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In 1875, Michael Talty—a prominent local developer—built three houses on K Street NW at 11th Street. Then, the neighborhood was as fashionable as any in Washington, and these structures were no different: Talty chose Italianate brick and Second Empire architecture, topped the corner building with a graceful cupola, and embellished the columns with acanthus leaves and sunflowers. The original occupants were an intellectual author and the U.S. commissioner of Internal Revenue.

Over the years, D.C.’s wealth moved to Dupont Circle, and Talty’s small mansions were sold as boarding houses. Mechanics and artists lived next to offices of architects and insurance agents, sitting over a beauty parlor and a grocer. Historical records taper off after the 1930s.

Today, it’s a somewhat forgotten block, too far east to be included in K Street’s famed lobby zone and not far enough east to reach the new entertainment axis of 7th Street. A more modern prominent local developer, Doug Jemal, picked up the corner building for $650,000 in 2003, and two of its neighbors a couple years later. In 2004, he bolted a steel frame to the old building to anchor advertisements that span 75 feet by 30 feet. As downtown rebounded and nearby historic properties were restored to their former glory—many of them by Jemal himself—Talty’s creations rotted behind plastic sheets advertising everything from pepperoni to iPads.

Now, Jemal wants to raze the two corner buildings entirely. If city agrees, he’ll get to, and the last remnant of Washington’s 19th-century Park Avenue will be lost. How did we get here?

The answer involves a combination of city policies, generally beneficial on their own, that didn’t work out when combined.

* * *

Douglas Development has a particular method. Jemal, a New Yorker by birth, moved to Washington and started investing in the 1980s, buying old buildings, fixing them up, and leasing them out. Since then, he’s accumulated 180 properties between Annapolis and Northern Virginia. He counts the Sixth & I Historic Synagogue and the Avalon Theatre among his triumphs. But many less august properties sit, and Douglas Development has gotten millions behind on taxes, then paid them at the last minute. The firm just waits—for the right tenant, or the right deal—to start redeveloping.

But while many of Jemal’s boarded-up buildings started coming back to life as capital markets unfroze, those at 11th and K Street stayed dormant. They didn’t fall within a historic district, so weren’t protected by regulations that apply to historic properties. Meanwhile, Jemal was both borrowing against the corner building and collecting revenue from the advertising wrap—one of the 32 coveted “special signs” allowed in the District (seven of which are pegged to Jemal’s properties).

Last month, I looked up the properties, wondering how they could possibly have sat vacant for so long as the rest of the area sprouted glassy office buildings. I learned that Jemal was paying only the standard commercial tax rate of 1.85 percent for two of them. Certainly, I thought, he should at least be paying the city’s 5 percent tax on vacant properties, if not the 10 percent levied on those designated as “blighted.”

As it turned out, the Department of Consumer and Regulatory Affairs had overlooked the fact that the buildings were on separate lots (and Jemal’s people hadn’t volunteered that information). After realizing their mistake, the agency quickly tagged the corner as blighted for the next tax cycle. Instead of paying $46,000 in taxes next year, Douglas Development would have to pay about $249,000.

A month went by, with no word from Douglas. Then, on April 26, Jemal made his move: Instead of paying the blight tax, or repairing the buildings, he asked the city for permission to raze the two corner buildings entirely. If the request is granted, that higher tax bill will never come.

That’s not just up to DCRA. In 2008, the D.C. Preservation League filed a landmark nomination for most of the block, arguing that its architecture was an important reminder of the area’s past. The Historic Preservation Review Board will have to rule on it before the raze permits are approved.

The problem is, by now, the buildings may have deteriorated beyond repair. Douglas’ vice president for construction told the Historic Preservation Office this week that while he hadn’t been inside since the company bought the buildings, they could be in bad enough shape that nothing could save them (an assessment is needed to figure it out for sure).

So why didn’t the city step in earlier by acting on the landmark nominations? Jemal hasn’t done much to maintain the buildings; they could have been in better shape four years ago. But the Historic Preservation Office generally only acts on landmark nominations when the building’s in imminent danger.

“It wasn’t a conscious decision not to hear them. We sort of schedule them when the time is ripe,” says Steve Callcott, one of the agency’s staff reviewers. In retrospect, he adds, “probably the time was ripe.”

As for the owner: Doug’s son Norman Jemal is tremendously proud of the buildings they’ve restored all around downtown, but seems to see historic merit as subjective when it comes to 11th and K. “You could probably ask ten people and get ten different answers,” he says, when I ask whether the buildings are worth preserving. “Beauty is in the eyes of the beholder. While some things may be beautiful, they may not be practical.”

Overall, the District’s blight tax is working. Since Ward 4 Councilmember Muriel Bowser pushed for the higher bracket in 2010—after years in which the taxes for vacant properties changed with every D.C. Council session—DCRA’s vacant building unit has tagged hundreds of eyesores, many of which have at least been repaired enough that they no longer shelter rats and drug dens. There’s nothing like the prospect of a hefty tax to get people moving: Douglas started developing a property at 14th Street and Pennsylvania Avenue SE after an old KFC there got hit with the higher bill in the second half of 2011. (Norman Jemal says plans were in the works long before.) Some 2,257 properties were identified as vacant or blighted last year, and 1,217 of them became occupied. Some have been razed to avoid the tax, which doesn’t apply to vacant lots, but none are as historic as Jemal’s.

Ultimately, that means D.C. doesn’t collect much in taxes from properties designated as blighted. Reuben Pemberton, head of the vacant property unit, figures the Office of Tax and Revenue will recover less than 5 percent of the blight taxes his inspectors booked last year. But that’s not the point of the policy, he says. In fact, his office will often forgive the tax as soon as an owner shows concrete signs of returning the property to productive use.

It’s too bad Pemberton hadn’t gotten to the stately mansions on K Street a couple years ago, so the system could work before they crumbled beyond repair. It’s also too bad Jemal chose to hide them behind a billboard, rather than maintaining them at a level that would allow for restoration—a blight on his record, not just a corner of downtown.

Photo by Darrow Montgomery

Got a real-estate tip? Send suggestions to ldepillis@washingtoncitypaper.com. Or call (202) 650-6928.