ANC Supports Tax Abatement for Adams Morgan Hotel—With Conditions
After a four hours of public comment and deliberation, Advisory Neighborhood Commission 1C passed a resolution in favor of a property tax abatement worth $46 million for a luxury hotel in Adams Morgan, setting it up for final approval by the D.C. Council next Tuesday.
But they didn't give it away for free. In his last official act as a commissioner, Bryan Weaver made the ANC's support contingent on nine conditions appearing in the legislation for hiring of nearby residents and cooperation with local non-profits. It was a critical step: According to Councilmember Jim Graham, whose seat Weaver challenged in the last election cycle partially on the basis of his willingness to hand out tax relief, the abatement won't pass the council without the ANC's approval.
To get it done, Graham, developer Brian Friedman, and a representative of the First Church of Christ, Scientist—whose property Friedman needs to build the project—sat for a battery of questions from a packed crowd at Mary's Center on Ontario Road NW. The circumstances of Graham's emergency legislation to pass the tax abatement gave rise to particular concern: Why now? Why so fast? Why does a hotel managed by a multinational corporation need taxpayer assistance in the first place?
The answer is a little complicated. Initially, the development team had been counting on getting Tax Increment Financing assistance from the city, which would have used revenue from future taxes to pay off bonds to cover the costs of the hotel. But the District ultimately decided the tax base in Adams Morgan wouldn't support that scheme. Then, the developers went for a $61 million tax abatement, which the council couldn't swallow. So Friedman Capital—as well as Michigan-based management company Beztak Properties—decided they could live with a cap of $46 million (Graham stumbled over a question about how that number had been reached, saying he wasn't a financial expert). But that put them up against the end of the council's legislative session, and Friedman warned that his partners might decide to walk if the process had to start all over again in the new year.
Much of the skepticism surrounded the role of Marriott International. Friedman eased some of it by clarifying that the company isn't an investor, but merely a hired manager, bringing all the reservation systems and a client list of millions who use their hotels around the world. And Friedman promised his project would feel more like a Kimpton hotel, with no corporate branding. "You won't see Marriott. You won't feel Marriott. This will be the Adams Morgan Hotel," he said, which seemed to relieve some of the most reactionary hostility in the room.
The other party to the discussion is the Church of Christ, Scientist. They have also started to get impatient, after being under contract with Friedman, on and off, for the better part of six years. A representative of the church, Bobby Meehling, said that after vetting several proposals for use of the building, the hotel project turned out to be the most viable—but if the process dragged on much longer, they would "go down a different road." Since the building isn't landmarked, other developers might opt to destroy the whole thing, rather than reuse it as part of a new complex. Preservationists have supported the hotel project as the best chance of preserving the century-old edifice, but the church's owners have asked them not to submit a landmark application, believing it to be a violation of their constitutional rights—and also potentially a roadblock to offloading it to someone else, should the hotel fall through.
"The principle is more important than the building," snapped Meehling, in response to preservation advocate Ann Hargrove.
Perhaps the people in most full-throated support of the project were businessowners in the rest of Adams Morgan, who aren't worried that the kind of people who pay $500 a night for a hotel room might seek entertainment outside their funky, eclectic neighborhood (though Friedman promised that there will be a "local rate" of about $200, equivalent to the government rate in D.C. hotels). Kristen Barden, director of the Business Improvement District, said every single one of her board members was in favor of the hotel, desperately hoping it would bring in daytime foot traffic and more retailers to fill in empty storefronts.
Besides being asked to take on faith that a large amount of tax relief is necessary to make the project work, skeptics worried about the hotel's proposed height and density (at ten stories, it's a "damn near skyscraper"!) as well as its architecture, which will be somewhat novel for the area. Friedman didn't do himself any favors by pointing out that the designer is the world-renowned architect Gary Handel, who has done projects in places like Hong Kong and Abu Dhabi—some in the crowd recoiled at the mention of such wealthy locales. But the modernist aesthetic wasn't what he had in mind initially; the Historic Preservation Review Board was the one that asked for something that would contrast boldly with the church facade.
After the final vote at around 10:30 p.m., Friedman looked happy and relaxed. He started this process living on Belmont Street, and has since moved to American University Park, where his wife is about to have their first child. This might be the last high-stakes development he does, Friedman said, given the stressful lifestyle and difficulty of working deals in the District. Typically, Friedman Capital takes properties through the entitlement process, and then sells them to someone who actually carries out construction—he did this mammoth project in Foxhall—which that isn't an option in this case, considering its highly public nature.
But the process is far from over. Even if the tax abatement passes on Tuesday, he still has to make it through the Zoning Commission, and potentially federal review. The way the legislation is shaping up, the abatement doesn't kick in until the hotel receives its certificate of occupancy. Until then, he's still paying taxes on the City Paper and WPFW-FM building, plus pouring money into construction, which will be unionized.
And after last night's meeting, he has a lot more promises to keep.