A few months ago, Councilmember Jim Graham started pushing for forgiveness of about $400,000 in tax debt incurred by Central Union Mission on a property they owned on Georgia Avenue. Since he and community members had torpedoed plans to relocate its homeless shelter there from 14th and R Streets NW, the Mission didn’t get the non-profit property tax exemption for several years, and so racked up hefty bill that it didn’t have the resources to pay.
The proposed tax break—which will actually cost the District $507,715 in fiscal year 2011—came to a final vote today, with the Council already in a foul mood after having approved a $46 million tax abatement for the Adams Morgan hotel. As with the hotel, Graham warned that the deal would not go through if the Council didn’t take emergency action to OK the abatement, which will be paid for out of tax increment financing dollars allocated for Georgia Avenue. Central Union Mission just closed on the sale of its Georgia Avenue property to the developers of Park Morton, and without the tax relief, would have to cut half a million from services in its new location at the Gales School downtown.
The circumstances did not make councilmembers happy. Under aggressive questioning by Tommy Wells, Graham seemed to have contracted amnesia about the reason the sorry situation had come about, saying the Mission changed its mind about the Georgia Avenue location because of a “zoning issue,” which at least isn’t the whole truth.
“My understanding is that you were instrumental in not allowing them to open a homeless shelter there,” Wells said. “Now the district government is paying real money for this error…I’m really frustrated by this.”
Then David Catania jumped in. “So we’re bailing them out, as well as, I would say, bailing out the ward Councilmember,” he carped. “Everything about this is wrong. Rather than fund access for justice, we are going to pay debts for a bad business decision.”
The tax break ended up passing 8 to 4, with Wells voting present. By the end of the session, though, many more words had been said about the need to design a more thoughtful, comprehensive system for evaluating tax relief. Michael Brown has sponsored legislation that would require a financial analysis and thorough listing of community benefits for every proposed abatement, and the D.C. Fiscal Policy Institute recommends setting an overall budget for them, so there’s some sense of competition.
That’ll have to wait until next session, though—this is the last you’ll hear from the Council until January.