One in five District owners is delinquent in property taxes, according to city Chief Financial Officer Nat Gandhi.  This startling stat was revealed last week in an Associated Press story, but the piece didn't get into the nitty gritty of just what happens next.

Well for a cautionary tale, look at Hagerstown, Maryland—the local county government is slated to auction 170 properties there today. All of the owners are delinquent on their taxes. Originally, 315 properties were advertised in early June as part of the sale.

Obviously, the property-owners are given plenty of advance notice that they've, oh, forgotten to send in a little something. They receive notices in July, January, February, March and April. Then, in June, their homes are advertised for sale. After the auction, the property doesn't immediately fall into the hands of the highest bidder, according to the story:

The high bidder on each property will receive a certificate of sale and will have the right to file for foreclosure if the debtor fails to pay the taxes owed within six months, Hershey said...“After the sale, most people come in and correct the problem,” Hershey said. “Ninety percent (of the properties) typically are redeemed.”

Image by Darrow Montgomery

The Convention Center Hotel, located at 9th Street and Massachusetts Ave.

"I want you to imagine a District of Columbia without a Verizon Center and a Convention Center," stated Ward 2 Councilmember Jack Evans. "It would probably look like Detroit."

"We are now spending records amounts of money in our school system. We are spending record amounts in our human services system. Those record amounts of money are generated in economic development,” Evans stated.

These comments came midway through today's hearing on the convention center hotel, a long-stalled project which was kicked into gear again earlier this month.

The success of the convention center and the city's tourist industry, according to various DC officials and business leaders, rests on the completion of this 1,170-room Marriott, which would have 100,000 square feet of meeting space.  Shaw locals that testified about the project seemed pretty jazzed about the retail/restaurant possibilities for the neighborhood as well. 

The question, of course, is financing and just how much of it the District is willing to put forth (and then we're back to the whole Nats Park discussion again.)

When the hotel idea was first revived, the city was considering issuing $750 million in bonds to help fund the project,  breaking the city’s bond cap,  and possibly pulling subsidies from some other projects. Then, last week, the Washington Business Journal reported that the developers had found a way to possibly raise their equity participation.

Here's the latest plan, according to Chief Financial Officer Nat Gandhi's testimony:

"The proposed financing plan includes funding for $537 million project costs. About $331 million, or 62 percent of the funding will come from private sources and $206 million or 38 percent from the [Washington Convention Center Authority]" That 206 million is a combination of 50 million in WCCA investment, 22 million in District/WCCA lease secured debt, and 134 million in TIF-secured debt."

The discussion—the parts I saw earlier on—about the hotel mainly centered around all its benefits to Shaw, to boosting tax dollars, and how it would augment convention business, in general. And then, there was Ward 6 Councilmember Tommy Wells, who wondered several times if a big designated convention center hotel was really all that necessary. After all, San Francisco doesn't have one, he stated.

Plus, said Wells, "Some of the areas with large convention centers and hotels, when they’re not busy, they’re the 'deadest parts' of town."

Next up for the convention center hotel bill: This Friday, Kwame Brown's Committee on Economic Development will convene a special meeting and mark-up of certain bills and proposed resolutions at 4:00 p.m., Room 120.

Renderings by Cooper Carry

Property taxes! They just don't save city budgets like they used to.

The AP has a story out today about the District's $340 million two-year budget shortfall. One of the main culprits is undelivered property taxes—or as the city's Chief Financial Officer Nat Gandhi said:

Much of the latest shortfall comes from a $123 million reduction in property taxes collected this year. Gandhi said almost one in five property owners is delinquent on taxes.

This isn't the first surprising gap. Previously, I've written about owners appealing their property tax assessments, and how the city neglected to collect fines from property owners. But one in five delinquent owners? Seems extreme.

According to the story, "city officials attribute the problem to the city's 10.7 percent unemployment rate. They do not expect the trend to reverse itself until homeowners receive official notices that their properties could be sold off."

Image by Darrow Montgomery