This was originally posted to the Adams Morgan Listserv on April 8, 2019, as message #50860, groups.yahoo.com/neo/groups/AdamsMorgan/conversations/messages/50860
Last Tuesday’s Council meeting helped me resolve my dilemma, whether to “Reprimand CM Jack Evans or to Hire him”, after his business proposal was made public. “Hire Him”, is my recommendation. Next steps, setup a GoFundMe type mechanism with a goal of $200K/per year. I’m still working on a slogan, but my working slogan is “Buy Back Jack!”.
When the City Council voted unanimously in favor of Resolution PR23-0225 which only transferred the Commission on the Arts and Humanities and the Washington Convention & Sports Authority/EventsDC from the Committee on Tax & Revenue to the Committee of the Whole, but leaving in place authority over the billion dollar plus per year Downtown Slush Fund, my dilemma as one who takes seriously the concept of equitable development and racial equity was solved, “Buy Back Jack”.
The Council’s overall toothlessness response last Tuesday was telling, the legislative session at its core was practically business as usual. I mean, what does legislation restricting outside employment for Council Members really have to do with the providing proper oversight of a $1B Downtown Slush Fund, in the real world, nothing! The Council still passed CM Evan’s Randall School Tax Abatement which has been around as a slush fund give away in one form or another since 2004. This abatement began life as a $40M TIF deal to be funded out of the $1B Downtown Slush Fund brokered by Jon Bouker of Arent Fox one of the “partners” proffered by CM Evan in his 2018 business proposal which prompted the toothless PR230-225 reprimand in the first place. In fact that $40M TIF deal could be considered the first Downtown Slush Fund deal. The $40M was to be paid back to the tax payer from gift shop tax revenue? (If memory services me $300K in sales per year) The fact is this deal was held open and revised over 15 years to cover the equity partners. Let public housing resident ask for their equity and the same Council and city officials will shout them down. It is this lack of oversight and commitment to true equity by Council Members which allows deals like this one that CM Evans was selling in his Business Proposal.
CM Evan’s business primarily proposal sells three things:
1. Access to $1B plus yearly Downtown Slush Fund
2. His ability to bamboozle the rest the Council & Mayor into approving with virtually zero checks and balances when selling off fund assets. In the quote below from his business proposal, this is what the CM means when he says, “Overseeing all of this is the flattest political organization in the country”.
3. Access to WMATA as Slush Fund
“Overseeing all of this is the flattest political organization in the country. There are just 15 elected officials in the city: one mayor, 13 councilmembers, and one attorney general. A contract, bill, or regulation can go from idea to consummation in a matter of months. This flat organization represents a critical opportunity for businesses who want to establish a base in the Nation’s Capital, test out policy ideas, or launch promotional campaigns. Marketing this reality to the firm’s existing clients could be tremendously successful.”
Business Development Strategy – Jack Evans <games-cdn.washingtonpost.com/notes/prod/default/documents/3562ecbc-73ec-4ea5-8819-6d5439330175/note/abc13d8b-95c2-4827-969c-210d88f01416.pdf>
If the Council is going to take the piggy bank away from Evan’s committee, but leave him with the money(slush) that was in the bank all in the same legislative meeting, why should activist continue to waste $100s of thousands of dollars and thousands of human hours advocating and organizing for Equitable Development and Racial Equity with the rest of the Council and Mayor when we can just pay Jack Evans $200K to get it done. We can then spend our energies ensuring quality and equitable access to the $1B Downtown Slush fund CM Evans manages. I know the optics would not be great, but the potential results would be ground breaking. Besides, the City Council and Mayor leaves us with few logical options other than to “Hire Jack”.
