MURIEL BOWSER
MAYOR
July 10, 2020
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Avenue, N.W.
Suite 504
Washington, D.C. 20004
Dear Chairman Mendelson:
Please find enclosed for consideration and approval by the Councilofthe District of Columbia
(the Council), pursuant to 451ofthe District of Columbia Home Rule Act, a proposed In-
Lease Agreement by and between the District of Columbia and Cedar-Senator Square, LLC,
a Delaware limited liability company, for 239,800 rentable square feetofoffice space to be
located at 3924 Minnesota Avenue, NE in Washington, DC. The leased premises would be
occupied by the Department of General Services.
T urge the Council to take prompt and favorable action on this proposed contract. If you have
any questions, please contact Keith A. Anderson, Director, Department of General Services, at
(202) 727-2800.
Sincerely,
Miriel BYwser
Enclosures
GOVERNMENT OF THE DISTRICT OF COLUMBIA
DEPARTMENT OF GENERAL SERVICES
COUNCIL REAL ESTATE CONTRACT SUMMARY
June 29, 2020
Please note that any capitalized term used but not defined in this Summary shall have the meaning
given to such term in the proposed real estate contract.
1. The name of the proposed lessor, lessee, grantor or other party to the proposed real estate
contract, the type of real estate contract, the source selection method, the primary term
of the real estate contract (if applicable), and the consideration to be paid by the District
(for leases, the total annual rent for the first year and the fiscal years set forth in the
Funding Certification):
Contract Party Name: Cedar-Senator Square, LLC, a Delaware limited
liability company
Type of Real Estate Contract: In-Lease Agreement (District is a sub-tenant, as
Landlord has a ground lease interest in the subject
real property)
Location of Real Property: 3924 Minnesota Avenue NE
Source Selection Method: Competitive
Primary Term (if applicable): 20 years and 10 months
Consideration to be paid by District (if applicable):
- First Lease Year: $13,531,914.00
- Certificate of Funding Amounts:
Fiscal Year 2020: $0
2. If the real estate contract is a lease, a breakdown of the Annual Rental for the first Lease
Year set forth above, the scheduled escalations thereof and known first Lease Year
Additional Rent obligations (e.g., parking and supplemental HVAC costs):
Components of $/RSF Total Amount for Annual Escalations after First
Annual Rental First Lease Year Lease Year
Net Rental $22.52 $5,400,296.00 2.5%
Initial Operating $8.60 $2,062,280.00 CPI-based
Costs
Initial Real $11.22 $2,690,556.00 Based on actual increases in Real
Estate Taxes Estate Taxes
_________________________________________________________________________________________________
2000 14th Street, NW, 8th Floor, Washington, DC 20009 Telephone (202) 727-2800 Fax (202) 727-7283
1
Tenant $14.09 $3,378,782.00 N/A
Improvements
Allowance
Amortization
Total Annual $56.43 $13,531,914.00 N/A
Rental
Known Additional Rent Obligations for First Lease Year
Parking (150 $150 /month per $270,000 total 2.5% annual escalation
fleet parking space
spaces)
MDF ROOM $15.00 / RSF $4,500.00 2.75% annual escalation
(300 RSF)
Overtime HVAC $50.00 per hour per Total for first Lease 2.5% annual escalation
Costs half-floor Year will depend
on usage
3. If the real estate contract is a lease, a description of any options to renew the primary
lease term set forth above, the contract amount for the primary lease term and each
option period (and an explanation of any difference), and a description of any options to
purchase the real property:
The Lease does not include any option to renew the primary lease term. The District has a
right of first offer to purchase the Building if Landlord acquires the fee interest in the Building
during the term of the Lease.
