Last week, we took a look at the Supermarket Tax Credit, which was supposed to incentivize grocery stores to locate in underserved areas. Walmart isn't asking for the break, even though three of its planned six stores would qualify. An astute commenter noticed that the District's newest Whole Foods in Foggy Bottom would also qualify, likely due to the large population of students, who don't themselves make that much money (but who often have a lot of it at their disposal). Are they claiming the break on personal and real property taxes, as well as the sales tax on construction materials, which could amount to hundreds of thousands of dollars a year?

They're not, according to a list provided by the Office of Tax and Revenue. No Whole Foods in the District are. But Safeway is claiming a lot of them: Nine out of fifteen stores are either receiving the exemption or have applied for it. And there are a couple of strange ones in there: Locations at Corcoran Street and at 17th and Columbia have received the exemption, despite the fact that they no longer fall within the incentive zone, and were both built long before the program was instituted (full map above, also here). Yellow = Harris Teeter, Green = Safeway, Pink = Yes! Organic, Blue = Giant.

Seems like this is a tax incentive that could use some tweaking.

The areas of the district where you can get a tax break on a grocery store.

Earlier today, there was a fairly typical tiff in the Wilson Building: A councilmember wanted to make a constituent eligible for a tax abatement, and the bean counters pushed back. In this case, it was Tommy Wells who was trying to help out Safeway, which wanted its Southwest branch to be able to claim the Supermarket tax exemption, even though the Chief Financial Officer and the Deputy Mayor for Planning and Economic Development said it hadn't fallen within the geographic boundaries for the exemption since 2004.

Safeway disputes that accounting of events, and says the deputy mayor's office assured them back in 2008—as permits and financing were being secured—that the break on personal and real property taxes would kick in, no problem (if they'd claimed it originally, sales taxes on construction materials would also have been forgiven). It's a significant chunk of change, worth at least half a million dollars every year.

It's a weedsy debate, and you're not interested in the details. But the relevant point is this: Safeway is trying to go back and claim a tax exemption after a project is fully built and operating. If they really needed it to move forward, wouldn't they have taken care of it ahead of time? Sure, the area has lots of public housing, but also lots of solidly middle class people for whom Safeway is their only option; it's unlikely the chain would have picked up and left (like they abandoned their Brentwood location, which was in the tax credit area but had stopped being profitable).

The tax break for supermarkets was instituted back in 2000, when there were few fresh grocery stores in broad swaths of the city. It got tweaked a few times throughout the decade, and then overhauled last year by the FEED DC Act of 2010, which made the eligibility boundaries conform to personal income levels by census tract (play around with the incentive map here). Since the program started, supermarkets have proliferated across the District, and the may have helped companies decide to locate in underserved areas of the District.

But the parsing of motivations gets more difficult when the city also throws in other incentives, like a $900,000 grant for Yes! Organic Market on Pennsylvania Avenue SE in Ward 7, tax increment financing for Steuart's Giant-anchored development at 3rd and H Street NE, and a tax break for the NoMa Harris Teeter's parking lot. If it wasn't in the eligibility zone for one tax abatement, the District's politicians would find another.

And now, Walmart comes along and demonstrates that it doesn't need any of that. It's always been part of the retailer's strategy to ask for nothing from the city that would allow it to ask for something in return. In a seemingly thoughtless oversight, the Georgia Avenue, Skyland, and New York Avenue locations fall just outside the eligibility boundaries for the supermarket tax exemption. But at the other three, Walmart is basically entitled to a big tax break, and spokesman Steve Restivo says they have no plans to claim it.

That may be just the cost of doing business for Walmart, which is in a different public relations universe from everybody else—just like throwing around donations to favorite District causes (the Aldi that just opened on 17th Street NE, by contrast, does plan to apply for the exemption).

But it does demonstrate the market's confidence in the neighborhoods where District officials previously had to pull teeth to get someone to sell carrots. So if the exemption isn't driving location decisionmaking, and grocers are even trying to claim it for staying exactly where they are—as much as Safeway might say it couldn't have done its big renovation without the help—it's worth asking how long we should keep it around.

Whoops. The press conference has been rescheduled, at a time to be determined. L'shanah tovah, friends.

Stinky no longer?

Jonathan O'Connell reports this morning that Lowe Enterprises, which brought the Sexy Safeway to Mount Vernon Square along with an almost sold-out condo and apartment complex, is hoping to do the same with the long-neglected Stinky Safeway at 3830 Georgia Avenue. If it's as well-designed as CityVista, the planned 210 housing units and new 50,000 square-foot store would be a huge boost to that stretch of Georgia Avenue, which is directly north of the Park Place development above the Georgia Avenue metro stop.

Anything could still happen to that deal. But look at the bigger picture: In a doozy of a rundown on Friday, the Washington Business Journal declared that we are entering a "new golden age for D.C. supermarkets." New Giants, Safeways, Whole Foods stores, and Harris Teeters are in place or on their way to developments across the District, from Tenleytown to the Riverfront (noticeably absent from the list are new locations in Wards 7 and 8, with the exception of the soon-to-open Yes! Organic Market at the Grays). The article doesn't mention the fate of the Secret Safeway at 1800 20th Street, which closed earlier this month, but listserv chatter indicates that the landlord is in negotiations with two up-market grocery stores to replace it (Housing Complex's multiple calls to the leasing agent have gone unreturned).

The one thing you probably won't see coming to D.C. anytime soon: That white whale of D.C. foodies, Wegmans. The Journal article reports that the gourmet grocer requires 120,000 to 140,000 square feet, or 12 to 15 acres, to display its wares. No place in D.C. has the right combination of land and wealthy clientele to make the Wegmans cut.

