David Franco on the $5.7 Million Question…
View 14–located at the corner of 14th St. and Florida Ave. NW–earlier this year during construction.
When I interviewed View 14 developer David Franco last week, I figured that—whatever I ended up writing—some commenter would eventually bring up the $5.7 million tax abatement that the project received earlier this year. (And which I already wrote about.)
Right, I was!
This morning, I posted an item about the signal receiver tower next to View 14, which will soon be dismantled as part of an agreement with Comcast. Commenter #3 quickly chimed right in with a few critical lines.
What does Franco have to say about the abatement? Here's his explanation:
"When we originally did pro forma for this project, there were certain assumptions—certain assumptions on what the lease rates would be, what the retail was going to be. It was very clear when the economy turned south that we were not gonna be able to make those numbers and without any assistance, we would not be able to (a) finish the building and (b) our lenders would conceivably foreclose on the building. So the tax abatement was critical for both completing the building and allowing us to keep the building. And the last thing anyone would want is an unfinished building."
As I blogged before, the resolution states why View 14 is particularly worthy. The developers contributed $1 million to a nearby tenants’ association that wanted to purchase their building. The partners also gave $40,000 collectively to several local groups: The Parent Association of the Boys & Girls Club of Greater Washington, The Children’s Studio School at 13th and V Street N.W., the Meridian Hill Neighborhood Association, and the Cardozo Shaw Neighborhood Association.
1:04 pm
Ok, so if I give $1 million to my neighbors and $40,000 (which I can write off) to some local charities, will DC govt give me a $5.7 million tax break if I tell them that I really had anticipated making a lot more money when I started building my McMansion and it'll have to be sold or remain unbuilt if they don't bail me out?
Didn't think so.
But geez that's like a 548% return on their investment in a bad economy. That Franco guy is one amazing businessman!
1:06 pm
Outrageous! Why don't we just subsidize all the city's drug addicts to the tune of 5.7 million dollars. Then they could all build ill conceived projects (sorry David, when the "pro formas" were done this wasn't a rental property, buts lets just dance around that 1/2 truth for the moment)that are way beyond the scope of their competency and experience.
This had to have been a Taxi Cash Graham scam! So lets get this straight, the City subsidized this mess to the tune of 5.7 mil allowing David Franco to keep this building while other developers all over town scrambled and some ultimately lost? This has got to be a Taxi Cash scam. Follow the money Feds!
1:09 pm
To Tired: Franco is no brain surgeon but the business with which he is most intimately involved routinely pays off at 500%.
1:26 pm
Those proffers were already paid for so to speak as part of the PUD. Which allowed the build to be taller for the views and etc.. The $1M was to avoid any demands for more affordable units in the building. I'm also pretty sure some them had to do with the zoning relief for the vacant lot across the street. The $5.7M was a bailout given straight from the District's general fund during a budget crisis. If they were able to pull it off politically, so be it. But is was basically a grant from the city.
3:07 pm
So has work started on the Y yet?