Have I got a deal for Mayor Vincent Gray! It would:
» Make the District’s government workers happy.
» Provide jobs for District residents.
» Plump up the tax base.
» Replenish the city’s fund balance that he and former Mayor Adrian Fenty spent down.
» Reassure Wall Street bond traders and rating agencies that D.C. is a good bet for necessary loans.
All Gray has to do is sell some valuable city property, bank the profits, and lock them away from grasping politicians. Can he pull it off? Does he have the gumption? The political will? Or the financial smarts?
Plans to sell off city property have been floating around for at least two years. D.C. Councilman Jack Evans, chairman of the finance and revenue committee, first suggested the city consider selling four buildings: One Judiciary Square; the Daly Building, police headquarters across the street on Indiana Avenue; the Recorder of Deeds facing the Daly Building, and the Reeves Center at 14th and U streets NW.
I would suggest selling other city-owned gems such as the Franklin School at 13th and K.
Evans, a lawyer steeped in the development and real estate business, floated his idea to city Chief Financial Officer Natwar Gandhi. He says he got a lukewarm reception, at first. The proposal idled.
City politicians kept spending — and spending. Fenty invested in the schools and parks. In the process, he dipped deeply into the city’s rainy day fund that once held $1.5 billion. Gray, then chairman of the council, approved Fenty’s spending and shares the consequences of drawing down the city’s savings.
One consequence was that Wall Street bankers howled when the city sapped its savings down to the current $890 million. The last time Gandhi visited Wall Street, rating agencies warned him that the depleted savings could lower the city’s coveted bond rating. Looking for ways to replenish the accounts, Gandhi took a fresh look at selling off city property.
Let’s get real: Selling the Reeves Center, Daly Building or the Recorder of Deeds would face major political problems. But One Judiciary Square should go on the block.
“We are at the top of the market,” says Evans. “We have been deferring maintenance, which the city can’t afford.”
One Judiciary Square sits right on top of the Metro, a short walk to Capitol Hill and the courthouses. Gandhi’s office estimates it could fetch $208 million. Evans says he’s heard it could bring $400 million. Let’s split the difference and say $300 million. Salting that away into savings would bring the fund balance back over $1 billion. City bureaucrats would get a new building. Cranes would get busy. The new owner would pay taxes.
When Gandhi proposed the sales to Gray, the mayor balked, according to sources. No surprise. City Administrator Allen Lew liked it. No surprise.
Perhaps it’s time for Gray to surprise everyone and make a bold move.
Harry Jaffe’s column appears on Tuesday and Friday. He can be contacted at [email protected].
