Could Qatar Underwrite the Streetcar?
When construction started on CityCenterDC, the public learned that the tiny nation of Qatar now owns a large chunk of downtown, having provided full equity financing on the $700 million project. Luckily, Qatar–and other wealthy nations seeking safe homes for their assets–are interested in other opportunities in the city.
"We're on their radar," Downtown Business Improvement District director Richard Bradley said this morning. "Can we develop a product that they want?"
Well, here's what a foreign investor like Qatar wants: long-term, large-scale, safe investments with a comfortable revenue stream (unlike domestic investors, who more often want something they can turn over for a quick profit). And the opportunities for that in downtown real estate are pretty much gone, since the big lots are mostly accounted for. Other big projects, like McMillan, St. Elizabeths East Campus, and Walter Reed could prove to be attractive investments down the line.
Building projects aren't the only big ticket items that need large lines of credit. The District Department of Transportation is also looking for ways to pay for the rest of the streetcar system, which costs about $40 million per mile. The most obvious way to do this, in the absence of major funding from the city or federal government, would be a special tax on landowners whose property values would rise as a result of the new infrastructure. But if that didn't fly, Bradley said it's possible a major investor–such as a foreign government–could enter into a public private partnership with the District, assuming some percentage of the ridership fees and potentially ownership of the tracks themselves.
You may be uncomfortable about the long-term wisdom of selling large pieces of the District's infrastructure to a small Middle Eastern petro-state. But it's hard to argue with that kind of money.