Update, 3 p.m.

Shortly after this story was published Tuesday, Ward 5 Councilmember Kenyan McDuffie led an effort to strike Cheh’s amendment from the budget, arguing that it would be “premature at best and misguided at worst” to strip the Main Street of funding before the OIG investigation concludes. The Council agreed on a narrow, 7-6 vote, leaving the Woodley Park program with funding, for now. Several councilmembers, however, argued forcefully for more scrutiny into DSLBD’s management of the Main Street program as a whole.

The original story follows:

With all kinds of questions swirling around the Woodley Park Main Street program, Ward 3 Councilmember Mary Cheh wants to hit the pause button.

The small business assistance organization isn’t set to receive any city funding in fiscal year 2023, thanks to budget language recently inserted by the D.C. Council into the new spending plan. Cheh tells Loose Lips that it’s an effort to put a hold on the Main Street’s activities until an investigation by the Office of the Inspector General into this organization (and others like it) can play out.

It’s the latest bit of fallout from allegations raised by several people close to the Main Streets program that the agency overseeing it, the Department of Small and Local Business Development, has turned a blind eye to mismanagement and played favorites in handing out city grants. DSLBD routinely awards hundreds of thousands of dollars to local nonprofits to run these Main Street efforts throughout the city, which seek to support local companies and create attractive commercial corridors, but the process of doing so has come under fire in recent months.

Woodley Park has drawn a particular amount of scrutiny after DSLBD pulled a grant away from the Main Street’s previous managers—a partnership of the Friends of Woodley Park and the nonprofit District Bridges—earlier this year. The agency instead gave Historic Dupont Circle Main Streets responsibility for managing the program, a move that angered Cheh and a variety of local business owners eager to see its existing stewards stay in place.

Executives at District Bridges believe this is the latest bit of retaliation they’ve experienced after raising questions about DSLBD’s oversight of the Main Street program, arguing that the Dupont Circle organization relied on cozy relationships with agency officials to win the grant instead. The agency and the Dupont nonprofit’s leader have both vehemently denied these allegations in previous statements to LL, saying that the grant award was purely a function of Historic Dupont Circle Main Streets’ qualifications.

Neither a DSLBD spokesperson nor Bill McLeod, the head of Historic Dupont Circle Main Streets, immediately responded to requests for comment on Cheh’s budgetary maneuver.

Cheh’s office says it expects the Woodley Park group can operate for the time being using the funding it earned for the 2022 fiscal year, which ends this fall. After that, it will become much more difficult for the group to do anything should its funding dry up—the Council will cast its first vote on the budget Tuesday and will vote for a final time next month. While Cheh’s budget proposal could always be amended, it’s unlikely that a change this small would be removed without the support of the ward councilmember.

Businesses in the Woodley Park area may not notice much of a difference. David DeSantis, a local realtor and the board chair of Friends of Woodley Park, told LL back in February that the Dupont group hadn’t done much in the way of outreach to local businesses, even as it sought to take over the Main Street.

McLeod and some of his associates disputed this notion during a Council oversight hearing in February, noting it was already working with companies to hand out relief money. However, DeSantis described those efforts as ineffective, with some checks going to businesses that have already shut down with “no process involved” for determining who gets the cash.

“This money is just going out the door,” DeSantis said. “Literally, they’re not even walking the money around and giving it out face-to-face.”

There’s no mention in the budget documents of any similar funding delay for the Upper Georgia Avenue Main Street program, which attracted similar allegations from ex-director (and former ally of Mayor Muriel Bowser) Jackson Carnes.