The SunTrust Plaza and Line Hotel deals are symptomatic of the same government backed Big Capital over neighborhoods phenomena which is consuming Adam Morgan and other DC neighborhoods.
Whether the Big Capital are private equity, pension or sovereign wealth funds, neighbors and their values most be consumed and restructured for this capital to flow. Land use up-FLUMed, public space monetized, the low/moderate income displaced/marginalized, values flattened and risks assumed by the public. Big Capital needs $100M deals.
In September of 2015 developer PN Hoffman armed with over $300M in city land and subsidy and a financing team of banks led by SunTrust and including SunTrust merger partner BB&T closes on the $1.2M Wharf Phase I. PN Hoffman is able to close on financing because the city reduced the required number of affordable housing in the project by about a 1/3 and redefined affordable to include individuals making $100K and $120K per year in income for 1/2 the remaining affordable units.
About four months later in February of 2016, PN Hoffman fat with public subsidy and equity partner Potomac Investment Properties announces a deal with the same SunTrust to redevelop an area which includes the SunTrust Plaza with luxury condos. While I can’t draw a 100% direct connection, PN Hoffman is leveraging the affordable housing the city waved for him at the Wharf to build luxury condos in Adams Morgan, while consuming neighborhood public space a SunTrust Plaza.
PN Hoffman’s (now Hoffman & Associates) luxury condo deal at SunTrust Plaza similar to the Line Hotel’s $46M tax abatement boils down to which way government swings, the interest of Big Capital or people and neighbor. If we review DC’s Office of Planning’s (OP) proposed changes to the Comp Plan’s Mid-City section we can get a hint as to our governments leanings. OP changes its description of Adams Morgan from “colorful” to “unique”. Colorful focused on people and diversity of community, unique refers to a flat out Big Capital investment opportunity. I highly doubt there is not connection between Hoffman’s and SunTrust’s Wharf deal and the SunTrust Plaza deal hot on its tail.
Today, SunTrust which was bought by BB&T is now Truist Financial Corp.. Truist is a publicly traded and its top shareholders are The Vanguard Group, Inc., Capital Research & Management, BlackRock Fund Advisors, State Street Global Advisors (SSGA) and JPMorgan Investment. At the Wharf one of Hoffman’s main investors is PSP Investments a Canadian Government entity which manages their pension funds.
So while The SunTrust Plaza doesn’t involve the city effectively making backdoor investments in private equity hedge funds as with The Line deal. Investments of DC funds in hedge funds is against city policy. SunTrust Plaza does continue our city’s partnership with Big Capital to reshape and refine neighborhoods to fit the investment criteria of Big Capital.
I would not necessarily call this shady business practice as much as our public policy. And if the Council passes the Comp Plan in the next month as is, Big Capital and their interest and our government become one and the same, even in Adams Morgan. And the Jack Evans business plan becomes a reality.
William
—–Original Message—–
From: “margarita uricoechea” <muricoechea@gmail.com>
Sent: Tuesday, March 9, 2021 2:41pm
To: adamsmorgan@groups.io
Cc: “HearUsNow!” <HearUsNow@googlegroups.com>, everett.lott@dc.gov, “Trueblood, Andrew (OP)” <andrew.trueblood@dc.gov>, “Mendelson, Phil (COUNCIL)” <pmendelson@dccouncil.us>, “McDuffie, Kenyan (Council)” <kmcduffie@dccouncil.us>, “White, Sr., Trayon (Council” <twhite@dccouncil.us>, “Pinto, Brooke (Council)” <bpinto@dccouncil.us>, “Bonds, Anita (Council)” <abonds@dccouncil.us>, “esilverman@dccouncil.us” <esilverman@dccouncil.us>, “Cheh, Mary (COUNCIL)” <mcheh@dccouncil.us>, “Gray, Vincent (Council)” <vgray@dccouncil.us>, “rwhite@dccouncil.us” <rwhite@dccouncil.us>, “Allen, Charles (Council)” <callen@dccouncil.us>, chenderson@dccouncil.us, jlewisgeorge@dccouncil.us
Subject: Re: [adamsmorgan] Part 2: up-FLUMing & The Detroit Hedge Fund that Eat Adams Morgan