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During the summer, they fought over whether their local Safeway should sell booze. But now, as fall turns to winter, elected officials in Dupont Circle agree on a more sober matter: that District lawmakers shouldn’t exempt two commercial projects from millions of dollars in property taxes, as two D.C. councilmembers recently proposed.
These well-located projects are being pushed by landowners, political donors, and lobbyists who are quite familiar with the Wilson Building. Whatever the projects’ merits, to some residents the prospective subsidies seem like new iterations of D.C.’s age-old pay-to-play culture that rewards special interests at taxpayers’ expense.
The first proposal would grant the group that owns the historic Masonic temple at 1733 16th St. NW more than $22 million in tax relief over 25 years. Designed by John Russell Pope and completed in 1915, the building serves as the headquarters of the Supreme Council of Scottish Rite Freemasonry of the Southern District of the U.S., a fraternal organization, and is open to the public for tours.
The other proposal would grant the developers of a hotel project at 1337 Connecticut Ave. NW $2 million in tax relief over a decade. The partly vacant property is home to two nightclubs and a Crossfit center.
While the proposed subsidies have yet to receive D.C. Council hearings and haven’t been scheduled for votes, they’re already getting an initial public vetting.
Last week, Advisory Neighborhood Commission 2B unanimously voted to oppose both bills, saying in a resolution that they “do not meet the minimum standards of public amenities or public good to offset the loss of tax revenue.” Although ANC actions don’t constitute District policy, the D.C. Council is supposed to give them “great weight.”
In an 8-0 vote with one abstention, the commissioners noted that tax breaks can be “an effective tool in urban planning,” but should be used sparingly to spark economic activity in undeveloped areas, create affordable housing, or support infrastructure.
Owners of both properties say their redevelopments would more easily succeed with government aid, in part because of prohibitive construction costs and cooling financial markets. They add that in the long run, the projects would generate more tax revenue than the potential tax relief would cost, while also reinvigorating Dupont Circle.
The Masons want to renovate their headquarters. The work is expected to cost $65.8 million and include improvements to the temple’s windows, walls, exterior stones, building systems, and accessibility.
To fund a budget shortfall, the Supreme Council would lease the parking lot behind the temple to D.C.-based Perseus Realty for about $1 million a year. Perseus would then build an apartment building there and provide replacement parking for the temple.
D.C.’s Chief Financial Officer, however, concluded in an October analysis that the tax break “is not necessary” for the renovations, and that the group has other means of bankrolling it. Those include “alternative lease terms” that could underwrite a residential component, and “unrestricted investments” that could cover the Supreme Council’s anticipated funding gap.
The body of Confederate general and Freemason Albert Pike is interred inside the building. Flanked by sphinx statues and known as the “House of the Temple,” the imposing structure features a small museum dedicated to Pike.
The proposal would be a partial continuation of the status quo: The two-acre site has been exempt from property taxes for the past three years, thanks to a local budget rider. That tax relief applies for as long as the Supreme Council owns the property and it is “not used for commercial purposes.” The Supreme Council’s planned apartment building would violate this provision.
Neither the group’s Grand Commander’s Office nor Perseus Realty responded to requests for comment.
The Masons have a sponsor in Ward 5 Councilmember Kenyan McDuffie, who quietly filed the proposal with the D.C. Council’s Secretary in June. McDuffie chairs the legislature’s committee on business and economic development and is up for reelection next year. His office did not return a request for comment by press time.
The Masons have some hired guns, too. Influential Wilson Building lobbyists John Ray and Tina Ang, of law firm Manatt, Phelps & Phillips, are advocating on behalf of the Supreme Council and Perseus for the tax break, according to 2017 disclosures.
Ray, a Manatt partner who once served as an at-large D.C. councilmember and repeatedly ran for mayor, did not respond to requests for comment, nor did Ang.
They’ve represented big-money clients like (now-merged) Pepco and Exelon, gas station mogul Joe Mamo’s Capitol Petroleum Group, and the New York-based developer of the just-opened Line hotel in Adams Morgan—which may or may not get a $46 million tax break over 20 years.
Campaign finance records show that since 2012, Manatt has donated $1,500 to McDuffie campaigns, with Ray donating $1,000 since that year. Earlier this month, Perseus President Bob Cohen contributed $500 to McDuffie’s current reelection bid, as did the company’s executive vice president of development, Adam Peters.
By law, individuals and corporations are limited to $500 in total contributions to a particular ward-level campaign, per election cycle. The limits are higher for D.C.’s at-large and mayoral races.
The temple tax break now rests with the D.C. Council’s committee on finance and revenue, which Ward 2 Councilmember Jack Evans chairs. His ward includes Dupont Circle.
Evans appears closely linked with the proponents of both proposed tax breaks.
Manatt has employed Evans in an “of counsel” position since late 2015, according to his most recent financial disclosure statement. He reported that the side job nets him between $50,000 and $100,000 annually. Those payments come on top of his yearly $137,000 councilmember salary. It is legal for D.C. councilmembers to moonlight.
Neither Evans nor his spokesman responded to requests for comment. Per campaign finance records, Manatt donated $2,500 to Evans’ campaigns (which include mayoral ones) from 2003 to 2013; Ray gave $1,450; and Ang, $1,250. The Supreme Council gave Evans $2,000 from 2011 to 2013.
As for Perseus employees, Cohen contributed $3,850 to Evans campaigns from 2004 to 2015. Firm Principal John Schwieters donated $500 from 2011 to 2014.
Evans quietly proposed the second tax break in November. It would eliminate up to $200,000 a year in property taxes, over 10 years, for D.C.-based Valor Development’s planned 73-room hotel project. The bill names Valor Principal William L. Lansing and attorney James G. Calomiris as the “principal owners” of the property, and hinges on their continued ownership.
Calomiris, whose 2016 campaign for an at-large D.C. Council seat imploded after City Paper reported that he had pleaded guilty to a 2006 assault charge involving his then-girlfriend, and that he failed two drug tests while under court supervision, didn’t respond to requests for comment.
He donated $750 to Evans campaigns from 2003 to 2015. A 1998 City Paper article reported that an attorney named “James Calomiris” hosted a fundraiser event for an Evans mayoral campaign at a downtown cigar bar. The Calomiris family has long owned and managed local real estate.
The D.C. CFO hasn’t assessed this proposal yet. Lansing says the project would cost over $35 million and would enhance Dupont Circle with “creative placemaking” and more than 50 jobs. He says the District would likely recoup the cost of the proposed tax abatement “within the first three years” of the hotel’s operations.
“We’re looking for a little bit of help,” Lansing says, noting that “the project will go on with or without” the tax break.
Joshua Lopez, a former campaign operator for Mayors Muriel Bowser and Adrian Fenty, is lobbying on behalf of Lansing for the tax break. In a statement, Lopez calls the project “a win-win for all parties involved.”
The dizzying connections are enough to make one’s head spin—not unlike the official name of the Freemasons’ group: “The Supreme Council (Mother Council of the World) of the Inspectors General Knights Commanders of the House of the Temple of Solomon of the Thirty-third degree of the Ancient and Accepted Scottish Rite of Free Masonry of the Southern Jurisdiction of the United States of America.” Inhale!