D.C. Council May Divert Funds
17 06 2009According to the WBJ, the D.C. Council may consider withdrawing millions of dollars in subsidies from stalled city real estate projects to publicly finance the huge planned convention center hotel. Included in the list of projects that would loose out on funds are the Southwest waterfront and the mixed-use O Street Market in Shaw.
We are shocked by what a horrible idea this is, especially considering how many other developments will suffer. What do you think, could building one hotel next to the convention center be so important that the council would risk projects throughout the rest of the city? In our opinion it’s not. [Rendering: Cooper Carry]
FWIW — My understanding is that O Street’s funding is secure, despite what the WBJ article says.
The convention center hotel needs to be built. I think the bond sale is the way to go, so as not to thwart movement on other projects.
If a project is truly stalled with no hope of moving forward, though (unlike some of the projects mentioned in the WBJ article), then it’s probably fine to divert such funds.
As a resident, I feel like the other projects mentioned in the WBJ article would do more to revitalize neighborhoods (attracting more residents to fill vacant properties, and thereby increasing the city’s tax base) than the convention center hotel. I can’t help but think the lobby for the convention center hotel is a kneejerk reaction to try to counteract the National Harbor development; I haven’t seen the mass exodus of conventions that is feared, though.
Nothing against the convention center hotel, I just don’t see why the city needs to cancel needed projects (or harm its bond rating–which will make critical projects in the future more expensive) in order to come up with $750m in funding for a $550m hotel when private money (i.e., people’s “real” money, not the amorphous “taxpayers” money) doesn’t see it as a good risk/reward proposition.
Even if shaw rez is right, I’m still worried about anything that might upset the momentum of the O Street project. The “DVD Giant” really needs to be replaced, and that entire stretch of 7th Street desperately needs better retail options and streetscaping than it has right now.
If the hotel were so necessary, a for-profit company would have built it. Governments should stick to public goods like urban renewal, not private goods like funding hotel construction.
Seriously terrible idea - though hopefully it might scare some of the other long stalled projects into moving a bit quicker if they are afraid of losing taxpayer subsidies… Broadcast Center One in particular…
Terrible Idea! There’s gotta be a better way than sacraficing the rest of the city’s future…
I think the article represents a worst case scenario. If the nvestment banks that are benefitting from tons of subsidies on pending development projects as limited partners are the same entities that insist on a 12 percent bond cap and are the same entities that are refusing to finance the convention center hotel - - a hotel that must be built to protect the District Government’s investment in the convention center and is certain to attract tons of tourists that would otherwise be staying in the suburbs, then the District Government has to do what needs to be done to get these banks and investors to work something out. My hope is that something will be worked out.
There is already a hotel next to the convention center (granted, its a short ONE BLOCK away, across from the Carnegie Library building). I’m confused as to why this is being debated and considered, and why the City Council would want to sacrifice the rest of the city so that this area could be over-developed with hotels. FAIL. WASTE OF TAXPAYER MONEY.
The Marriot Renaissance across from the Convention Center has close to 800 rooms (797 or something like that). The new hotel is slated to have 1167 rooms. Do we need close to 2000 rooms in 2 hotels directly next to the Convention Center??? You expand about 2 blocks out from Mount Vernon square, and suddenly you have a large embassy suites, a sheraton, the grand hyatt, a hampton inn, among others. That area is well served already and can easily accomodate the handful (if that) of large conventions that would require such rooms (indeed a new hotel would introduce over capacity–what is going to happen during the 355 days of the year when no large convention in town is filling those rooms?). Spending a dime more of taxpayer dollars makes no sense. Let’s be realistic about what are truly long term valuable projects and focus on those first.
Don’t worry; what the city is proposing is to take money from a bunch of wards and put it in one ward. DC council will block this. The operative phrase in this post is “consider withdrawing.” You expect councilmembers to say “yes, take money from projects in my wards so we can invest it in a rapidly gentrifying neighborhood!”? Doubtful, to say the least.
The city is trying to solidfy the body politic behind a bond deal. “what, you don’t want to divert SW waterfront funds to MVS? well, then get behind a bond issuance!”
Just say NO to the bond issuance! I would prefer to issue bonds to fix crumbling infrastructure at attractive prices, rather than blow the rating on an unneeded hotel, thereby driving up the cost of future bonds (Is this the last time that the city is going to want to issue bonds?).
And, because I have no faith in anyone other than Marion Barry putting the brakes on spending (I can’t believe I just wrote that), can I ask why the city is going to issue $750 mil in bonds to pay for something that costs $550 mil? Where is the other $200 mil going? (If you were to tell me Marion Barry, I would believe writing that).
“O Street” can wait, no one wants a condo in Shaw right now anyway. If they don’t build this hotel every convention “in DC” will be at Gaylord National instead.
[…] Yesterday, Biz Journal’s Jonathan O’Connell reported that city leaders were pondering pulling some development finacing deals in order to build convention center hotel. Before the end of the day, Monty Hoffman of PN Hoffman had a response—that taking money from his Southwest Waterfront project ‘would be a horrific business, legal, and community tragedy for the city.’ Also from the letter, sent to Vincent Gray and Tommy Wells: ‘During this sensitive period, the mere threat of the District giving serious consideration to reneging on a $198 million commitment to fund public infrastructure on SWW has a profound chilling affect on our ability to raise capital. The integrity of our public/ private partnership with the District must not be in question.’ Also see SWDC blog, JDland, DCist, and Metrocentric. […]
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