Rent Control (for developers)

Councilmember David Catania: "We are handing over the property to people and we don’t know what it’s worth.... So this is dumb. But we are where we are."
Photo: DC Council website.

In the wee hours of Tuesday night, the D.C. Council approved, through "emergency legislation," a land transfer deal to develop the Southwest Waterfront.

The deal includes leasing 16 acres of the most valuable property the District owns to developer PN Hoffman for the sum of $1 per year for 99 years. The ultimate rent control.

It's the largest deal in recent memory outside of the baseball stadium and the convention center, yet you won't find more than a peep from the media on it. (You can read what DC Watch's The Mail said here). Observers of the council hearing (and you can watch it live here at 10:36:30), report that some members of the Council did not know the details of what they were voting on and deals were being cut in the hallway outside as the hearing was going on.

It's an exciting project, but is giving away our most valuable property for a buck a good deal for the District? Is the agreement or even the legislation anywhere the public can access it? It's not as if this is a superfund site that needs a massive cleanup -- its the waterfront!

Here's Councilmember Catania's description of how this broken process of giving away land works (he later voted for the deal anyway):

I think this deal is a far cry from perfection. And from what has been going on today it’s bad and getting worse, to be honest, because everybody and their brother is inserting their own self interests into this. And left aside are the discussions and interests of the District taxpayer - people who own this land that we are giving up today and we don’t know for how much. And that, for me, underlines why I object to this deal - that we are disposing of property without having an independent appraisal of the value of the property, without knowing, in fact, how much the property is worth, and we are handing it over.

Now, we are told, “we can’t know how much it is worth until we go through the zoning process, how high the density, etc. and then we can have a proper evaluation.” And of course that is utter nonsense. Because any grown up organization like the District of Columbia is supposed to be with the largest per capita Office of Planning in the country, by the way, that could have and should have run a zoning process based on what we might want as legitimate owners of the land - x number of square feet for retail and residential etc. We could have, through our office of zoning, determined what we wanted, gone through the zoning process as the proprietor, and then sold off the parcels to the highest bidder.

That’s not where we are here. We are handing over the property to people and we don’t know what it’s worth. And we’ll negotiate it after the fact. And I’ve often said how utterly ridiculous that is.

No one and their brother would sell their house, can you imagine selling one of the largest assets you own, in this case, this prime one-time land on the Potomac. That we would run a process, which was utterly a joke to pick a winner with no objective criteria at all, totally subjective. It is like selling your house by saying, “Well, who will come in and promise to take care of the garden? And who will promise to take care of the kittens who come out back?” I mean, really, it is that ridiculous, right? And so if you promise to take care of kittens and keep the garden up, we are going to tell you that you get to keep this house. Don’t worry about what the house is worth or whether you’ll ever get the money. We’ll worry about that later.

But of course everyone understands the absurdity of selling a valuable asset without ever discussing the amount of money you will get, but then picking the winner. Now, I want you to imagine how the negotiations go in that perspective. How does that go? You have picked the winner. And then you go to the winner who has promised to take care of the kittens and you say, “What are you going to give me for this property?” And the person says you have already sold it to me. And you have no other choice.

And we are now six years down the road here. And this is not Mayor Fenty’s ridiculously contorted structure. This is the trajectory, the inertia of many years, of having blown this from the jump street, when Andy Altman refused to work for Ted Carter of whomever and our former Mayor just took a pass and said, “Well, I’m not going to get involved in this, Christ, we are only talking about the most valuable piece of property in the District outside of the Old Convention Center.”

Alright? So this is dumb. But we are where we are. And our choice is either we go forward with what we have or we don’t. If we don’t, we get sued. And we further imperil the promised development of this site. Or we go forward and we hope there are some hard bargainers at the table going forward. But we’ll see....

We are where we are and I am reluctantly voting to support it - under the idea that we never dispose of property again without knowing what it is worth. Hardly a high standard.

You can watch Councilmember Catania's statement beginning at 10:48:30.