Ian Schrager’s Adams Morgan Hotel Just Waiting on its Tax Abatement
For a while now, the City Paper's landlord has been planning to turn the First Chuch of Christ Scientist on the corner of Euclid and Champlain Street NW into a boutique hotel and restaurant, in a massive project that could wake up the sometimes-sleepy Adams Morgan daytime scene (perhaps even making up for the loss of the staff of this august publication). Today, Michael Neibauer reports that Ward 1 Councilmember Jim Graham is proposing a 15-year property tax break that could be worth $21 million–something that Chief Financial Officer Nat Gandhi might be reluctant to grant.
Despite the District's tight financial situation, developer Brian Friedman argues that since every other hotel has gotten tax relief, shouldn't his project–called "The Edition"–get one as well?
“It’s like any other hotel built in this city,” said Friedman. “There’s always a subsidy. This thing is ready in every aspect from food and beverage to the gym and spa and retail. All those things are in place.”
The very nature of this project would be a community benefit–more activity on that corner, more traffic for a commercial strip where it seems like another shopfront goes dark every week. But a high-end hotel doesn't offer other things the city usually asks for in exchange for tax relief, like affordable housing or some element of public accessibility (though Friedman has said he'd kick in a few thousand square feet of non-profit office space). And this isn't a needy developer: The hotel would be the next in a 100-hotel chain planned by New York hotelier Ian Schrager and Marriott, which started in Waikiki and is now expanding in Istanbul, Barcelona, Mexico City, Bangkok, and South Beach. I doubt that they asked for tax incentives in all of those cities. But in D.C., since tax relief is the norm rather than the exception, developers can simply say that if they don't get their abatement, they'll walk.
Yes, there are some projects that need the city's help to get off the ground. Ideally, the city then leverages community benefits for the citizens of D.C.–but often, as with the TIF-funded Mandarin Hotel, they just take the money and screw the city's requirements. In handing out tax breaks so freely, the city has backed itself into a corner, with little ground to stand on when it comes to playing development chicken. No politician wants to be the one who scuttles a neighborhood's crack at prosperity, and there are plenty of other neighborhoods for Schrager to put his hotel. So on this one, I'm giving him good odds.