Now back to the feel good, self aggrandizing legislation against outside employment for CM Members. It is the lack of legislative oversight and due diligence, not the ability to have outside employment which puts the legislative process up for sale, especially as it relates to our $1B Downtown Slush Fund. There is really only one Council Member who consistently demands scrutiny of Slush Fund deals, that’s CM Silverman; however, more recently CM White concerned for how such deals will impact residents and neighborhoods in Ward 8 has raised his voice. Otherwise, at the Council it’s Rubber Stamp City for the rich, powerful and privileged or as CM Evan’s calls describes it seeking the flattest political organization in the country, smoothed with a little grease of course. I’ve even watched the Council rubber stamp slush deals even after the CFO’s Office says the Downtown Slush Fund Subsidy is not necessary.
Even the Friends of Trump’s Jared Kushner are getting in on the act.
As currently used, the Downtown Slush Fund is used as chum to lure the sharks of the finance, development and entertainment world, first to DC’s downtown and now neighborhoods all over the city with a another blind push for 36,000 housing units. The ickiness of this current slush fund dynamic really hit home for me after reading an OP Ed in the Washington Post by Charles Kushner, Here’s the truth about my family and our business <www.washingtonpost.com/opinions/charles-kushner-heres-the-truth-about-my-family-and-our-business/2019/03/20/7e56f49a-4b2e-11e9-b79a-961983b7e0cd_story.html?utm_term=.584f9ac0b7ee>. Charles is the Principal of Kushner Companies, builder of 20,000 housing units, and the father of Jared Kushner currently a valued member of the Trump Administration. The OP Ed mentioned billions dollar deals with two companies which caught my attention Vornado Realty Trust and Brookfield Asset Management. These companies caught my attentions because they and/or their spinoffs and subsidiaries are leveraging the Downtown Slush Fund to reshape and define DC neighborhoods and who these neighborhoods will serve.
A spin-off of Vornado Realty Trust is now JBG Smith of Amazon HQ2 fame and Brookfield Asset Management is the parent of Brookfield Properties which recently bought Forest City Reality Trust (Navy Yard). JBG Smith has is in the process of reshaping the U St. Corridor and Brookfield is everywhere but is now a major player at the Navy Yard. When the Council passed the B22-0918 – Local Jobs and Tax Incentive Amendment Act of 2018, tax abatement, would be better known as the Brookfield Commercial Tenant Acquisition Act. The purpose of the 2018 and its parent Tax Abatement in 2015 got Brookfield a tenant at one of its Navy Yard buildings and another at 655 New York Avenue NW. All after the City’s CFO’s office determined the subsidies were not necessary and one beneficiaries of the abatement was found to discriminate against African Americans.
This is not to say it was easy for CM Evans to flatten the City Council for Brookfield, but he got it done. This was a tough one, CM Evans got it pasted 10 to 3 instead of the usual 12 to 1.
B22-0918 – Local Jobs and Tax Incentive Amendment Act of 2018 or the Brookfield Commercial Tenant Acquisition Act
lims.dccouncil.us/Download/40684/B22-0918-Enrollment.pdf
And what was the council’s final vote for this Slush Fund detail:
Phil Mendelson – Yes
Brianne Nadeau – Yes
Jack Evans – Yes
Mary Cheh – Yes
Brandon Todd – Yes
Kenyan McDuffie – Yes
Charles Allen – Yes
Vincent Gray – Yes
Trayon White – No
Elissa Silverman – No
Anita Bonds – Yes
David Grosso – No
Robert White – Yes
Quite a reprimand.
And what was the vote on the Council’s the Randall School 15 year Slush Fund Odyssey?
B23-0021 – Randall School Museum and Housing Development Real Property Tax Abatement Act of 2019
lims.dccouncil.us/Download/41610/B23-0021-Introduction.pdf
lims.dccouncil.us/Download/41610/B23-0021-CommitteeReport1.pdf
Phil Mendelson – Yes
Brianne Nadeau – Yes
Jack Evans – Yes
Mary Cheh -Yes
Brandon Todd – Yes
Kenyan McDuffie – Yes
Charles Allen – Yes
Vincent Gray – Yes
Trayon White – Yes
Elissa Silverman – Yes
Anita Bonds – Yes
David Grosso – Yes
Robert White – Yes
Yes a unanimous affirmation of CM Evan’s Business Proposal. Goes to show you, call pay-to-play deal making art with affordable housing….
