Housing Complex

Qatari Investors: Huge Downtown Development Project Must Conform to Shariah

The New York Times' profile of the CityCenterDC project has mostly nothing new in it if you've been following the huge downtown project at all. But it does include this fascinating nugget about the requirements of its Qatari investors:

Even before the Qatari investors became involved, Hines and Archstone determined that leasing to banks would not help them create lively shopping streets, Mr. Alsup said. But as it happened, their hesitancy on bank branches meshed with the policies of their financial partners, who adhere to the restrictions of Shariah, or Islamic law, including the ban on collecting interest. Restaurants will be able to serve liquor, but retailers whose primary business involves selling alcohol will not be allowed, Mr. Alsup said.

In their marketing materials, Hines and Archstone say they intend to provide “an authentic place for urban residents to socialize outside their homes.”

So, no bars or banks for the biggest downtown construction project in recent memory! As Bill Alsup alluded to, banks aren't all that great for a city streetscape, and it's admirable that they planned to forego such a dependable and high-rent-paying tenant. It's less advantageous, though, to not have business devoted primarily to selling alcohol. CityCenterDC is unlikely to be plagued by liquor stores, but it could definitely use a few places to be out at night drinking without getting a full dinner. Could Qatari money turn CityCenterDC into more of a black hole than the last piece of the puzzle in a living downtown?

(Also, I'm really sick of seeing the word "authentic" used in marketing and branding materials—and using it for a brand-new commercial development is particularly meaningless).

(Also I'm thinking about looking into this further—if you've heard any other examples of investors having moral or religious stipulations for the things they fund, drop me a line).

  • http://marketurbanism.com Stephen Smith

    Don't a lot of restaurants basically turn into bars after 10 p.m. anyway? Given how superficial the Gulf Arabs' religious observances often are (from what I understand, everyone drinks, they just make sure to take off their burqas and thawbs first), I wouldn't be surprised if by "primary business" they actually mean "only business," and bars that serve fries and chicken fingers will actually be allowed. Ditto with the banks – I'll bet we'll see plenty of ATMs. In any case, while I'm opposed to governments limiting the location of alcohol-serving establishments, I think it's totally acceptable (and indeed healthy!) for private investors to have such clauses (okay, we can argue over whether anything from Qatar is truly "private," but I think that's nitpicking). It's their money – they should be able to do with it as they like. If it really creates that much of an urbanist black hole, then the investment won't do well, and the fund won't be around much longer to mess up future projects.

    As for other investors having moral conditions, there are a ton of Christian funds like this in the US. Here're a few examples.

  • http://marketurbanism.com Stephen Smith

    ...oh, and then there's the example of Canal Street landlords and knock-off handbags. The American landlords won't rent to stores that sell counterfeit goods, whereas the Chinese ones will.

  • R.U. Kidding

    Here's an interesting thought, if they wanted to create an authentic street scape they would have reopened 10th Street and I Street to the grid. Traffic is part of an authentic city.

  • DC

    another example for you would be Chick-fil-A - ever notice how none are open on Sundays - yep due to religous beliefs of ownership

  • loganboydc

    They would be welcomed with open arms by certain segments in Dupont Circle. No fun, please, we're Duponters!

  • CityCenter, Las Vegas

    Contrasting how flexible are the investors in Las Vegas, CityCenter, Dubai and MGM.

  • Hillman

    The question is, is this really a private development?

    Didn't DC taxpayers give this group a ton of tax incentives to get this approved?

    If so, it's no longer private, and they really have no right to restrict things that their religion restricts, as long as it's legal in DC.

    If it's really a totally private development, they can do whatever they want.

  • Rambler

    This is completely intolerable. The land underlying the development is the old parking lot that was previously the old convention center which was indisputably DC property. There are swift legal means to undo any deal signed by the city which included religious mandates. Imposing religious restrictions on public property violates DC's Human Rights Act. This will not stand. Awesome scoop, Lydia!

  • J

    Lydia- I think this a very interesting point to bring up. But we all know how banks add nothing to the look of a new area and like someone said above- most restaurants turn into bars after 10 anyway. Id say its an interesting point- but mute argumnet if this a "private" development. Are there any other places in the city w the same rules?Let us know- thanks

  • Rambler

    @Stephen Smith @3:11 am

    Qatar's money is sovereign wealth, it's money of a family deeming itself royal and aristocratic and deeming itself imbued with religious authority. Qatar is a theocracy, a kingdom ruled by asserted divine right (in their case, Islamic divine right). The equivalent would be the Vatican financing a commercial building on DC public property with restrictions on sales of contraceptives or a ban on family planning or abortion clinics. Totally unlawful and unconstitutional, not to mention a violation of DC's Human Rights Act. This will be undone, I guarantee it.

  • Rambler

    Lydia, I say again, this was an awesome scoop! New York Times is eating your dust.

  • Rambler

    Oh, sorry, NYT had the tidbit on Shariah law, but failed to understand its significance to DC, is what I should have said.

  • http://washingtoncitypaper.com Keli

    Great post!

  • Ben

    Is the issue that the Qatari investors won't allow banks and out-and-out bars, or that the grounds for their opposition stems from religious reasons? And what differentiates this from a private developer saying that he/she will not lease space to a particular kind of tenant (such as banks or national chain retailers)?