But one graph in particular caught my eye: The amount of retail space in “Grocery-anchored shopping centers”—which typically take the form of strip malls—divided up between D.C., suburban Maryland, and northern Virginia. The District has only a tiny slice of it, which makes sense; we don’t have as much room for sprawling retail complexes with acres of parking. That’s a good thing for people who love urban living: D.C. consumers might not have the convenience of one-stop shopping, but they do have grocery stores that are nested in and actually help build neighborhoods, rather than remote destinations that suck the life out of a community.

David Mayhood highlighted the importance of grocery stores to neighborhood development at yesterday’s Downtown BID panel. CityVista’s Safeway has been hugely helpful in anchoring the nascent NoMa community, for example, and H Street is on its way with a new Giant.

“The consumer really follows the shopping cart,” Mayhood said. “When the grocery store happens, it just explodes.”

• Giant is giving away free bags from Jan. 1-7. Cashiers "will pack every customer's order with reusables bags in all D.C. stores," according to company spokesperson Jamie Miller. The chain expects to give away 250,000 bags.  I asked Miller if Giant anticipates its customers doing some extra bulk shopping during the freebee period. He said he didn't know.
• Also at the Giant, but just on Jan. 1, the unlikely partnership of the Girl Scout Council of the Nation’s Capital (GSCNC) and Boeing will be giving away bags from 4 to 6 p.m.

• Harris Teeter, which has two D.C. locations, will be giving away a bag to each customer in the month of January—you just have to spend $20 and use your VIC promotional card. (The giveaway is per transaction.)

• The District Department of the Environment  (DDOE) and CVS have partnered in a bag giveaway program. They've already given away some 32,000 bags. DDOE spokesperson Alan Heymann says another order has been placed for some 40,000 bags, which will arrive sometime next month. His department will be working with other District agencies and nonprofits to distribute those bags.

• Also Safeway! Word on the street is they'll be giving away 10,000 bags—though I'm still waiting for a callback on this one.

*Check out this link for tons of information from the DDOE on the plastic bag fee.

According to the Giant's website, "Once the Zoning Commission approves the PUD, we anticipate it will take about 3 years to complete construction of the entire project." And spokesperson Sharon Robinson estimates it will take about a year to obtain all the proper permits before a groundbreaking can occur.

But that "completion" has just commenced. Here's what happens next, according to  Robinson.

Within the next month, the proposal goes to the National Capitol Planning Commission, and will be reviewed by the Zoning Commission for final action on July 13.

In the intervening period, the Giant development team has been asked to come up with further noise abatement solutions for the loading dock on Idaho Ave., and the Office of Planning will be pulling together some more information related to restaurants in the immediate area, an overlay district. I'm not going to lie: It's very confusing.

In an e-mail, Jennifer Steingasser from the Office of Planning shed more light on the issue:

"In the overlay area no more than 25% of the linear street front may be occupied by restaurants or fast food establishments," wrote Steingasser, but the Giant development has requested a re-zoning that will presumably allow a host of new restaurants to come in, which raised concerns "on how the linear street frontage would be calculated for those lots not included in the PUD... "[One of the Zoning Commission members] would like OP to bring a text amendment to clarify that for the purposes of calculating the linear street frontage in the overlay (outside the PUD), the PUD area should be included."

And just as a refresher, here's what the development includes:

● A 56,000 sq. ft. Giant supermarket
● A total of 140-150 residential units
● Active sidewalks with 55,000 sq. ft. of street level retail along Wisconsin Avenue, Newark Street and Idaho Avenue.
● Approximately 14,000 sq. ft. of commercial space on a second floor along Wisconsin Avenue.
● A total of 530-540 parking spaces accessed off of Newark Street and 38th Street
● Loading separately accessed off of Idaho Ave.

This week's Dupont Current has more details on the CityMarket at O project, which just received $1 million from D.C. Council emergency legislation.  The funds will be used to pay architectural, engineering and other pre-development costs (with a groundbreaking expected in summer 2010).

The city previously offered to assist with those costs by funneling money from a hike in downtown meter fees. But, according to the story, "mayoral aids refused to release the money until the meter fees were actually collected. The Evans emergency bill was crafted to correct that."

In addition to the emergency legislation's $1 million, the CityMarket at O developers will also receive $1.5 million that was originally intended for the Howard Theatre. And developers are hoping to get more money from the Department of Housing and Urban Development (HUD).

The CityMarket at O Street is a huge mixed-use project that will include more than 600 residential units, 87,000-square-feet of retail, and a colossal new Giant Food Store, partially inside the old market building at the corner of 7th and O Streets. At least this is the description that's recorded on Roadside Development's website. It's possible the group's made adjustments. The plan has been sitting up there for a while. 

Last fall, I wrote about the CityMarket project. Since then, I'd heard developers were struggling to find funding.

The project seems crucial to the continued rejuvenation of Shaw. There's no great supermarket in the area—nothing like the new Safeway in Mt. Vernon Square, the Harris Teeter in Adams Morgan, and the Giant up in Columbia Heights. The current O Street Market shell is an eyesore. And the parking lot at the site is just an empty, underused space. 

The D.C. Council clearly recognized the importance of the project and yesterday agreed to fork over $1 million to Roadside Development to help with financing, according to the Washington Examiner.  It's not surprising that Roadside could get politicians to do its bidding, considering how the group's thrown around money in the past. But in this case, I certainly think the project is worthy of support. Here's what the Examiner reported:

Ward 2 Councilman Jack Evans introduced the emergency resolution, which authorizes Mayor Adrian Fenty to grant $1 million, from any available source, to Roadside Development to get the project at Seventh and O streets Northwest moving. The grant was originally tied to revenues derived from parking meter rate increases. But Fenty and the council are bickering over how to spend the revenue, leaving O Street hanging, Evans said.

 This project seems