One decade and three mayoral administrations after the District crafted the master plan for a “vibrant, mixed-use urban waterfront community” stretching from the eastern edge of Capitol Hill to the western shore of the Anacostia River, the demand for real estate is peaking. But after a long wait, there might be some movement in the plan to develop the area.

In the midst of the targeted 67 acres, known as Reservation 13, sits the old District of Columbia General Hospital. Formerly a 482-bed acute care facility that provided medical and surgical care and substance abuse treatment for D.C. residents, including inmates at the nearby D.C. Jail, it now serves as a makeshift homeless shelter for up to 1,000 of the city’s poorest. Plagued by rodent infestations, problems with water, and heat and security issues, residents and advocates for the homeless have called on city leaders for a better solution.

Meanwhile, the 20003 Hill East ZIP code has become a hot real estate market and high-end development is creeping closer to the 19th Street Southeast border of Reservation 13. In the past few months, the luxury 141-apartment Kennedy Row project opened its doors across from Eastern Senior High School and a previously vacant 10-unit building on 18th Street Southeast was renovated into new condominiums, helping to feed the need for restaurants, banks, dry cleaners and other retail development proposed for the Reservation 13 site.

“It has already been 10 years. My neighborhood is pretty frustrated by the pace,” said Brian Flahaven, commissioner of local Advisory Neighborhood Commission 6B. He characterizes the long saga of stalled development as a case of “lack of political will.”

But this week, Flahaven and other stakeholders received a bit of good news.

East Down and Bound

The office Mayor Vincent Gray tasked with overseeing the 50-acre Hill East project has picked a team for “phase one” — development of a two-acre fraction of the site — and officials say they have begun ad-hoc talks with the D.C. Department of General Services on transitioning the hodgepodge of social service agencies operating at the Hill East site to new land.

Ketan Gada, who manages the project under Deputy Mayor for Planning and Economic Development Victor Hoskins, said Tuesday that the office has accepted a plan submitted by Donatelli Development and Blue Skye Construction to construct two mixed-use buildings on a two-acre plot close to the Stadium Armory Metro.

The Office of the Deputy Mayor for Planning and Economic Development is working with the DGS, the D.C. Department of Human Services and other agencies “to make sure they have a plan to consolidate their services,” Gada said. Stakeholders are hoping the first phase will be a “catalytic” step toward clearing other plots of the land and getting them ready for new construction.

Preliminary designs, months away from being finalized, would bring up to 40,000 square feet of new retail space, 222 parking spots, 354 residential units — 106 of which would be designated affordable housing — and a central plaza to the corner of 19th and C streets Southeast.

“Personally, I really try to go out of my way to put in restaurants,” Chris Donatelli, president of Donatelli Development, said of his vision for the retail space. “I think restaurants are the No. 1 thing that people would like to have access to in their neighborhood.”

Existing Donatelli properties house fast-casual joints such as Starbucks, Chipotle and Potbelly, in addition to sit-down restaurants including The Heights and Acre 121. Tenants also include banks, laundromats and Fed-Ex Kinkos.

“With space for 12 retailers, eight of those would probably be restaurants,” Donatelli said.

Gada delivered the news Tuesday at a roundtable meeting of the D.C. Council Committee on Economic Development, to the surprise of D.C. Councilmember Muriel Bowser, who chairs the panel. The update also surprised Flahaven, who has been leading his neighborhood’s press for development there, frequently questioning city officials and writing letters urging action.

“We’re really happy; we’ve been fighting to get this development going, so this is hopefully the first step in getting the whole site developed,” Flahaven said.

Revised Plans

His surprise was not based on the choice of developer. The Donatelli/Blue Skye plan was the only one submitted in the most recent request for proposals, and the ANC voted unanimously in favor of the design in June. It was the news that the office of the DMPED had moved forward on any proposal for Hill East development that came as a surprise.

Reservation 13 was first designated for public usage under the L’Enfant Plan for the District and ceded to the city under President George W. Bush.

Stakeholders have reviewed three rounds of designs from development teams interested in the site since the master plan was approved, and the city also had to hammer out zoning requirements for the land.

“Components of Hill East project make the decisions more complex, specifically the uses on the site including the prison, but they’re offset by benefits like the Metro,” said Jeff Miller, director of real estate for the DMPED’s office. “There’s also a requirement for a significant amount of affordable housing, which necessarily comes out of the value of the land.”

In 2008, when D.C. first put out a request for a master developer for the site, four teams responded. In 2010, the plan changed. Under Mayor Adrian Fenty, the office of the DMPED narrowed development into phases, focusing first on the two parcels nearest to the Metro.

“Given the economic meltdown and the changing financial times, there was not a single developer who would have undertaken the entire site in one go,” Gada explained. Two of the four teams responded to the revised request, and residents provided feedback.

In March 2012, Gray announced that the office of the DMPED would select one of the two plans, then scrapped the idea. Gada said lawyers had advised the city to restart the search because the scope of the project had been revised. He also noted that the two responders were seeking “significant subsidies” before starting construction, which the city was unwilling to provide.

The latest request for proposals was issued in October 2012, and by the Jan. 13, 2013, deadline, only Donatelli/Blue Skye had responded.

“Only one response on top of a Metro station is pretty hard to believe,” Bowser said Tuesday. The D.C. Council will eventually have to review any final plan giving the office of the DMPED permission to transfer the land to the developer, and Bowser, who is running for mayor, said she is “very reluctant” about moving forward with only one developer offering a plan. “Not only do you probably not get the best price, you may not even get the best ideas,” she said Tuesday.

Miller said the DMPED’s office always likes “to see multiple parties interested in our projects but sometimes, for various reasons that frankly we don’t always know, it doesn’t always work out that way.”

Flahaven had many more questions for the city on Tuesday: Is there a timeline for proceeding? Is the city seeking funding for infrastructure improvements, such as extending public roads and sewer lines? He also wants to see more progress on the homeless shelter.

“The current policy of housing up to 300 homeless families in a dilapidated, deteriorating old hospital building completely separated from the surrounding neighborhood is an embarrassment to the city and completely counterproductive to the ultimate goal of ending homelessness,” Flahaven said.

Bowser expressed similar concerns, saying ultimately, “if the government doesn’t have any timelines along the way, then that vision will never be realized. I think what’s best is that the community and councilmembers put together a task force and just follow it.”

Gada noted that the office of the DMPED has listened to concerns of the neighborhood and has incorporated suggestions and recommendations as the project has proceeded.

“I think this is a good first step, but there are many more steps to go,” Flahaven said. “We’ve made it to the point where they’ve actually made the decision to award the project, which is kind of where we were stalled for so many years. I think that’s a good start; hopefully we can move on from there.”