A major Ward 7 mixed-use project anchored by a D.C. agency is ready to break ground after the developer secured its construction financing.

Cedar Realty Trust announced Thursday it formed a joint venture with Asland Capital Partners and Goldman Sachs Urban Investment Group, and the team secured a $105M construction loan from JPMorgan for the first phase of the development at the intersection of Minnesota Avenue and Benning Road NE.

The team has begun demolition on the site and plans to host an official groundbreaking event this month for the project's first phase, Cedar Realty Trust Chief Operating Officer Robin Zeigler wrote in an email to Bisnow. She said she expects the project's first phase will be complete by the end of 2022.

The first phase is planned as a six-story commercial building with 240K SF of office and 18K SF of retail. In May 2020, Mayor Muriel Bowser announced the District would relocate the 700-person Department of General Services to fill the project's office component.

The development, branded as Northeast Heights, is ultimately planned for up to 1,300 residential units, 200K SF of retail and the office building. It is planned to replace two low-rise retail properties, the Senator Square shopping center and the East River Park shopping center.

The project and its D.C. agency anchor are expected to act as a catalyst for development around the Minnesota Avenue and Benning Road intersection, with several other projects planned in the area. Zeigler said in a release she expects the project will bring substantial economic activity to Ward 7.

"As the cornerstone and catalyst to the Northeast Heights redevelopment, construction of the DGS headquarters building will begin the long-planned revitalization of the Minnesota/Benning Corridor," Zeigler said.

Trammell Crow is serving as the designated fee developer for the project. JLL's Roland Merchant Jr., Nicco Lupo and Thomas Pryor arranged the debt and equity financing.

The property is located in an opportunity zone, and the team said it is utilizing the program's tax incentives for the project.

"We believe that the impetus behind the opportunity zone program was precisely the development of projects such as Northeast Heights, aimed at creating vital investment opportunities [in] mixed-income, underserved neighborhoods," Asland Capital Partners CEO James Simmons III said in a statement.