    In my mind, this only becomes an issue if Archstone or Hines wishes to sign a tenant that the Qatari investors object to. And then it becomes a question of how the financing was arranged and what recourses either party has at their respective disposal should a dispute arise.

    A more practical question here is what defines a business that primarily sells alcohol? Would it be a business that derives 50.1% of its sales from alcoholic beverages? Because that could have a legitimate impact on the tenants that could be recruited into the space. Also, if the objection to banks is that they derive profit from interest charged on loans, what about retailers that offer lines of credit to their shoppers? Would they fall under the same categories as banks?

    I would be very interested to see the explicit terms in the financial arrangements for this deal. It certainly leaves a lot of open questions.

  • Rambler

    @Ben 11:43 am

    totally agree. I wager the city (directly or through a separate financing authority, such as the authority formally known as "Convention Center Authority") signed one or more instruments. Look for tax abatements, as Hillman suggested @10:30 am.

  • Rambler

    NYT says the property is primarily public property:

    "CityCenterDC will fill 10 acres, all city-owned except for the land beneath two condo buildings."

    http://www.nytimes.com/2011/06/22/realestate/commercial/washingtons-citycenterdc-project-is-finally-under-way.html

  • Merarch

    @R.U.Kidding
    They ARE reestablishing the street grid. Where are you getting your information?

  • Biggie

    Rambler - This is completely intolerable. The land underlying the development is the old parking lot that was previously the old convention center which was indisputably DC property. There are swift legal means to undo any deal signed by the city which included religious mandates. Imposing religious restrictions on public property violates DC's Human Rights Act. This will not stand. Awesome scoop, Lydia!

    Its simple it comes down to economics Archstone needs the cash from Qatri investors to build this project and DC wants the property tax money its a done deal

  • Mario

    There really aren't too many liquor stores within walking distance of that location. With all the new residents, it seems like they should accommodate them, if they really want it to feel like a neighborhood--impossible I think. Will there be plans for a pharmacy, dry cleaner, and hardware store too? I think not. Just wait for 14th St Part 2, with crappy high end furniture stores, overpriced restaurants, and absolutely no soul.
    BTW, the plans I've seen for the "public plaza" make it look like neither public space nor a plaza. Think breezeway.
    The site should've been a goddamn public park! That would have much better for downtown in the long run.

  • Whitney

    Lydia--I actually spoke with someone from Archstone about this project this week. It sounds like the deal will be no bars or liquor stores, but restaurants serving alcohol will be allowed.

  • Ben

    Whitney, do you know whose definiton of a "restaurant" they will be using? There are some "restaurants" in DC whose food sales are eclipsed by their alcohol sales. I assume there must be some legal definition that is in use here.

    Mario, 14th Street has a pharmacy, a dry cleaners, and a hardware store. Those things exist because there is a market and a demand for them. I'm not sure why you would presume that the tenants in this project will not include any of the things you listed. Undoubtedly there will be restaurants and high-end retail (I doubt you will see furniture stores), but if there is sufficient demand you will also likely see so-called neighborhood-serving retail as well. Dry cleaners are fairly common in such largescale developments, CVS can be found everywhere, and the City Vista development a few blocks away has a hardware store.

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  • Marc Chamberlain

    WOW!.... This has to be one of the most shocking stories I have read in recent weeks and months. America must wake up NOW and immediately to the threats sharia law poses to the nation, its people, its freedoms and its liberties.. If Anerica does not outlaw sharia, then I am sorry to say, America will accept sharia and then its all down hill from there on in..

  • http://silentmajority.blogtownhall.com LibertarianBrent

    As a Libertarian, I usually tend to be skeptical about claims of sharia law in the United States. My initial feeling is IF this were privately funded, privately financed, private property then I would say live and let live. However if there is one dime of public money, then if the same standards must be applied to a complex that is compliant with Christian or Jewish law.

    On the private property angle, assuming this were a private business then how is it any different than a Chick-Fil-A choosing to be closed on Sundays?

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  • http://FaithFreedom.org Indian

    I would like to open my PORK CHOPS / STRIP CLUB / BAR in this building. Can I get the permission ? :)

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  • Get A Grip

    This story is not a "scoop" of the NYTimes. The Times did their homework and knew there was no story "there."

    If any of you Johnny-come-lately's had been following this project from the start like I have (website, public meetings, neighborhood meetings, etc.) you'd know that this project is a private development with no financing, tax breaks or any other DC subsidies. You'd also know that the DC city council transfered the land to the developers for the project. As long as no laws are broken, I'm OK. BTW, I don't think there's a law requiring every project to have a bar or a liquor store -- if the developers don't want to include them they don't have to (there are enough bars/drunks as it is)!

    So, "Get A Grip" and stop spreading lies, innuendos and hatred. All this histeria is just a cover for racism, pure and simple. I've followed this project for years because it is near my job and I think it will be great for DC. If you don't want to shop, live or work there, that's your choice. If they don't want to lease to 4-foot high martians, that's their choice. Since you have no money in the game, its no skin off your nose if it fails or succeeds. At least the rest of us can enjoy what's planned (and I bet you'll end up there, too)!

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