Show & Tell

Billed to Suit? This years supersized tax assessments have put arts spaces in a tight spot.

Paul and Molly Ruppert
Photograph by Pilar Vergara

On April 26, artist Adrian Parsons circumcised himself [NSFW video] in front of an audience at the Warehouse on 7th Street NW. It was an on-the-fly performance in more ways than one.

For months, Parsons had planned to present a video installation involving motor oil as part of a group show at the Space, 903 N St. NW. But a few days before the opening, the show’s curator announced it was canceled, citing conflicts with the Space’s owners. Then the Warehouse came to the rescue and offered the group two galleries for the show. Parsons’ motor oil installation wouldn’t work anymore, so he decided to improvise, and circumcise. (He’s fine, by the way, despite doing the job with a Swiss Army knife and getting 22 stitches.)

For more than a decade, the arts complex in the shadow of the Washington Convention Center has been a reliable home for artists, edgy and not. Now its days might be numbered.

The problem? The latest tax bill.

In an e-mail distributed to “friends and supporters” on April 23, Molly and Paul Ruppert, the mother-and-son owners of the Warehouse complex, wrote: “Bad news in the mail last month—Warehouse property taxes for next year are increasing over 500%. Needless to say, this is a huge blow to our precarious business model. What does this mean for the Warehouse? We’re not sure. We have begun the appeal process. We are committed to maintaining our current operations through the Fringe Festival in July. It is possible that we will be able to operate into the fall and beyond. We are considering a move of all or part of the Warehouse to another location.”

For tax year 2007, the total assessment for the Warehouse’s three properties was about $1.9 million. For 2008 the assessment is more than $8.9 million. The steep increase in property values didn’t come as a complete surprise, Paul Ruppert says. He notes there’s recently been a number of “high-priced sales in the neighborhood.” Instead, the taxes, which are based on property values, “are just part of all the pressures we face.” For a while now, the Rupperts have wondered whether the 7th Street location is the best place for the arts complex, which includes two black box theaters, a gallery devoted to emerging artists, a music venue, a screening room, and a cafe. The neighborhood may not be “ideal for the edgy art we specialize in,” Paul Ruppert says. “All options are open.”

One option is to relocate the complex, either as a whole or in pieces, he says, and rent out the space. Ruppert family members own the property, and the Warehouse is a tenant. Because both are privately owned, neither receives the property-tax relief available to nonprofits. If they did turn the Warehouse into a nonprofit, he says, they would probably do so for the theater only. The music venue would likely remain a private entity, which they might move to 14th Street or U Street. The art galleries would follow the music, Molly Ruppert says.

They could also sell the building, which Paul Ruppert calls “a real possibility.”

But leaving 7th Street would be a significant shift for the family, which has owned the property since the 1880s. Ruppert Hardware operated at 1021 7th St. NW until 1987. Molly and Paul opened Rupperts Restaurant at 1017 7th St. NW in 1992. The restaurant closed in 2002, but by then, the mother-son duo had expanded their enterprise to include parties featuring local artists and plays in two theaters. The Warehouse cafe opened in 2003. Molly handles the visual-arts side of the Warehouse, while Paul oversees theater and music. The three elements “all kind of feed off each other,” he says. “There’s this big cauldron of people mixing together.”

Still, Paul Ruppert says, the Warehouse loses money every year. Local theater companies who use the Warehouse—including Gala Hispanic Theatre, Scena Theatre, Solas Nua, Woolly Mammoth Theater Company, and Signature Theatre—pay $1,400 per week for the larger theater space and get 100 percent of ticket sales. That’s not enough for Warehouse to turn a profit, Paul Ruppert says, but he’s not about to raise the rent. The money that keeps the Warehouse afloat, he says, comes from the “personal savings of my mother and myself.”

Income isn’t the last thing on the Rupperts’ minds. When the convention center arrived on their block in 2003, they extended the cafe’s hours and handed out fliers in hopes of enticing sleepy-eyed conventioneers with coffee. It didn’t work. Paul Ruppert quickly learned that “the convention center wants to keep people inside.” Then there’s the rapid revitalization of the Warehouse’s surroundings in Gallery Place and Shaw, which have pushed up property taxes. “Usually, the property values are assessed by the value of the sales activity around the property,” says Maryann Young, spokesperson for D.C.’s Office of the Chief Financial Officer. “It’s not just the surrounding sales [that determine property values], but they do have an impact. We are required to assess properties at market value. This is happening to a lot of folks, a lot of business owners in the District.”

Another tax-hike hotspot is H Street NE. Adele Robey, who owns H Street Playhouse at 1365 H St. NE with her husband, Bruce, says they’ve watched property taxes quadruple since they bought the building five years ago. For now, Robey says, the couple is shielding their tenant, Theater Alliance, from the tax increase. “We’re eating it. We just refinanced something that we own personally,” she says. They’d prefer not to sell the building. After all, “I can’t guarantee that whoever buys it would keep it as a theater,” she says.

Dante Ferrando, owner of the Black Cat, is also feeling the pinch. His property taxes have gone up “astronomically” over the last couple of years, he says. “It’s been getting frightfully close to $200 a day.” Ferrando says he is “currently paying in real-estate taxes roughly what I used to pay in rent at the Black Cat 10 years ago.” He says rising property taxes are especially hard for older businesses, which have to adjust their business plans to reflect new costs.

Every year, Ferrando fights his property tax assessment through the process set forth by the Office of Tax and Revenue, which requires owners to file a petition for review and meet with an assessor. If they don’t come to an agreement, they can appear before the Board of Real Property Assessment and Appeals. If they still haven’t resolved their dispute, they can take their case to Superior Court.

Ferrando says going through the appeals process often results in reduced taxes but says lawyers’ fees can cripple smaller arts organizations. And, says Robey, the payoff can be small. Last year, she and her husband appealed and got $30,000 knocked off their assessment—“a nickel” compared with the total value, she says. She was hopeful about a commercial property tax cap proposed by Ward 2 Councilmember Jack Evans, she says, but the cap never came to fruition. “D.C. has gotten in its head that it’s the hip new area,” Robey says, and if something doesn’t change soon, “we’ll continually lose the fabric of the neighborhood because the only people who will be able to afford the taxes are national businesses.”

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