Commercial Broker Quarterly: Q3 2009 - GWCAR - Greater Washington Commercial Association of REALTORS

CBQ >> Commercial Broker Quarterly: Q3 2009

DC Public Policy Update

District Class 3 Property Tax Rate to Focus on BLIGHT not merely vacant properties

In a complicated, convoluted, roller-coaster ride of a debate with numerous twists and turns, the DC Council on Tuesday heard our cries and ELIMINATED the CLASS 3 property tax rate on VACANT properties, and created a new CLASS 3 property which focuses on BLIGHTED properties. See below for details.

Find out the latest on a host of legislative proposals, including:

PR18-180, "NOMA Vision Plan and Development Strategy Approval Resolution"

B18-299, "Waterfront Park at the Yards Act of 2009"

B18-303, "F Street, N.W., Downtown Retail Priority Area Clarification Amendment Act of 2009"

B18-307, Downtown TIF Area Available Increment Allocation and Retail Tax Increment Financing Amendment Act of 2009"

B18-377, Green Building Technical Corrections, Clarifications, and Revision Amendment"

District 3 Property Tax Rates Effective October 1, 2009

Effective October 1, the District appears to be out of the business of identifying merely Vacant building and lots, and now appropriately will begin focusing on identifying BLIGHTED buildings.

The Class 1 Property Tax Rate for Residential Properties will be $0.85 per $100 of assessed value.

The Class 2 Property Tax Rate for Commercial Properties will be $1.85 per $100 of assessed value.

The Class 3 Property Tax Rate for BLIGHTED Properties will be $10.00 per $100 of assessed value.

Since the relevant amendments and legislative language were created on the fly from the Council dais on the fourth reading of the budget, the actual legislative language that passed has not been made public and is likely to be quite messy and will need clarification.

We will definitely keep you posted as this discussion moves forward, but for now, let's just enjoy the moment that our long, hard-fought efforts have succeeded (for now) and the District will begin to focus their attention on BLIGHTED properties, not merely vacant ones. Hopefully, that will keep your clients from being ensnared in a higher property tax rate for merely vacant properties.

Below are links to articles from the Washington Business Journal, The City Paper, and a press release from Council Member Tommy Wells on the issue.

Washington Business Journal
The City Paper
Council Member Wells Press Release

District Budget - The July '09 Debate

CFO Natwar Gandhi on June 22 again slashed budget revenue projections this fiscal year 2009 by $190 million and for fiscal year 2010, which was to begin October 1st, by $150 million.

This was less than a month after the Mayor and Council approved $800 million in budget-balancing measures in the 2010 budget.

The overall highlights of the revised budget include:

Sales tax increase from 5.75% to 6% (equal to Maryland's rate)
Gas tax increase from 20 cents a gallon to 23.5 cents a gallon (equal to Maryland's rate)
Cigarette tax increase by 50 cents to now $2.50 a pack (according to American Lung Association the sixth-highest in the nation - Virginia's cigarette tax is 30 cents a pack - Maryland's is $2.00)

NOTE: THESE TAX INCREASES ARE SCHEDULED TO SUNSET IN 3 YEARS

Eliminated inflation/cost-of-living increases for DC standard deduction and the homestead exemption
Implementation of Combined Reporting Reform

"Beginning after December 31, 2010, the DC Official Code shall have been amended to require that all corporations taxable in the District of Columbia shall determine the income apportionable or allocable to the District of Columbia by reference to the income and apportionment factors of all commonly controlled corporations organized within the United States with which they are engaged in a unitary business"

DC Chamber of Commerce is leading the charge to amend this legislation.
E911 fee proposed by the Mayor again; eliminated by Council again
$350 million in spending cuts ($100 million more than Mayor proposed)
Mayor's proposal to use $125 million of the District's Rainy Day fund was rejected by Council as fiscally irresponsible given the federal mandate to repay these rainy day funds in two years or less.
ELIMINATION OF FUNDING FOR EVICTIONS WITH DIGNITY PROGRAM

WDCAR RPAC political polling

As you may have seen, WDCAR was part of a coalition of businesses who conducted political polling in Wards 1,3 & 6 to gauge political sentiment in those wards. It was the first political poll of the 2010 election season.

