Live simply so that others may simply live. – Mahatma Gandhi
Dec. 21, in a 9-3 vote, the D.C. Council passed emergency legislation providing $46 million in tax abatements for the construction of a 5-star luxury boutique hotel in the multicultural and economically diverse neighborhood of Adams Morgan in Northwest D.C. The recipient of the District’s largess is 32-year-old developer Brian Friedman and his financial backers (his family). Friedman sees nothing wrong with requesting governmental assistance for a luxury hotel at a time when the District is cutting basic services. He said, “[This project is] like any other hotel built in this city… There’s always a subsidy.”
Ward 3 Councilmember Mary Cheh postponed surgery on her broken arm in order to attend the Dec. 21 legislative session. She questioned why the District is using tax abatements for “this project and not some other projects?” Cheh continued, “We have to start thinking a little differently in this District. It may be that we’re so much attuned to the idea that nobody goes forward in this District unless we give them money, that we have lost sight of the fact that this is still an attractive place to be and [there] are good financial opportunities and good business deals out there. And so maybe we shouldn’t be so quick to just give away our money.”
At large Councilmember Phil Mendelson said it was “inappropriate” for public money to be used “to enable a private developer to move up.” The argument that the project will yield revenue in the future did not sway Mendelson. “You could say that about every project. So maybe we shouldn’t have taxes on any project, which I think is really the logic behind this.” Mendelson said that to vote in favor of this tax expenditure “is to say that a 5-star hotel in Adams Morgan, that so far is pretty much just a few sketches on paper, is a higher priority than the grandparent subsidy or TANF or other social service programs that we are cutting.”
Surprisingly, the District’s leading budget watchdog group, DC Fiscal Policy Institute, offered no strong opposition to the abatement. DCFPI said the deal offered some “good news” because “the proposal ultimately passed by the Council differed significantly from the initial proposal in several key ways… First, overall cost of the tax break was reduced from $61 million over 15 years to $46 million over 20 years… Second, the Council tied a number of specific community benefits to the tax break and the legislation denies the tax break to the developer if they are not met.”
At large Councilmember David Catania described the developer’s promises of community benefits as “a sucker’s list.” Catania said, “I’m not going to vote for something that I know will not happen. I know 100 percent of the apprenticeships will not be District residents. I know that. I know that 51 percent of the construction jobs won’t be District residents. I know that. I’ve been here a long time. I’ve seen these sucker lists before.”
Catania decried the cronyism. “‘If you know somebody, you get a $46 million parachute and if you don’t, you don’t. That is not the way to run economic development… 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. That is a false choice.”