SW in the fast-growing Buzzard Point neighborhood.  

Capitol Crossing is ultimately planned to include 1.9M SF of office and 62K SF of retail, in addition to the 180K SF component it now plans as a hotel.

Construction of the first office building was completed last year and the second is well underway, but the developer has been disappointed with the pace of leasing so far. Property Group Partners switched its brokerage team from Cushman & Wakefield to JLL in July, and has since revamped the Capitol Crossing website with new branding for the buildings.