The city council is very generous with our cash. Case in point: the $46 million the council agreed to give up in tax abatements to the developers who propose a luxury hotel in Adams Morgan. For 20 years, the hotel owners will not have to pay a dime in real estate taxes.
How do I get that?
By crying broke and threatening to walk away like developer Brian Friedman. He kept pleading that he couldn’t line up financing for his swanky hotel, which he says will have 174 rooms, a pool, restaurant and health club.
“There’s no alternative plan,” Ward 1 Councilman Jim Graham pleaded. “There’s no other project waiting in the wings to assume this.”
That’s assuming, Jimbo, that no other developer will come forward in the next year or two to build an apartment building at the corner of Euclid and 17th Streets, a block off of Adams Morgan’s main corridors. Or another developer with deeper pockets would not be able to finance a hotel without a handout from D.C. tax payers.
If financing development deals is akin to playing poker, the District just flinched and lost our tax money.
“This is $46 million to a private developer where we are being asked with a gun to our head to take it or leave it or an apocalypse happens,” at-large Councilman David Catania said of the deal. “It is a false choice.
Since Graham and his compatriots are blowing my cash, I get to weigh in and say: Stiffen your backs, boys and girls! Quit playing the supplicant to developers, as if we are the poor cousins in the Washington region. The nation’s capital is jammed with hot property. Demand is strong and will get stronger. Make developers compete and pay full freight.
The city council is all about giving tax breaks, and each one costs us, though the council rarely pins on a price tag. The Office of Chief Financial Officer tallies the cost of each abatement. Check them out on its Web site.
Churches and nonprofits benefit from most. Israel Baptist Church got an abatement of $875,574 over four years to build senior housing. Central Union Mission got a $507,715 exemption in property taxes. Manna Inc., which builds affordable housing, got a $104,210 break in real estate fees.
But these are chump change — and quite defensible — compared to the millions the council gives up to developers. You will not see it in this year’s legislative record, but a Tax Increment Financing package for $250 million just became available to developers of the convention center hotel. TIFs are subsidies to encourage developers to build in blighted areas. They are “betting on the come” that tax breaks now will be worth tax revenues in the future.
Perhaps. But why do Marriott, a global cartel, and its development partners need our tax dollars?
How about the D.C. council makes a New Year’s Resolution: no more handouts to developers. Tell them to let the free market rule; time to pay up!
Harry Jaffe’s column appears on Tuesday and Friday. He can be contacted at [email protected].