District Legislation: Legislation for Council Period 18

As of September 1, 2009, more than 425 bills and 476 proposed resolutions have been introduced since the beginning of Council Period which began in January 2009. Below are some of the potentially relevant pieces of legislation.

Legislation Passed or Soon to be Moving

B18-140, "Citizen Service Programs Amendment"
http://www.dccouncil.washington.dc.us/images/00001/20090622091613.pdf
Introduced by Alexander, Barry

Increasing the Citizen Service (aka Constituent Service) Funds limit from $40,000 to $80,000 and individual contributions from $400 to $500.

B18-205, "District Land Disposition Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090722153759.pdf
Introduced by Kwame Brown

Legislation authorizing the sale of certain real estate in the District of Columbia no longer required for public purpose, to require that specific findings are included in the proposed resolution; and to require that specific documents accompany the proposed resolutions for land disposition when transmitted to Council.

B18-310, "New Convention Center Hotel Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090603141210.pdf
Introduced by Gray at request of Mayor

To provide for the public funding of the new convention center hotel which will be owned by the Washington Convention Center Authority;

B18-350, "Stimulus Accountability Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090619130530.pdf
Introduced by Thomas, K. Brown

To require all jobs created by the American Recovery and Reinvestment Act of 2009 are advertised through the Department of Employment Services, and to require the Mayor to maintain a list of all jobs created and filled by District residents as a result of the American Recovery and Reinvestment Act of 2009.

PR18-180, "NOMA Vision Plan and Development Strategy Approval Resolution"
http://www.dccouncil.washington.dc.us/images/00001/20090323123046.pdf

PR18-323, "New Communities Northwest One - Site 2 Disposition Approval Resolution of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090819122810.pdf

To approve the disposition by the Mayor of certain District-owned real property as part of the Northwest One New Communities Initiative.

PR18-355, "Board of Real Estate Josephine Ricks Confirmation Resolution of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090604165007.pdf

Movement on Legislation

B18-91, "Notice of Pendency of Action Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090123164933.pdf
Introduced at request of Mayor - referred to Public Safety and Judiciary Hearing Thursday, July 2, 2009

To clarify the types of cases and proceedings with respect to which a notice of pendency of action may be filed

B18-103, "Insurance Claims Consumer Protection Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090129161318.pdf
Introduced by Mary Cheh - Committee on Public Services and Consumer Affairs Hearing June 24, 2009

To amend the Insurance Trade and Economic Development Amendment Act of 2000 to establish a cause of action for insured persons to be made whole when insurers fail to pay proper claims.

Insurance industry including health care insurers testified in opposition. DC Chamber wrote a letter of opposition.

B18-136, "Human Rights for Ex-Offenders Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090210104039.pdf
Introduced by Barry - referred to Aging and Community Affairs (Chair - Alexander)
Testified July 1, 2009 - ACTIVELY OPPOSED

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…. This bill is 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"
http://www.dccouncil.washington.dc.us/images/00001/20090210104346.pdf
Introduced by Michael Brown and Barry - referred to Housing and Workforce Development
Testified July 1, 2009 - ACTIVELY SUPPORTED

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.

B18-262, "Notary Seal Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090508095814.pdf
Introduced by Evans - referred to Finance and Revenue Hearing held July 1, 2009

To establish a code of laws for the District of Columbia to provide for rubber stamp seals that are evident in electronic scanning.

B18-265, "Release of the Deed of Trust Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090508161355.pdf
Introduced by Gray - referred to Finance and Revenue Hearing held June 23, 2009

To establish a code of law for the District of Columbia to provide that that section is not intended to be a total bar from further recovery action and to provide that the sections does not apply to promissory notes and deeds of trust securing debts held by the District of Columbia.