4. A description of the real property to be acquired, developed or leased, including any
applicable improvements:
Street Address: 3924 Minnesota Ave, NE
Square/Lot Number: A portion of 5044 / 0812
Total RSF of Building: 260,000 RSF
Total RSF of Premises: 239,800 RSF
Description of Improvements: A to-be-constructed building of 260,000 RSF located on
approximately 80,740 square feet of land. The Department of General Services (DGS),
will occupy 239,800 RSF of the office space within the Building. The District will also
have access to 150 parking spaces for government use during the Lease Term (150
additional spaces are being made available for employee use, at no cost or expense to the
District under the Lease).
5. A description of the Districts specific real property need associated with the proposed
real estate contract and the selection process, including the number of offerors, the
evaluation criteria, and the evaluation results, including price, technical or quality, and
past performance components:
2
A Request for Space (RFS) was issued on September 5, 2019 to building and land owners
in all submarkets of the District of Columbia capable of satisfying a 175,000 to 225,000 RSF
office space requirement, with a strong preference given to options east of the Anacostia River.
DGS received seven (7) proposals in response to the RFS. The offers were evaluated by an
evaluation panel comprised of DGS personnel and members of Savills, Inc. (a contractor and
real estate consultant to DGS). The evaluation committee modeled the financial terms
proposed by each of the offerors and compared the qualitative aspects of each of the proposed
options based upon the criteria set forth in the RFS. The evaluation panel created a short list
of five (5) properties based on the results of the financial and qualitative analysis, which was
scored using weighted criteria specifically designed for this requirement. The short list
properties were toured by the evaluation panel (presentations were provided at Savills office
for options that required new construction). Based on the tour and presentation of the five
options, DGS selected the 3924 Minnesota Avenue NE option, subject to further due diligence
and negotiation of a Letter of Intent. The final decision to select 3924 Minnesota Avenue NE
was made once DGS was satisfied with the economic and legal terms negotiated in the Letter
of Intent, and the project delivery dates of the building and premises.
3924 Minnesota Avenue NE offers a newly constructed, modern office building that will have
state-of-the-art mechanical systems, Energy Star rated building methods, a new fitness center,
and a rooftop terrace. The new building provides an opportunity for DGS to design its
workplace to best suit the needs of the agency.
This relocation provides DGS with the opportunity to:
o Improve work place efficiencies;
o Improve operational adjacencies and work flow; and,
o Conform space to new District work standards.
In addition to these operational benefits for DGS, this new development project will serve as
a catalyst for economic development in an underdeveloped and underserved part of the District
east of the Anacostia River.
6. The background and qualifications of the proposed contract party, including its
organization, financial stability, personnel, and performance on past or current real
estate contracts with requirements similar to those of the proposed contract:
Cedar-Senator Square, LLC, is a Delaware limited liability company. This is the first real
estate contract this company will have entered into with the District. However, the parent of
this entity is Cedar Realty Trust, which has leasing experience with the District through another
affiliated entity (i.e., a lease for an OCTO data center), whose performance is satisfactory.
Landlord has no employees.
7. Expected outcomes of the proposed real estate contract:
The execution of the proposed real estate contract is expected to result in the occupancy by
DGS of the subject space for 20 Lease Years and 10 months.
3
8. A statement that suitable space owned by the District is not available or cannot be
reasonably renovated or altered:
Based upon an evaluation of space owned by the District, there is no suitable space owned by
the District, either as-is or which can reasonably be renovated or altered, which would meet
the needs of the District under the proposed real estate contract.
9. ANC notice of the proposed real estate contract:
DGS provided written notice, dated May 12, 2020, to ANC7F, and Councilmember Vincent
Gray, regarding the proposed real estate contract, as required by applicable law. The notice
provides the ANC with an opportunity to provide written recommendations regarding the
proposed contract. Pursuant to applicable law, DGS will give great weight to the issues and
concerns raised in any ANC recommendations and provide a written response to the ANC
addressing those issues and concerns.
10. A certification that the proposed real estate contract is within the appropriated budget
authority for the agency for the fiscal year and is consistent with the financial plan and
budget adopted in accordance with 47-392.01 and 47-392.02:
The Office of the Chief Financial Officer has certified the availability of funds for the proposed
real estate contract. Please see the attached Funding Certification.
