A D.C. Council bill that would give a permanent tax break to Union Station was all but squashed Monday as officials distanced themselves from a proposal that would cost the District an estimated $34 million.
After spending more than a year in committee, the bill appears headed for obscurity after Council Chairman Vincent Gray said he had doubts about the legislation.
The bill, proposed by Ward 2 Councilman Jack Evans, will be taken up Tuesday by the council’s Committee of the Whole, the body through which legislation is funneled. But Gray, the city’s likely mayor-to-be, said Monday he would not place it on the council’s legislative agenda, a move that kills the bill’s immediate future.
“He had concerns,” said Doxie A. McCoy, a spokeswoman for Gray. “He wants to have conversations with Councilmember Evans and conversations with the people who are involved.”
The Union Station bill could return to the legislative agenda next month but could be tabled entirely, she said.
Ward 6 Councilman Tommy Wells, whose name is also on the bill, said through his spokesman Charles Allen that he supports Gray’s decision. Allen said Wells does not agree with amendments made to the bill.
A spokesman for Evans did not return requests for comment.
The bill would throw out D.C.’s “possessory tax” on Union Station Redevelopment Corp., a tax levied on businesses that use federal property and otherwise would be exempt from property tax. About 40 percent of the District’s land is home to federally owned buildings.
The tax’s proponents say it evens the playing field for those leasing federal property –? that the Corner Bakery Cafe in Union Station should have to pay property taxes just like Ebenezers Coffee House one block away.
Allen said the District’s possessory tax had been partially successful in ensuring the city received compensation for its land. He said the original bill proposed a twice-a-year “payment in lieu of taxes” (PILOT) of roughly $253,000 by each vendor that would increase annually based on inflation.
“They basically rewrote the bill to say the PILOT would be front loaded between now and 2015 but after that they’d be tax exempt,” Allen said. “So that’s where you saw people get upset.”
Officials from Union Station Redevelopment did not return calls for comment.
According to the D.C. Office of the Chief Financial Officer, the proposal would mean an estimated loss to the city of $34 million over the next two decades.