B18-299, "Waterfront Park at the Yards Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090601111614.pdf
Introduced by Gray at request of Mayor - referred to Finance and Revenue Hearing held June 23, 2009

To authorize the Mayor to enter into an agreement to provide for the operation and maintenance of a public park on the Anacostia River Waterfront; to establish a Waterfront Park Maintenance Fund into which certain designated revenues, including certain sales tax revenue, shall be deposited; and to impose a special assessment on properties specially benefited by the park.

B18-303, "F Street, N.W., Downtown Retail Priority Area Clarification Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090601113726.pdf
Introduced by Gray at request of Mayor - referred to Finance and Revenue Hearing held June 23, 2009

To amend the Retail Incentive Act of 2004 to clarify the boundary of the F Street, N.W., corridor of the Downtown Retail Priority Area by amending the phrase "14th Streets, N.W." and inserting the phrase "15th Streets, N.W." in its place.

New Pending Legislation

B18-307, Downtown TIF Area Available Increment Allocation and Retail Tax Increment Financing Amendment Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090601164618.pdf
Introduced by Gray at request of Mayor - referred to Finance

To amend the Retail Incentive Act of 2004 to designate neighborhood retail priority areas; to establish the base year for the allocation of tax increment revenues; to clarify the distinction between TIF projects and TIF areas; to authorize the Mayor to allocate tax increment from the Downtown TIF Area to retail TIF projects; and to establish the procedure for allocating the tax increment from the Downtown TIF Area to future downtown projects.

B18-337, "Procurement Efficiency Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090615112621.pdf
Introduced by Gray at request of Mayor - referred to Gov't Operations

To revise the competitive sealed proposal and sole source contracting procedures, authorize exemptions from the competition requirement, and further define the District of Columbia Supply Schedule.

B18-369, "Georgia Avenue Retail Great Streets Initiative Tax Increment Financing Emergency"
http://www.dccouncil.washington.dc.us/images/00001/20090727154241.pdf
Introduced by Gray at request of Mayor - referred to Finance
Emergency passed July 14, 2009

To authorize the issuance of tax increment financing bonds to support the retail development on Georgia Avenue, NW.

B18-377, Green Building Technical Corrections, Clarifications, and Revision Amendment"
http://www.dccouncil.washington.dc.us/images/00001/20090715150759.pdf
Intorduced by Gray at request of Mayor - referred to Environment

To amend the Green Building Act of 2006 and the Office of Property Management Establishment Act of 1998, to correct enrollment errors, and to provide certain technical corrections, clarifications and revisions.

B18-400, "Exemptions and Abatements Information Requirement Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090708131411.pdf
Introduced by M Brown - July 14, 2009 - referred to Finance and Revenue

To provide information requirements for the exemption or abatement of taxes and to provide for an annual certification by taxpayers for continued receipt of an exemption or abatement from real property taxation.

B18-416, ""Historic Anacostia Project Great Streets Initiative Tax Increment Financing Act"
http://www.dccouncil.washington.dc.us/images/00001/20090723113000.pdf
Introduced by Gray at request of Mayor - referred to Finance

To authorize the issuance of tax increment financing bonds to support the FP/MLK, LLC, Historic Anacostia Development.

B18-423, NOMA Water and Sewer Improvement Special Assessment Authorization Act of 2009"
http://www.dccouncil.washington.dc.us/images/00001/20090803154837.pdf
Introduced by Gray at request of Mayor - referred to Finance

To establish the NoMa Water and Sewer Improvement Benefit Area, to authorize a special assessment on properties located within the improvement area that are specially benefited by the improvements and upgrades to the water and sewer systems, to authorize the levying and collection of the special assessments once annually, and to authorize revenues collected to be used to pay the principal of, interest on, and other repayment amounts related to bonds, notes, obligations, expenditures, or other outlays which are used to pay costs of the NoMa Water and Sewer Improvement Project.