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The Department of Consumer and Regulatory Affairs, D.C.’s agency responsible for everything from monitoring illegal construction to issuing basic business licenses, has the distinction of being among the most essential––and the most reviled––agencies in the region.
Complaints that DCRA is too large, and responsible for too much, have plagued the agency for years. Every incumbent councilmember running for re-election this season told City Paper in June that it’s the local agency most in need of an overhaul, and there is an active legislative effort to slice the agency in two.
Amid these criticisms, DCRA Director Melinda Bolling created a new program that, the agency advertised, would expedite building inspections and permit acquisition, ostensibly gratifying homeowners and mega-developers alike.
The Velocity program promises to slash the waiting time to acquire permits for nearly any kind of work––from demolition plans to change of use––from 30 days to as few as one, a tantalizing prospect for an agency whose permitting process is notoriously slow. The department would review plans for interior alteration, shell, footing and foundation, new construction, “and more!” it promises on its website.
All of this comes with a steep fee. Velocity costs a minimum of $50,000 for projects 50,000 square feet or smaller, and runs up to $75,000 for projects larger than 100,000 square feet. Its sister program, Expedition, offers a watered-down version of those services for a lower price. Velocity and Expedition launched in late September of 2017.
But this April, both the program and DCRA saw a heavy dose of criticism. Residents and councilmembers complained that Velocity would exacerbate already long waiting periods by diverting existing staff to larger development projects, allowing folks with deep pockets to effectively skip the line.
All inspection and permit applications, regardless of their size, run through the same agency office, and it appeared that larger companies could now pay to receive better service, critics said. “Oh cool. Our foundation company just told us @dcra now taking 2-3 months to run reviews on our foundation work … part of the new “Velocity Program.[”] BUT you can skip the wait …. for a cool $25K. @MayorBowser THIS IS LUDICROUS,” Brookland resident Bree Ryback tweeted at the time about her home.
“There was some overlap between us getting the program mobilized and getting staff deployed. There were times when DCRA operations were impacted,” Lori Parris, DCRA’s deputy director, tells City Paper. “We’re going to have hiccups, and we’ve had them.” She says the agency has responded by “bringing in contractors to assist us,” and having existing staff “working longer hours [or] overtime.”
Parris acknowledges that Velocity was designed “just for those large commercial projects,” but says the decision was strategic.
“The idea was, if you put everyone in a room together, they could do a review of the disciplines DCRA can control,” she says. The agency’s design team makes same-day changes to plans so developers “can walk out with an improved plan, and move forward with construction. It’s beneficial because it helped commercial and large projects get through quicker, and took them out of the queue so we could address the smaller ones currently under review.”
Hundreds of pages of the agency’s internal email communications that City Paper obtained through the Freedom of Information Act show who the program has benefitted. The documents offer a glimpse into the decision-making machine that has helped guide urban development in D.C. (City Paper is still waiting on at least 18,000 more pages of emails from the agency.)
Many of the projects and buildings involved in Velocity, whether their managers have benefitted from the program or merely discussed the idea of participating with agency representatives, are located in neighborhoods experiencing transformative redevelopment, like Mount Vernon Triangle and Deanwood; interested companies include local heavy-hitters like Pepco and Compass Coffee. The program is symbolic of the kind of development Mayor Muriel Bowser’s administration has prioritized.
From the agency’s perspective, Velocity is a booming success. Parris tells City Paper that the twin programs have raked in over $2 million for DCRA since the program started nearly one year ago, with 115 projects benefiting from Velocity and Expedition. DCRA is now scheduling Velocity reviews as far out as September.
“It was a small program in the beginning, but because of its success, it became much bigger. It’s known, it’s moving, we’re growing,” Parris says.
Among the first businesses to express their interest in DCRA’s Velocity program was boutique real estate consulting firm Taylor Adams Associates, whose managing partner, David Jannarone, met with Bolling in early September 2017 to discuss expedited permits for the Apple store opening in the Carnegie Library building, emails City Paper obtained show.
The project will see Apple coordinating a renovation of the 63,000-square-foot, 115-year-old library in Mount Vernon Square. It’s expected to open this winter.
Jannarone has deep ties to Bowser’s inner circle. He served on her finance committee during her 2014 mayoral bid, and was former mayor (and Bowser mentor) Adrian Fenty’s development director.
“Per our discussion,” Bolling wrote to Jannarone in an email dated Sept. 8, “you and your client (Apple) desire to use DCRA’s Velocity Pilot to review and approve your plan to convert the Carnegie Library into an Apple store. … I believe you mentioned that the ideal time for the review should be the week of October 2nd. As we are still in the pilot phase, I told you the price would be $30,000.00 for the review.” She added that inter-agency coordination challenges would up the price to $50,000.
“Looking forward to following up and making your program a success for all of us,” Jannarone wrote Bolling the same day.
But the program, which DCRA created through an emergency regulation––a tool agencies use to expedite the creation or enforcement of policy that’s “necessary to protect the health, safety, and well-being of the District of Columbia”––wasn’t officially adopted until Sept. 26, 2017, public documents available on the D.C. government’s website show. Conversations between Jannarone and DCRA precede this date by several weeks. (Jannarone did not return City Paper’s request for comment by press time.)
