It’s time for a pop quiz:
What Washington landmark and celebrity castle is “approaching the end of its physical and economic life” and in need of “substantial rehabilitation”?
If you guessed the buildings that made Bob Woodward and G. Gordon Liddy famous—the Watergate complex at 2600 Virginia Ave. NW—you win a free lunch with real estate businessman R. Donahue Peebles. All you have to do is collect it—from Peebles, not LL.
Yes, the home of the Doles (Bob and Elizabeth), Federal Reserve Chairman Alan Greenspan, and numerous other Washington notables has sunk to a sorry state, according to court papers filed by lawyers for the current owners, JBG Watergate Inc. The owners, a group of unnamed investors fronted by the JBG Companies of D.C. (whose partners are Benjamin Jacobs, Donald Brown, and Joseph Gildenhorn), recently filed suit in D.C. Superior Court to recover $569,000 in property taxes on the Watergate. They claim the city overestimated the value of the decrepit complex and issued an inflated 1995 tax bill. No trial date has been set for the suit, which was filed Sept. 29, 1995.
A. Scott Bolden, lead attorney for the owners, declined to comment on the suit. City officials also refused to comment because they consider the case highly sensitive.
The dispute began in June 1994 when Peebles, acting on behalf of the owners, appealed the District’s assessment of the Watergate property at more than $37.6 million. (Property owners received their 1995 assessments in early 1994.) Peebles pleaded his clients’ case before D.C.’s Board of Real Property Assessments and Appeals (BRPAA), which he chaired during the ’80s. A successful real estate developer, Peebles supplements his income by arguing property-tax appeals before some of his former colleagues.
Peebles contended to a two-member BRPAA panel that the Watergate was worth only $15.5 million because the investors’ group had bought it for that amount in December 1993. Board members Jacquelyn Helm and Jane McNew initially agreed with Peebles’ arguments, according to the lawsuit: On July 8, 1994, they lowered the Watergate’s assessment to $15.5 million. But six days later, the lawsuit alleges, Helm and McNew amended their opinion, stating that the December 1993 sale did not constitute an “arms-length transaction.”
In their revised opinion, Helm and McNew hiked the Watergate’s valuation to $26.4 million, according to the lawsuit. The owners paid $569,000 more in taxes than they would have on a valuation of $15.5 million. (Even the $26.4-million figure was considered low by city assessors, who had argued against lowering the $37.6-million estimate.)
Peebles was in Florida this week and unavailable for comment. Helm declined to comment, and McNew did not return LL’s phone calls.
In the lawsuit, attorneys for the owners claim city assessor Phyllis Holmes illegally provided additional information to Helm and McNew during the period between their two decisions in this case. Such contacts, if they occurred, would be illegal. The plaintiffs also say that the 29-year-old complex was almost 20 percent vacant at the time of the assessment, and that they would need to spend millions on renovation to lure tenants back.
A city assessor who asked not to be identified told LL that the $15.5-million sale price cited by Peebles back in 1994 did not reflect actual market value. Nor did it reflect the actual purchase price, the assessor said, because JBG had bought the Watergate as part of a package with other properties. This assessor considers the $15.5-million price tag “very low.”
No matter who wins this complicated fight, LL doesn’t believe D.C. can afford to lose more of its prominent residents because of disagreements with the local government. So we’re volunteering to organize a raffle to save that grand ol’ lady on the Potomac.
Send in your list of possible raffle items right away.
URBAN LEAGUE’S PRODUCTION
Last summer, workers at the Greater Washington Urban League (GWUL) complained to LL that they were sent home on hot days to save on air-conditioning bills. But last week, GWUL sponsored the “State of the District” performance by Mayor-for-Life Marion S. Barry Jr. at the Lincoln Theatre. The local Urban League chapter underwrote the entire event, which is expected to cost between $5,000 and $10,000, according to the Urban League’s estimates. D.C. Communications Director Johnny Allem calculates the cost as $5,000.
GWUL spokeswoman Janice Smith said her organization did not spend any of its own money on the event. “We were the facilitator. Urban League funds were not used,” Smith said. She added that she would not disclose the names of donors without their consent, and none had given it by press time.
Maudine R. Cooper, who served as Barry’s chief of staff in the ’80s, heads the local Urban League chapter.
The GWUL costs include a catered post-speech reception at the Reeves Municipal Center and some of the expenses of operating the theater. But they do not include rent for the refurbished U Street venue. The board of the theater waived the customary fee, a small price to pay, no doubt, for staying in the mayor’s good graces.
Nor did GWUL’s bill include the cost of filling the theater with the right kind of crowd (i.e., cheering). Department of Recreation and Parks buses delivered scores of seniors to the show. These Barry loyalists applauded at all the right places during Hizzoner’s 70-minute address. District taxpayers, not Urban League donors, footed the bill for Barry’s standing ovations.