11. A certification that the proposed real estate contract is legally sufficient:
The Office of the General Counsel for the Department of General Services has certified that
the proposed real estate contract is legally sufficient. Please see the attached Legal Sufficiency
Certification.
12. A certification as to whether the proposed contract party has any currently pending legal
claims against the District:
According to the Districts Office of the Attorney General and based upon a certification from
Landlord, Landlord does not have any legal claims currently pending against the District.
13. A certification that the Citywide Clean Hands database indicates that the proposed
contract party is current with its District taxes:
The proposed contract party is a disregarded entity for tax purposes. The parent of the
proposed contract party, Cedar Realty Trust, Inc., is current with its District of Columbia taxes.
Please see the attached Citywide Clean Hands certificate.
14. A certification from the proposed contract party that it is current with its federal taxes,
or has worked out and is current with a payment schedule approved by the federal
government:
4
Based upon a certification from Landlord, Landlord is current with its federal taxes, or has
worked out and is current with a payment schedule approved by the federal government.
15. The status of the proposed contract party as a certified local, small, or disadvantaged
business enterprise, as defined in subchapter IX-A of Chapter 2 of title 2-218.01 et seq.:
The proposed contract party is not a certified local, small or disadvantaged business enterprise.
5
* Government ofthe District ofColumbia
*
*
(mmm _fliceof the ChiefFinancial Officer 1101 4"Street, SW
Hmm Office ofTax and Revenue Washington, DC 20024
Date of Notice: June 25, 2020 Notice Number: 10004164083
CEDAR REALTY TRUST, INC. FEIN: **-**1468
44S BAYLES AVE Case ID: 507929
PORT WASHINGTON NY 11050-3767
CERTIFICATE
OFCLEANHANDS:
As reported in the Clean Hands system, the above referenced individual/entity has no outstanding
liability with the District of Columbia Office of Tax and Revenue or the Department of Employment
Services. Asofthe date above, the individual/entity has complied with DC Code 47-2862, therefore
this Certificate of Clean Hands is issued.
TITLE 47. TAXATION, LICENSING, PERMITS, ASSESSMENTS, AND FEES
CHAPTER 28 GENERAL LICENSE
SUBCHAPTER II. CLEAN HANDS BEFORE RECEIVING A LICENSE OR PERMIT
D.C. CODE 47-2862 (2006)
47-2862 PROHIBITION AGAINST ISSUANCE OF LICENSE OR PERMIT
Authorized By Mare Aronin
Chief, Collection Division
To validate this certificate, please visit MyTax.DC.gov. On the MyTax homepage, click Clean Hands
and then the Validate a Certificate ofClean Hands hyperlink.
1101 Ath Street SW, Suite W270, Washington, DC 20024/Phone: (202) 724-S045/MyTax.DC.gov
GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE CHIEF FINANCIAL OFFICER
GOVERNMENT OPERATIONS CLUSTER
OFFICE OF FINANCE & RESOURCE MANAGEMENT
Antoinette Hudson Beckham Angelique Rice
Agency Fiscal Officer Associate Chief Financial Officer
Date: June 30, 2020
Agency Budget: Department of General Services (AM0)
Occupying Agency: Department of General Services (AM0)
Funds Needed: $0.00
Purpose: $0.00 funds are needed in FY20 for a new lease for DC Department of General
Services new headquarters to be located at 3924 Minnesota Ave, NE Washington,
DC (Ward 7). DC Department of General Services will lease 239,800 rentable
square feet in the new (to be constructed), office building. Funding for FY23 in
the amount of $13,806,414.00 is subject to an approval in the Districts Budget and
Financial Plan.
