ARLINGTON, Va.--(BUSINESS WIRE)--EJF Capital LLC (“EJF”), Donatelli Development (“Donatelli”) and Blue Skye Development today announced the development of a 262-unit mixed-use, mixed-income, multifamily community in the Hill East neighborhood of Southeast Washington, D.C. Hill East is a 67-acre master planned development in an area certified as an “Opportunity Zone” under the Tax Cuts and Jobs Act of 2017 (“TCJA”) which offers investors attractive tax benefits to create economic growth. The approximately $95 million project is under construction and is expected to be completed in August 2020. Eagle Bank is providing $59.5 million of construction financing.
Located adjacent to the Stadium-Armory Metro station at the corner of 19th Street and Massachusetts Avenue S.E., the project is only 1.6 miles east of the U.S. Capitol and offers easy access to major employment areas throughout Capitol Hill and downtown Washington D.C. The project will also offer 13,000 square feet of retail.
“We are thrilled to partner with Donatelli Development on this project. Hill East is a major Opportunity Zone development that will transform the area just east of Capitol Hill and west of the Anacostia River,” said EJF Co-founder and Chief Operating Officer, Neal Wilson. “This anchor project will make a major contribution to the neighborhood by adding hundreds of construction jobs and creating the momentum necessary for the successful long-term growth of the Hill East neighborhood.”
Asheel Shah, EJF’s Senior Managing Director and Head of Real Estate Development, praised the D.C. government for the foresight of setting the Hill East development in motion. “Mayor Bowser, her team, and City Council are executing on a vision for an area that brims with potential,” he said. “We see tremendous possibilities for Hill East, and we believe that in a short time the community will become a vibrant neighborhood and viable housing extension of the Capitol Hill neighborhood. We look forward to making meaningful contributions and being a long-term member of this community.”
Christopher Donatelli, President and CEO of Donatelli Development, said, “We are very pleased to partner with EJF, a company that shares our vision and passion for high quality neighborhood development. EJF’s deep knowledge of real estate development and of the Opportunity Zone program will prove to make a great long term partner for us.”
The Washington, D.C. Metropolitan Statistical Area has strong economic underpinnings and ranks as the fifth largest GDP in the nation at $535 billion, the fifth largest employment market with 3.35 million jobs, and the third highest median household income in the U.S. at $99,700. Over the past decade roughly 105,000 people have moved into the District, attracted by walkable neighborhoods connected by Metro, burgeoning restaurant and retail, and world-class entertainment and sports.
The Hill East neighborhood is planned to offer a robust set of recreational amenities, which include a series of parks, plazas, pathways and open spaces connecting Capitol Hill to the Anacostia River. These vibrant spaces encourage community interaction and passive and active recreation, and will be attractive to people of all ages who will appreciate its convenience to Capitol Hill, downtown Washington D.C., colleges and universities, restaurants and entertainment.
“By offering convenient and affordable housing as part of the Hill East project we are embracing the community as it exists today,” Wilson said. “We have repeatedly witnessed displacement of low-income individuals being pushed away from city centers and believe the revitalization of a once-distressed community should not permanently displace multi-generational residents and workers by being priced out of their neighborhood. Hill East will enable low-income individuals to live, work and study in the heart of the District.”
About EJF Capital
EJF Capital LLC is a global alternative asset management firm headquartered outside of Washington, D.C. As of March 31, 2019, EJF manages approximately $7.5 billion across a diverse group of alternative asset strategies. The firm was founded in 2005 by Manny Friedman and Neal Wilson.
Since inception, EJF has focused on regulatory event-driven investment themes including its newly formed strategy to invest in Opportunity Zones. In 2018, EJF hired Asheel Shah, former President and Chief Investment Officer of the multifamily division at Kettler Inc., a diversified real estate development company based in McLean, Va., to head the Opportunity Zone investment strategy. Mr. Shah brings with him over 20 years of experience in the real estate industry focused on development, acquisitions, asset management, construction and equity capital sourcing.
EJF is quickly building a track record of providing equity capital to development projects in Opportunity Zones across the country. EJF is developing Marriott International’s new Moxy Hotel in Oakland, California and has purchased 510 acres in western Jasper County, South Carolina, to develop a multi-phased industrial park that will serve the Port of Savannah.
Donatelli Development is recognized as a pioneer in large-scale multifamily projects in emerging neighborhoods throughout the District. Donatelli has revitalized neighborhoods and introduced housing and retail to traditionally underserved communities. The company has delivered more than 4,400 multifamily units focusing on mixed-use, transit-oriented projects adjacent to Metro stations in neighborhoods across the city. Donatelli has received multiple accolades from the Urban Land Institute, and the National Association of Home Builders for community impact and design.
EJF OpZone Fund I
EJF formed the EJF OpZone Fund I LP (the “Fund”) to take advantage of certain benefits provided by the TCJA. Benefits to U.S. taxable investors include the ability for investors to (1) defer recognizing recent capital gains for federal income tax purposes until 2026 (treatment of state capital gains varies by state), (2) reduce the amount of capital gains recognized in 2026 by 15% (for investors investing in 2019), and (3) eliminate any federal capital gains tax generated from investments in the Fund (for investments held in the Fund for ten years). EJF is targeting a capital raise of $300 million to $500 million for the Fund and EJF partners have made a substantial investment in the Fund.
If you would like more information on the EJF OpZone Fund I LP, please contact EJF Investor Relations at firstname.lastname@example.org.