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Douglas Development has made promises before to Mount Vernon Square, but this time the company says it has one deal signed and another all but done for two large parcels on New York Avenue between 6th and 7th Streets NW. Douglas executive Paul Millstein dropped news of both at an ANC meeting last night.
The first has been hinted at before: A 200-unit, Shalom Baranes-designed rental building on the site where the Fringe Festival has been allowed to stage for the last few years, to be built in a joint venture with residential giant Kettler. That one’s in the bag, and Millstein says he hopes to break ground within 12 months.
The second is newer. Douglas plans to sign a lease this month with a large association headquarters that will take the entirety of a 300,000 square foot office building, with ground floor retail. The mystery entity looked at 24 sites in the region, Millstein said, and chose square 451 for a flagship location. He expects a groundbreaking next year.
What did Millstein want from the ANC, then? Approval of a few formalities, like a small alley closing. The stickier request, though, was support for relief from the blighted tax rate on the historic Hodges Sandwich Shop building, which the company agreed to move to the north side of New York Avenue as soon as the residential development began. In the mean time, the little building has deteriorated to the point where it would be taxed at the new ten percent rate—which would cost Douglas $92,000. Millstein said he would ultimately spend $30,000 to fix the building enough to avoid the blighted class, but considering that development was about to begin, thought he should get a pass on this one altogether.
“We have been actively trying to lease, develop, and market this for three years now,” Millstein said, before pointing out the flu shots, band uniforms, and thanksgiving turkeys the company had handed out in the community. “We try to be good neighbors. But we really feel that it’s an unfair shot to us under these circumstances to be taxed at that rate.”
Douglas Development always has to deal with skepticism from a community that has a goodly chunk of the many run-down buildings that the company bought before the boom and was then unable to develop when the market fell apart. Douglas has failed to pay property taxes on its massive portfolio, half of which—some five million square feet—stands vacant.
But ANC 2C chairman Alex Padro, also the man in charge of Shaw Main Streets, came to Millstein’s defense. Community groups opposed a similar request from Shiloh Baptist Church last year, he pointed out, because the church hadn’t been making efforts to put its many properties in the neighborhood to productive use. Douglas, on the other hand, was honestly a victim of unforseen economic hardship.
The ANC supported the tax relief, for a period of one year, by a vote of two to one.