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Money talks when the IMF clashes with its Foggy Bottom neighbors.

As one of the prime targets of anti-capitalist protesters all over the world, the International Monetary Fund (IMF) is used to the anger of mass street protest and the acrid whiff of tear gas.

But what happens when the IMF does battle with local capitalists wielding well-thumbed copies of the District’s zoning regulations? The international development agency’s latest skirmish is a homegrown District dispute with the residents of its neighborhood, Foggy Bottom, over a property—the old Potomac Electric Power Co. (PEPCO) building at 20th Street and Pennsylvania Avenue NW—and not global sociopolitics.

The IMF—which acquired the building for $98 million in 1995—wants the site rezoned so that it can raze the old concrete monolith and erect a larger office building in its place. The fund’s savvy neighbors, however, know that the site lies in the coveted downtown development district, so special zoning laws apply to the proposal. In short, they’re entitled to negotiate a “community amenities” package with any prospective developer.

At present, the sides are far apart on just what this package should contain. Advisory Neighborhood Commission (ANC) 2A wants the IMF to fund a “Neighborhood Renewal Corporation” to the tune of $15 million. The IMF’s initial proposal for off-site amenities was $300,000—or 2 percent of the ANC’s figure.

This pricey real estate battle is being played out in a more generalized air of grievance over development in Foggy Bottom. For the past 30 years, residents of this corner of Northwest have watched their residential enclave of historic town houses with well-tended flower gardens lose ground to development on all sides.

“This whole neighborhood has been under siege,” laments 21-year resident Elizabeth Elliott, who heads up ANC 2A.

On one front, locals complain that the ever-expanding George Washington University has gobbled up more property to expand its facilities and house its students, adding little to the neighborhood’s tax base. They see the IMF’s expansion of its downtown office complex—which promises increased traffic, decreased pedestrian access, and occasional riffraff parading puppets and smashing the odd window—as the second front of the ongoing development war.

“We don’t want to be an office park,” says Elliott.

Foggy Bottom locals and the IMF have long been uneasy neighbors. In fact, they spent much of the past decade quarreling over a previous IMF project.

In 1990, when the IMF sought to expand its downtown offices, the organization decided to lay claim to a site at 19th and H Streets NW, adjacent to its headquarters. The only catch was that the Western Presbyterian Church, which had operated a food kitchen providing breakfast to 200 homeless persons every day for a decade, occupied that spot.

The IMF’s solution was to flex its financial muscle and buy off the little guy. Surmising that “bigger” and “newer” equaled “better,” the IMF offered to rebuild the Western Presbyterian Church in a new location and toss $4 million into the church’s collection plate to bolster its community programs. Foggy Bottom residents reacted by lobbying to halt construction on the grounds that the church, built in 1931, was a historic landmark. When that effort failed, the neighborhood changed tack and fought the relocation of the food kitchen (and its patrons) into Foggy Bottom’s residential district.

Because the IMF needed the D.C. Council’s consent to close a public alley during the construction, the two sides eventually struck a deal in a court-run mediation initiated by the council. As a result, the IMF donated $346,000 to fund an alternative homeless feeding service called Care-a-Van, which operated a few blocks away from the new church.

The solution proved temporary. Care-a-Van went broke after a year, collapsing under a cloud of mismanagement allegations. Neither the city nor local residents forked over the cash to keep the program going, and Care-a-Van has been all but forgotten—save for the bad taste left in everyone’s mouth by the dispute and what local residents say was a promise that the IMF would not expand again.

The IMF says that it’s seeking to do just that only because it has outgrown its present digs. “When we purchased [the PEPCO site] five years ago, we had no plans to build a new building,” says IMF spokesperson Inger Prebeson.

The fund now says that its present headquarters, at 19th Street and Pennsylvania Avenue NW, can’t house the organization’s 2,800 staffers, so it wants to replace the PEPCO building with a new glass-windowed office complex that’s four stories taller than the current structure.

The IMF’s plans require a zoning upgrade for the PEPCO site, and that’s where the neighborhood’s demands come in. To judge from the frosty reception that the fund and its plans received at a packed ANC 2A meeting on July 18, the IMF won’t be breaking out hard hats anytime soon.

“We got screwed once,” said Foggy Bottom resident Sarah Wallace at the meeting. “We don’t want to get screwed again.”

Two IMF representatives presented their construction plans before the gathering of residents and a posse of officials at the back of the room. The IMF’s architect pointed to drawings that set out proposed retail space, and he added that the fund would also donate $300,000 to the neighborhood to repair park benches, replace trees, and feed the homeless.

The commissioners of ANC 2A had other ideas. They countered with their own proposal for the $15 million donation to be spread over 10 years to fund the Neighborhood Renewal Corporation.

Though the commissioners know how much they want for the new corporation, they haven’t had time to hammer out its shape just yet. They complain that they are being rushed by the IMF to put an offer on the table.

“Our next step is the continued development of our concept,” explains Commissioner Richard Price.

Commissioner Maria Tyler insists that “there [will] be complete transparency in its workings.” In the rough draft, commissioners envision a charter, a mission statement, and trustees elected by the community and charged with overseeing a variety of neighborhood projects.

“If we’re going to end up with a huge building and a huge change in the zoning, there has to be a huge compensation to the community,” Elliott explains.

The $15 million figure isn’t based on any estimate of the inconvenience or irritation that might be caused to residents by the new IMF expansion. Rather, it is the combined cost for a number of local projects that have long been postponed because of lack of funds, including capital improvements for a school, neighborhood-air-quality reports, and an analysis of parking and traffic-light-synchronization problems.

“If you’ve been involved in West End community issues for a while, you know that these are long-standing community concerns,” Price says. “We have never had the resources to do them.”

The ANC adopted a resolution to request that the D.C. Zoning Commission delay the scheduled consideration of the IMF’s proposal in order to allow more time for negotiations over the community amenities package.

Two days after the ANC meeting, IMF representatives themselves wrote to the Zoning Commission to delay the case. Price interprets this as a positive sign: “IMF would rather come to an agreement than have us testify against their project at the Zoning Commission hearing.”

IMF attorney Whayne Quin has years of experience shepherding commercial projects through D.C. zoning regulations, but he seems surprised by the ANC’s audacity.

“Highly abnormal,” says Quin. “Never seen anything even closely related.”

No one has yet proposed to halt the construction on the grounds that the PEPCO building, a local eyesore since 1971, might be a historic Washington monument.

Bill Murray, the IMF’s spokesperson for external relations, has an office on the 11th floor of the current IMF building, with a view looking down on the PEPCO building across the street. “It’s an ugly building,” he says. “Anything we build on that site is going to be an improvement.” CP