Cost of Obligation FY 20 $0.00
Cost of Obligation FY 21 $0.00
Cost of Obligation FY 22 $0.00
Cost of Obligation FY 23 $13,806,414.00
Lease Term: 20 years 10 months
_________________________ 06.30.2020
_______________________
Antoinette Hudson Beckham Date
Cc: Angelique Rice, Associate Chief Financial Officer, GOC
441 4th Street, NW Suite 890 North - Washington, DC 20001
GOVERNMENT OF THE DISTRICT OF COLUMBIA
DEPARTMENT OF GENERAL SERVICES
a bcs
=
Office of the General Counsel
MEMORAND!
TO: Ronan Gulstone
Director, Office of Policy and Legislative Affairs
THROUGH: Xavier Beltran
General Counsel, Departmentof General Services
FROM: Katherine L. Jough KLJ
Senior Assistant General Counsel, Department of General Services
SUBJECT: Legal Sufficiency Certification for Proposed In-Lease Agreement by and
between the District and Cedar-Senator Square, LLC, a Delaware limited
liability company, for premises to be located at 3924 Minnesota Avenue, NE
in Washington, DC (the Lease)
DATE: June 29, 2029
This is to certify that this Office has reviewed the above- and that we have found
it to be legally sufficient, subject to the submissionof any required materials and Council approval.
If you have any questions, please do not hesitate to contact me at (202) 727-2800.
z; cE; a8
Senior Assistant General Counsel
Department of General Services
EXECUTION VERSION
D.C. DEPARTMENT OF GENERAL SERVICES
IN-LEASE AGREEMENT 1. LEASE NO. ____________
AWARD OF IN-LEASE (L-100)
2. BUILDING NAME AND ADDRESS (No., street, city, state, and zip code)
3924 Minnesota Avenue NE
Washington, DC 20019
3. Your offer is hereby accepted. THIS AWARD CONSUMMATES THE LEASE WHICH CONSISTS OF THE FOLLOWING DOCUMENTS:
(a) this DC DGS Form L-100 (Award of In-Lease),
(b) DC DGS Form L-102 (Accepted Proposal to Lease Space),
(c) DC DGS Form L-105 (In-Lease Agreement Definitions and Standard
Clauses and Provisions),
(d) Exhibit A (Depiction of Premises),
(e) Exhibit B (Legal Description of Land),
(f) Exhibit C (Work Exhibit for Base Building Work and
Tenant Improvements),
(g) Exhibit D (Form of Declaration of Delivery),
(h) Exhibit E (Rent Schedule of Net Rental),
(i) Exhibit F (Form of SNDA),
(j) Exhibit G (Form of Tenant Estoppel Certificate),
(k) Exhibit H (Form of Declaration of Final Accounting),
(l) Exhibit I (Janitorial Specifications,
(m) Exhibit J (Depiction of Additional Parking Areas),
(n) Exhibit K (Development Area), and
(o) Exhibit L (Form of Sublease Recognition Agreement).
(collectively, this Lease)
In the event of conflict, the order of priority between the documents comprising this Lease shall be in
the order above, unless otherwise specifically set forth in this Lease.
4a. LANDLORD'S NOTICE AND PAYMENT ADDRESS:
Notice Address:
Cedar-Senator Square, LLC
c/o Cedar Realty Trust
44 South Bayles Avenue
Port Washington, NY 11050
Attention: Robin McBride Ziegler, Chief Operating Officer
Phone: 516-767-6492
Email address: rzeigler@cdrrt.com
With a copy to:
Cedar-Senator Square, LLC
c/o Cedar Realty Trust
PAGE 1 OF 135
3924 Minnesota Avenue NE (as modified) DC DGS FORM L-100 (3/2018)
US 167835565v6
EXECUTION VERSION
44 South Bayles Avenue
Port Washington, NY 11050
Attention: Adina G. Storch, General Counsel
Phone: 516-944-4583
Email address: astorch@cdrrt.com
Payment Address or Wire/EFT Instructions:
Cedar-Senator Square, LLC