A separate email obtained by City Paper, sent by a DCRA spokesperson to the agency’s legislative aide and dated September 29, 2017, asks whether “all of the legislation [is] in place for Velocity to launch? This showed up on Twitter,” referring to an advertisement for the program. “No, it isn’t,” the aide replied, also on Sept. 29.
And a feedback report compiled by consulting firm CDKM, dated Sept. 17 and obtained by City Paper through the Freedom of Information Act, shows that DCRA completed at least one Velocity review, for the Early Childhood Academy Public Charter School, before it adopted the emergency regulation on Sept. 26.
It’s not just private companies that are interested in Velocity. One of the agency’s priorities, Parris says, is encouraging more affordable housing developers to use the program.
Other emails obtained by City Paper show that among the first handful of project managers to contact DCRA about Velocity was an executive at Commun-ET, a consulting firm and project management company that helps clients obtain permits for “some of the region’s largest and most complex projects.”
The executive was writing on behalf of DC Housing Authority to approve the payment of a Velocity fee for Parkway Overlook, a public housing complex in Congress Heights that has languished, deteriorating slowly over a decade after a series of financial missteps by its owners and the federal housing department. (An unintended consequence of the transaction is that it makes one local agency appear to profit from the failures of another.)
On October 19, the executive wrote to DCRA’s Lynn Underwood, “Please find enclosed the permit intake fee for the DC Housing Authority’s Parkway Overlook project. Per our discussion the other day, the Department of Housing wanted to know how we can proceed regarding postponing the permit fees until the 2nd week of December during their budget cycle. They are fine with the [$75,000] Velocity fee.”
Parris emphasized that DCHA is an independent agency that owns its own real estate and does its own development. “It’s funded by federal dollars… [and has] different financing structures for development,” she said of Parkway Overlook. In fact, that complex marks a notable shift for the Housing Authority. The project is one of the biggest redevelopment efforts in which DCHA acted as the primary developer, and the $88 million project was financed largely by local agencies.
It received $20 million from the Department of Housing and Community Development’s Housing Production Trust Fund, a figure that represents roughly one-fifth of the taxpayer-funded gap financing fund’s annual budget allotment. Parkway Overlook received an additional $38 million in bond financing from the DC Housing Finance Agency.
Parris adds that it’s standard for local agencies “to pay for services, whether it’s a sister agency or an independent agency,” and says that, by using Velocity, the agency “put more affordable units into the pipeline. DCHA was a great opportunity to do that, particularly because they were renovating an area that hadn’t had the appropriate attention. That’s why we thought this would be a great program.”
She confirms that DCRA completed a Velocity review for Parkway Overlook. The city broke ground on the building’s redevelopment in late March.
Mike Bernstein is preparing to open his first brick-and-mortar business in D.C., a used vinyl store on 7th and Kennedy streets NW. He’s been in this space, which used to be a laundromat, since March.
He’s received support in the form of small grants from the DC Main Streets program, which aims to revitalize 12 designated commercial corridors across the city. Nevertheless, negotiating DCRA’s permitting process has been, he says, “burdensome and challenging,” especially for change of use permits.
“The problem isn’t how long stuff takes to get done,” he says. “It’s the unknowable nature of the process that makes it feel like a Kafka novel. You don’t know how much time to budget for all that … There really isn’t someone walking you through the [licensing] process.”
He describes calling the agency repeatedly until someone finally answers the phone, only to refuse to give him the contact information of agency employees who might be able to help him with his permitting questions. DCRA is “very obviously under-resourced,” Bernstein says.
(CDKM Consulting, in its Sept. 2017 report to DCRA, suggests the agency “do everything in its power to increase transparency both inside and outside the organization. Initial steps include publishing office directories of email addresses and phone numbers for all discipline reviewers and supervisory personnel.”)
Parris confirms that DCRA installed a permanent team early this spring, “dedicated just to Velocity.” But the team is comprised exclusively of existing DCRA staff, she says, instead of new hires to support the program.
This spring, months into his permit application process, Bernstein contacted DCRA about Velocity. “I thought, ‘I’m pretty sure we don’t qualify, but I’ll call them,’” he says. But the woman who responded to his call told Bernstein that his business wasn’t large enough to qualify for Velocity, and wasn’t quite right for Expedition, either.
“That’s the frustrating thing about Velocity at its heart: If you’re a big developer, you can pay an intern to go sit around DCRA’s office all day [to ask questions]. The people with the least services to spare are given the least opportunity to get through the system in a reasonable way.”
Parris ascribes this kind of frustration, which she acknowledges the agency has seen its share of, to “confusion … smaller developers thought that in order to get the permit you have to pay.” She says resources like Expedition or DCRA’s homeowners center serve as alternatives for those whose projects, or budgets, don’t meet Velocity’s requirements.
Neither of those options, incidentally, are helpful to someone in Bernstein’s position.
“I know it’s not malicious, but it’s laughable how frustrating [the system] is,” he says.