Renderings of the 10th and K Entertainment Project.
With a 45% ground floor vacancy rate, K Street’s health is currently
struggling. These spaces have been vacant more than eight years and have
seen several projects – all proposed with subsidies - come and go. Currently
David Taylor Interests (DSTI) and the CIM Group (CIM) have proposed the
following K Street Entertainment Project:
• 1016 K Street: This 3,000 sq ft parcel will feature Dive Bar, a trendy play
on a vintage dive bar. Dive Bar will feature an iPod jukebox with a selection
of many musical genres.
• 1020 K Street: This 5,600 sq ft parcel will feature Pizza Rock, a high-end
pizza restaurant. The restaurant will feature pizza acrobatics and trained
pizza artisans.
• 1022 K Street: This 4,300 sq ft parcel will feature Frisky Rhythm, an
upscale nightclub targeted to an audience ages 30 and up.
• 1012 K Street: This 12,000 sq ft parcel will undergo building shell and core
renovations. No tenant has been identified yet.
Financing: The total budget for this project is $11.8 million including tenant
and developer investment as well as proposed public investment.*
Investment in 1016, 1020, 1022 K Street
Public Investment $3.4 million
Private Developer $3.4 million
Tenant $1.7 million
TOTAL $8.5 million
Est. investment in 1012 K Street
Public Investment $2.0 million
Private Developer $0.24 million
Tenant $1.1 million
TOTAL $3.3 million
Total Public Investment $5.4 million
Total Private Developer $3.6 million
Total Tenant $2.8 million
TOTAL $11.8 million
* The public investment is derived from proceeds of the Sheraton sale in 200.
Under the sale terms, half of the transaction proceeds would be available for
DSTI/CIM projects in the JKL Corridor with City Council approval.
Major upgrades will need to be made to make the parcels market ready.
Hazardous waste issues, seismic retrofit and utility upgrades, and antiquated
infrastructure are just a few of the significant costs present in most
K Street projects. Additionally, the tenants will be paying market rate rent
and thus not undercutting existing businesses by offering subsidized
mortgage rates. Tentative target delivery date is late 2009.