The End of Broadcast Center One?

What happens when a lease is signed by an anchor tenant, helping to prosper one of the District’s largest developments, but the lessee’s stock plummets to an all-time low? Well, I don’t have an answer for your right now but lets examine the situation.

In January of 2008 a lease was signed between Radio One Inc for the use of Broadcast Center One in a partnership with Ellis Development. At the time, Radio One Inc’s stock price (NASDAQ: ROIAK) was a respectful $2.36. Today, however the stock price is at $.14 (yes 14 cents), which equates to about a 93% loss in less than 11 months. Could this be the end of Cathy Hughes Radio One & TV One empire? I wouldn’t expect so - but this could mean the $23 million the city is funding to help the $127 million construction may be in question right now and this may the culprit for the 12+month delay (at best) in ground-breaking.

Broadcast Center One Moves Forward, $23 Million Awarded to Development

This week marks a historic period for the Shaw neighborhood as the city council approved a $23 million budget for Radio One’s new headquarters, Broadcast Center One. The former Wonderbread Factory, owned by Douglas Jemal, will soon be transformed into the entertainment district of the city. The approved plans call for 103,000 square feet of office space, 25,000 square feet of retail, 180 rental apartments and 195 underground parking spots. According to the Washington Business Journal ” D.C. Mayor Adrian Fenty reached the deal with developers Four Points, Ellis Development Company and the Jarvis Company.”

While the deal seems like nothing but an opportunity for the community, Radio One’s profits for the third quarter of 2007 fell 40%, hardly a monument worth celebrating. So while the recent budget approval is great news, who knows if Radio One will be able to commit once the project is finished.

Radio-One Profits Fall 40%

In an article released by the Washington Business Journal, Cathy Hughes, owner of the Radio One empire of 50+ radio stations may have already seen its best days.

The cause? An ever increasingly competitive listening audience may just not be tuning that dial to radio anymore, or as they put it “a challenging radio industry environment.” I for one haven’t listened to the radio in years. Between the music hard drive I have in my car to streaming music from Pandora or Musicovery to my laptop and bluetoothing it to the car, radio may just be a medium of the past.

Who cares!

Well, Cathy Hughes already signed a lease for Broadcast Center One at 7th & S Sts NW, that half-acre former Wonder Bread factory thats about to break ground next year. With profits down nearly 40% in one quarter, who knows what the future may hold for the lease-holder of Douglas Jemals property.

Broadcast Center One Begins

This past week DC approved the application for Broadcast Center One, located at the intersection of 7th & S streets NW, just around the corner from the historic Howard Theater.

Douglas Jemal, the famed developer known for transforming this city, is the owner of the site for Broadcast Center One. The site, which was purchased for over $21 Million several years ago, is currently the vacant Wonderbread Factory and an eye soar.

The lot itself is just larger than half an acre but the development will be going through a Planned Unit Development (PUD) process to allow for increased density and possibly height than the current zoning allows.

According to the National Capital Revitalization Corporation (NCRC) the new development will have 21,000 square feet of retail space with 202 residential units, over 76,000 square feet of commercial space, and 250 underground parking spaces. In addition, the city is requiring a portion of the retail and residential to be affordable.

As per the NCRC, the development must have 10 percent affordable retail and 25 percent affordable housing. This housing must be five percent lower than the recently imposed 30 percent requirement imposed by DC Mayor Fenty several months ago.

The proposed expected completion was 2010 based on breaking ground earlier this year so I would expect the closeout closer to 2011. Radio One, under the guidance of founder Cathy Hughes, has already signed a letter of intent to occupy the new development. Hughes was noted for mentioning her long awaited return to the roots of her company in DC and Broadcast Center One should provide the perfect place for her to do so.

With the revitalization of Shaw and the development at the McMillan Reservoir, the area will be a completely different neighborhood within three years. It’s going to be absolutely amazing.