CBQ >> Commercial Broker Quarterly: Q1 2009
| Federal District Issues |
Stimulus Money for the District Government
Many of you are aware of the energy efficient upgrades for Federal buildings and the money for the St. Elizabeth's project included in the stimulus package. For those who are interested, Mayor Fenty unveiled a resource tool website, recovery.dc.gov, that provides information about how the recently enacted American Recovery and Reinvestment Act (ARRA) will impact District residents and businesses in other ways. Read more >>
DC Voting Rights - The District of Columbia House Voting Rights Act of 2009
The Senate passed the "District of Columbia House Voting Rights Act." Unfortunately, it passed with an amendment that would effectively overturn existing DC gun control laws. This has complicated, if not derailed, prospects for passage of this bill in the House. Ms. Norton is working closely with the House Leadership to move the legislation without the Senate amendment, but prospects remain unclear.
The National Association wrote ANOTHER LETTER to Congress this week IN SUPPORT of the "District of Columbia House Voting Rights Act." For those who are unaware, NAR is one of the few national associations to speak out in favor of DC Voting Rights. Thanks to NAR for their support of this issue.
District Budget Challenges
Fiscal Year 2009 Update
According to the Comprehensive Annual Financial Report (CAFR) for fiscal year 2008, the District closed fiscal year 2008 with a $191 million surplus, likely enough to cover the anticipated budget deficit this fiscal year 2009.
Roughly $87 million (of the $191 million 2008 surplus) is available to close the latest projected December shortfall for fiscal year. This $87 million plus the approximately $46 million the Council set aside should be enough to close the $135 million current gap.
Fiscal Year 2010 Projections & Upcoming Budget Debate
Unfortunately, fiscal year 2010 revenue projections do not look good. The District faces a $456 million revenue reduction. This situation may be compounded by forecasts of increased commercial vacancies and ever increasing unemployment rates. Currently, the District unemployment rate for December was 8.9% and is forecast to continue climbing to 10%.
There is hope that the Obama Stimulus Package will help mitigate some of these spending pressures. There is also concern that District officials will rely too heavily on the Federal Stimulus package, therefore avoiding to make difficult decisions in the upcoming budget debate for fiscal year 2010, which will begin in late-March.
Green Buildings
Green Building Hearing, Wednesday, March 18
Government Operations and Environmental Chairperson Mary Cheh has scheduled a hearing for March 18 regarding, "Green Building Practices." It is our understanding from her staff that the goal of the hearing is to discuss the implementation of the Green Building Act of 2006 and what more could be done. There is no new legislation as of yet.
District is Nation's Top City for ENERGY STAR Buildings
Also, enclosed is a press release touting, the District as the Nation's Top City for Energy Star Buildings.
Parking Meter INCREASE
In the last meeting of 2008, legislation sponsored by Councilmember Jim Graham increasing parking meter rates from $1 per hour to $2 hours in most areas of the District (other areas will increase by 25 cents per hour) passed. This law is now in effect.
DC Impervious Surface Area Charge - WASA
Proposed Rulemaking for DC WASA that would permit additional taxation on commercial properties based upon how much land has been covered by concrete or structures is pending. Comments on the proposed rulemaking are due by March 26, 2009 and a hearing is scheduled for April 13.
The charge for one ERU (Equivalent Residential Unit based on a median area of a single family residential property, approximately 1,000 square feet) for purposes of calculating the stormwater fee will be $2.57/month:
Calculate the stormwater fee using the following formula.
DDOE also has a FAQ section on its website. Here's the link.
Also, enclosed is a Powerpoint presentation by WASA on this topic, Click here. To see the notice of the proposed rulemaking, Click here.
District Earns First Top Bond Rating
The District has earned its first ever top rating from a key Wall Street firm. Standard & Poor's handed the District's new income tax bonds, the much sought-after AAA rating. DC has never before issued bonds backed by income taxes.
New Class 3 "Vacant" Property Legislation
The Council is hearing from more and more constituents regarding the Class 3 Rate. There appears to be growing recognition in the Council that there are problems with last year's legislation. GCARR has been asked to identify some of the specific problems and work with Councilmembers and staff craft solutions to these problems.
If you have any comments or insight on how we can improve the Class 3 issue, please contact me: ekrauze@gcaar.com.
Legislation for Council Period 18
More than 180 bills and 155 proposed resolutions since the Council first met January 6. Below are some of the potentially relevant pieces. In particular, I would like to highlight the first piece of legislation introduced by Councilmembers Evans and Catania, which is intended to roll back a number of business related taxes, and in particular the Class 2 Commercial Property Tax Rate. (The rest of the legislation is listed in order of introduction.)