LL can understand why GWUL would be keenly interested in Barry’s “transformation plan,” which calls for reducing the size of city government by one-fourth over the next four years. GWUL could win big when D.C. privatizes city services. The local Urban League chapter already holds city contracts to operate 29 senior-nutrition centers in Wards 2 and 5. And in the past, the District government paid GWUL to train city workers and tutor public school students.
The organization also knows how to play politics. During the waning days of former Mayor Sharon Pratt Kelly’s administration, GWUL scored a coup by snaring the contract to manage the city’s Home Purchase Assistance Program (HPAP), which helps get loans for first-time home buyers. GWUL yanked the HPAP contract from D.C. Local Development Corp. (DCLDC), which had held it for 17 years. The Urban League bid around $900,000 in winning the contract from DCLDC, which had been spending around $1.1 million annually, according to sources in both organizations.
In its bid, GWUL criticized DCLDC for only closing 800 loans yearly. But according to GWUL’s own figures, the organization closed only 232 loans in fiscal year 1995, and only 149 loans in the first six months of fiscal 1996. That is less than half the rate that DCLDC had been closing loans when it lost the contract. In addition, nearly all the loans closed by GWUL during its first year had been in the works when DCLDC relinquished the contract.
The Urban League may not deserve all the blame for the miserable numbers. GWUL had to reprocess many loan applications because disgruntled DCLDC officials had messed up the paperwork. “They got 300-and-some loans from us that were junk,” admits the former official. “People were losing their jobs, and everyone was pissed off.”
Still, this former DCLDC employee believes that the local Urban League has executed the contract poorly, especially since funds for HPAP come from the federal government, not the city’s depleted coffers.
But the federal money must pass through the hands of local government officials before it gets to HPAP. During a recent appearance before the D.C. Council, Cooper blamed the low number of closed loans on GWUL’s inability to wrest the federal funds from the D.C. government. Cash-poor District officials have shown themselves hesitant to release any money they can get their hands on these days, even if it’s destined for other purposes.
Perhaps GWUL’s sponsorship of Barry’s speech will help unclog the money pipeline.
Ward 2 Councilmember Jack Evans was late for the mayor’s “State of the District” address last week, so he parked illegally at the corner of 13th Street and Wallach Place NW and hurried into the Lincoln Theatre. When the councilmember came back for his car nearly three hours later, he found all four tires flattened, and the following note on his windshield: “Hey, Asshole. Next time you’re in this neighborhood, park legally.”
The note was signed, “The Cardozo-Shaw Avenger.”
The car bears Evans’ Ward 2 council plates, so the Avenger knew the identity of his target. (LL knows the Avenger is male because he called afterwards to report his deed.)
Evans discovered, much to his relief, that the Avenger had flattened his tires by letting the air out of them, not by slashing them.
Evans says he’s learned his lesson.
“I will never park illegally in that neighborhood again,” he vows.
The Avenger, no doubt, will be happy to hear that….
D.C. Shadow Rep./Statehood Lobbyist John Capozzi may not carry a big stick on Capitol Hill, but he does at the local post office. Capozzi, who is now campaigning for an at-large council seat, managed to get his mailman replaced, although it took him five years to do it.
The letter carrier, who wants to remain anonymous, complained to LL that he had been suspended for refusing to put Capozzi’s mail in a milk crate on his front porch, instead of in the mailbox. But that was not the issue, say Capozzi and the suspended mailman’s boss, Clarence Dickens, manager of the post office at L and South Capitol Streets.
Capozzi says he got approval from the post office years ago to use the milk crate because he receives too much mail to fit in his mailbox. But that decision apparently didn’t sit well with the mailman. Capozzi claims that the mailman would drag his crate to the front of the porch on rainy days so that his mail got soaked. Some days, Capozzi says, the mailman wouldn’t deliver his letters at all.
Three weeks ago, Capozzi’s complaints finally won him a meeting with D.C. Postmaster David Clark (not to be confused with the D.C. Council chairman). An investigation ensued, and the post office relieved the mail carrier of duty.
“I wasn’t insisting they do anything to him,” Capozzi says. “It just escalated to the point where I didn’t want my mail destroyed anymore. I couldn’t believe I was spending time on this, but I need to get my mail.”….
Meanwhile, Capozzi, At-Large Councilmember William Lightfoot, and The Rev. Graylan Ellis-Hagler of Plymouth Congregational Church have been buying Fannie Mae stock so they can attend the annual shareholders meeting in D.C. on May 16. They want to press Fannie Mae’s board to pay part of the $300 million in income taxes the mortgage lending firm would owe if Congress had not exempted it from local taxes. The protest is proving to be an unexpected windfall. Fannie Mae stock has been on the rise ever since Capozzi, Lightfoot, and Ellis-Hagler made their purchases.
At the beginning of this week, the stock jumped more than two dollars, to $34 per share.CP
Got a tip for Loose Lips? Call (202) 332-2100, Ext. 302, 24 hours a day.