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Project Profile: Capitol Crossing / Third Street Tunnel

Capitol Crossing / Third Street Tunnel

photo credit: Property Group Partners


Washington D.C.

Project Sponsor / Borrower

District of Columbia, District Department of Transportation

Program Areas

Value Capture


Highway and Local Road


The Capitol Crossing project is a 2.2 million-square-foot development between E Street and Massachusetts Avenue and 2nd and 3rd Streets NW in Washington D.C. It consists of five mixed-use, LEED Platinum certified buildings: 200 Massachusetts, 250 Massachusetts, 200 F Street, 600 Second, and 201 F Street. The project will span seven acres and include retail, commercial, and residential uses. It is expected to create 8,000 permanent jobs when completed and will generate an estimated $40 million in annual property tax revenues.

The development site is made possible by construction of a platform over the eight-lane Center Leg Freeway portion of I-395 between E Street and Massachusetts Avenue and between 2nd and 3rd Streets. This portion of I-395 was built in an open boat section flanked by retaining walls that served as the terminus of I-395 in 1975. In 1987, the Center Leg Freeway was extended further north to New York Avenue in a tunnel section. When the final tunnel portion of I-395 opened, the air rights above the trench segment between E Street and Massachusetts Avenue were awarded by the city in 1988 to a real estate developer. However, those plans were ultimately abandoned due to the poor real estate market in the 1990s and disagreements between the developer and the District of Columbia.

Plans for decking over the site and developing the air rights above I-395 were revived in 2006 when Property Group Partners (PGP), then known as Louis Dreyfus Property Group, proposed purchasing (rather than leasing) the air rights based on the future value of the development that would take place. A deal between PGP and the city ultimately closed in 2012 and is expected to generate as much as $120 million in payments to the District of Columbia. The private partner also committed to paying for the cost of necessary utility relocations, the reconfiguration of access ramps to/from I-395 at 2nd and 3rd Streets, and restoration of the original street grid (F and G Streets) above I-395, per the original plan laid out by Pierre L'Enfant in the late 18th Century. The improvements will also include enhanced vehicular, pedestrian, and bicycle connections across I-395. Collectively, these transportation improvements are known as the 3rd Street Tunnel Project, which is sponsored by the District Department of Transportation.


$1.3 billion (complete Capitol Crossing real estate development including $270 million for the Third Street Tunnel project - local transportation improvements associated with I-395 access/egress and street grid restoration)

Funding Sources

Private funds - $270 million (Third Street Tunnel project)

Private funds - $1.03 billion or more (Capitol Crossing real estate development)

Project Delivery / Contract Method

Joint Development (Air Rights Sales)

Private Partner

Property Group Partners - Owner, Developer, Leasing Agent

  • Skidmore, Owings & Merrill - Master Planner
  • Balfour Beatty Construction DC - Construction Manager
Project Advisors / Consultants

Not available


Not applicable

Duration / Status

Utility relocation and site preparation began in April 2014.

Third Street Tunnel construction began in February 2015.

The first building at 200 Massachusetts Avenue will be complete in 2018.

The full development project is scheduled to be complete in December 2022.

Financial Status


  • Capitol Crossing will be built on a platform above a recessed section of I-395. To support the buildings, eight-foot footings were sent 100 feet into the ground. The platform will reconnect the surrounding Judiciary Square and East End neighborhoods and will provide new public space and commercial development parcels.
  • Opportunity for the District to reconnect the two long divided neighborhoods Capitol Hill & East End district by the construction of the I-395 in late 1960s.  Mending Washington, D.C.’s original street grid by creating three square blocks of real estate.
  • 100% private funded $1.6 billion by private investor and developer
  • Value capture Air Right Development strategy as an engine for economic development/redevelopment, sustainability, and livability for the local communities such as
    • Generate $40 million in annual new tax revenue to the district  
    • Create 8,000 permanent jobs and 4,000 temporary construction jobs.  More than 51% new jobs will be filled by the District residents.
    • Create a first-of-its-kind “ecodistrict” in DC, with all of its five buildings designed to qualify for a Leadership in Energy and Environmental Design platinum rating and to have green roof areas and a water capture and containment system.
Related Links / Articles

Capitol Crossing Project Website

Third Street Tunnel Project Website

Landscape Architecture Magazine Article - February 27, 2017


Terry Owens
Director of Communications
District Department of Transportation
Tel: (202) 763-8635

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