B18-172, "DC Economic Growth and Investment Stimulus Act of 2009"
Legislation to increase the filing threshold amount for unincorporated businesses and adjust it annually for inflation; to lower the real property tax rate for Class 2 commercial properties; and to lower the corporate and unincorporated business income tax rates. Enclosed is a Washington Business Journal article on the topic.
B18-18, "NOMA Residential Development Tax Abatement Act of 2009"
To provide for a residential tax abatement program to encourage new multi-family residential development in the NOMA areas of Wards 5 and 6.
B18-19, "Real Property Tax Assessment Act of 2009"
To require the Mayor to follow the written decision of the Board of Real Property Assessment and Appeals when making an assessment in subsequent years.
Hearing scheduled for Wednesday, February 25.
B18-61, "Saint Elizabeth's East Special Taxing District Establishment Act"
To establish a Saint Elizabeth East Special Taxing District to provide that funds generated by the special taxing district be used for mental health programs and services that benefit District residents.
B18-72, "DCPS Building Amendment Act of 2009"
Legislation that would designate the State Board of Education as the authority for the disposition of surplus DCPS property. As currently written, the bill would limit any dispositions to public charter schools (right of first offer) and District government agencies.
Interestingly, but not surprisingly, the District has begun to run into difficulty in selling the recently vacated DC Public Schools.
B18-76, "Public Land Surplus Standards Amendment Act of 2009"
Legislation originally introduced in 2008 to create standards and procedures to be met for the designation of public property as surplus. DCBIA and others have questioned its potential negative affect on development in the District.
B18-80, "Anacostia BID Amendment Act of 2009"
To approve the establishment of the Anacostia business improvement district.
B18-91, "Notice of Pendency of Action Amendment Act of 2009"
To clarify the types of cases and proceedings with respect to which a notice of pendency of action may be filed. According to the Land Title Association, while the Bill addresses how to release improperly filed Notices of Lis Pendens, it also makes a radical proposal to extend the Lis Pendens provisions to include leasehold interests.
B18-93, "New E-Conomy Transformation Act of 2009"
To extend from 5 to 10 years the abatement from taxes provided to a Qualified High Technology Company located in a high technology development zone.
B18-134, "Demolition and Raze Permit Community Notification Act of 2009"
To require 30 day notice to neighbors before a building can be demolished or razed.
B18-136, "Human Rights for Ex-Offenders Act of 2009"
To amend the Human Rights Act of 1977 to prohibit employment, housing, and education discrimination based upon arrest record, or conviction record, with certain exceptions...
Similar to 2006 legislation, passed by the Council, but vetoed by former Mayor Anthony Williams.
B18-137, "Successful Ex-Offender's Re-Entry Act of 2009"
To require the Mayor to submit to the Council within 90 days... a comprehensive plan that outlines strategies for successful re-entry of ex-offenders back into the community in the areas of housing, education, health care, rehabilitation, job-training, and employment opportunities.
B18-175, "Smart Lighting Act of 2009"
Legislation addressing the use and focus of public lighting for greater energy efficiency.
Proposed Resolutions
PR18-46, Brookland/CUA Metro Station Small Area Plan Approval Resolution
PR 18-120, Fiscal year 2009 Income Tax Secured Revenue Bond and General Obligation Bond Issuance Approval Resolution of 2009
To approve the borrowing of funds by the District through the issuance and sale of either income tax secured revenue bonds or general obligation bonds.
PR 18-124, Center Leg Freeway (Interstate 395) Fee and Air Rights Disposition Extension 2009
To extend the time period the Mayor may dispose of the property.
District Issues
(1) Divide the amount of impervious area at a property by 1000 Square feet (1 ERU) = X.
(2) Multiply X by $2.57 = stormwater fee.
Introduced by Evans, Catania - referred to Finance and Revenue
Introduced by Thomas, Graham - referred to Finance
Introduced by Mendelson, Evans - referred to Finance
Introduced by Catania, Michael Brown - referred to Finance
Introduced by Councilmember Barry- referred to Committee of the Whole
Introduced by Thomas - referred to Government Operations and the Environment
Introduced by Barry - referred to Finance
Introduced at request of Mayor - referred to Public Safety and Judiciary
Introduced by Evans, Catania - referred to Finance and Revenue
Introduced by Bowser - referred to Public Service and Consumer Affairs
Introduced by Barry - referred to Aging and Community Affairs
Introduced by Michael Brown and Barry - referred to Housing and Workforce Development
No legislation on line at this time
Introduced by Cheh, Michael Brown - referred to Government Operation - comments Public Works
PR18-78, Riggs Road and South Dakota Avenue Area Development Approval Resolution
Introduced by Gray at request of Mayor - referred to Finance and Revenue
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