Ward 1 Councilmember Brianne Nadeau asked the city today to investigate how and why it issued a series of temporary occupancy permits to Adams Morgan’s The Line Hotel, despite the fact that the hotel opened in December of last year and appears “fully occupied and functional.”
In a letter sent to City Administrator Rashad Young, Nadeau said she was concerned that hotel management continued to apply for (and receive) Temporary Certificates of Occupancy in order to avoid having to comply with the conditions of a $46 million tax abatement it’s set to receive, while still teeing itself up to receive the abatement in full.
Nadeau wrote, in part:
“I have recently been made aware of the fact that the Line Hotel has been operating under at least 9 consecutive Temporary Certificates of Occupancy after its opening. This is despite the fact that a number of administration officials and I attended the ribbon cutting on December 20, 2017, and the fact that my office has been asked to help with daily operations. One of these instances includes the restoration of DC Water services on the day of the hotel’s opening.
“I am concerned the procurement of Temporary Certificates of Occupancy is an attempt to disingenuously extend the construction period for one purpose: to delay when the hotel must begin complying with the conditions of the tax abatement and still receive the abatement in full. I am asking you to direct the Department of Consumer and Regulatory Affairs (“DCRA”) to issue a Final Certificate of Occupancy, and investigate why the agency issued 9 consecutive Temporary Certificates of Occupancy after the hotel’s opening. Please keep me informed of your findings.”
In 2010 and 2013, the D.C. Council drafted and amended a set of statutory requirements that set parameters for how and when the hotel could receive the $46 million tax abatement, set to be doled out over 20 years. Part of those requirements included a mandate that the project’s developer, Sydell Group, hire more than 300 locals to work construction on the project; Sydell is also required to earmark 51 percent of permanent jobs at the hotel for D.C. residents, and 51 percent of those for Ward 1 residents. Additionally, it was required to build 4,000 square feet of community and nonprofit incubator space “at no cost to the community.”
As the hotel reached completion, D.C. officials said Sydell had only hired 25 percent of the workers it promised to employ. City officials have long vocalized concerns about whether Sydell had the capacity or willingness to comply with its tax abatement requirements. (A spokesperson for Sydell did not immediately return City Paper‘s request for comment.)
Nadeau told City Paper it’s her “fear” that Sydell continued to apply for temporary C of Os past the hotel’s official opening, in order to extend the length of time it had to comply with that employment mandate before the Department of Employment Services and Office of Tax and Revenue evaluate Sydell’s compliance. She also expressed concerns over the oversight capacity of DOES, which the D.C. Auditor recently criticized for not enforcing contracting requirements for unemployed D.C. residents.
“I’ve been applying close oversight to the project,” Nadeau says, “And I’ve been concerned for some time—it didn’t look like they were hitting hiring numbers for the construction period. And with the recent turnover at the DOES, I wanted to raise the issue again. And this time I thought it’d be helpful” to involve Young. She said that her office asked the Department of Consumer and Regulatory Affairs last month to confirm whether the hotel had received its permanent Certificate of Occupancy.
Nadeau also denied to City Paper that her decision to publicize the letter was a strategic effort to make the news cycle before the June 19 primary election. (Campaign finance records show Sydell Group and its CEO, Andrew Zobler, each donated $500 to Nadeau’s 2014 Council campaign, but did not donate to her re-election campaign this year. 2014 was the year Sydell “got the OK to renovate interior space” of what would become The Line, and $500 is the maximum donation per ward-level election that an individual or a corporation can legally make.) “I have to do my work whether or not I’m a candidate. And I certainly wouldn’t want to wait until after an election to do something this important,” she says.