So, friends of development and racial equity in DC, join me in my effort to “Buy Jack Back”. If we pay, maybe we can play too. Dilemma Resolved.
William
——————————————————————————————————-
Brookfield Properties
www.brookfieldproperties.com/portfolio/washington-dc/downtown-dc/655-new-york-avenue/
www.bizjournals.com/washington/news/2018/08/01/yards-developer-forest-city-will-be-sold-for-11-4b.html
www.brookfieldproperties.com/portfolio/index/usa/washington-dc/
Charles Kushner: Here’s the truth about my family and our business
www.washingtonpost.com/opinions/charles-kushner-heres-the-truth-about-my-family-and-our-business/2019/03/20/7e56f49a-4b2e-11e9-b79a-961983b7e0cd_story.html
By Charles Kushner
March 20
Charles Kushner is a founder and principal of the Kushner Companies, a diversified real estate company.
Over the past two years, the news media have told a story about my family and our business with little regard for nuance, logic or even facts. A familiar story line suggested that Kushner Companies was on the brink of collapse, about to be brought down by an over-leveraged building. Though I am a private person and prefer to keep the details of my family’s business as private as possible, I want to set the record straight.
My father, Joseph, a Holocaust survivor, worked in construction in New York after World War II and went on to become a developer and owner of houses and garden apartments. I trained as a lawyer but soon followed in my father’s footsteps, seeing an opportunity for faster growth by buying apartments in addition to building them. In 1985, we partnered to start a new business, Kushner Companies, but shortly after we bought our first property, my father died from a stroke. I was devastated but carried on with the business.
Over the next decade, I bought and built more than 20,000 apartments in the Northeast. I also expanded the company into other businesses, such as banking, insurance, sports and energy.
In 2007, the Kushner Companies bought 666 Fifth Ave. in New York City for a then-record $1.8 billion. The thesis of the purchase: The parts of the 1.5 million-square-foot building were worth more than the whole, and splitting it into retail and office components would create value of more than $2.5 billion.
But then came the collapse of Lehman Brothers in 2008. Amid the global recession that followed, the New York real estate market soured. The projected office rents for 666 Fifth Ave. were cut in half.
That was a setback, but we had structured our debt in a way that enabled us to sell off half of the building’s Fifth Avenue retail component to pay down debt; the 2008 sale brought in $525 million <www.carlyle.com/media-room/news-release-archive/carlyle-group-and-crown-acquisitions-acquire-controlling-interest>. We kept a 51 percent stake in the retail, which was sold for a total of $1.03 billion in two pieces, in 2011 and 2012, allowing us to recoup most of our initial investment. To restructure the debt on the office component, we brought in Vornado Realty Trust in 2011 as a 49.5 percent partner in improving the building and reducing vacancies. Last year, we completed a $1..3 billion <therealdeal.com/2019/01/03/brookfield-closes-largest-piece-of-666-fifth-refinancing/>, 99-year land lease <bam.brookfield.com/en/press-releases/2018/08-03-2018-201123424> to Brookfield Asset Management, with significant financial upside for our company.
Before the Brookfield deal, critics and media reports suggested that the Kushner Companies itself was somehow jeopardized by 666 Fifth Ave. — and that the company had been forced to seek illicit or inappropriate foreign investors. Both narratives are false.
First, 666 Fifth Ave. was not a big financial loser. Even before we recouped most of the initial investment, the property represented a small portion of the company’s overall holdings; the Kushner Companies’ health was fine. Second, trophy assets in New York often appeal to foreign investors — that’s a legal and appropriate stream of funding.
Critics of our 666 Fifth Ave. purchase often focus their attacks on my son Jared Kushner, who became chief executive in 2008. That criticism is also baseless. You wouldn’t know it from the way his nine-year stewardship of the company has been portrayed, but before he resigned to join the Trump administration in 2017, Jared led major property acquisitions worth more than $5 billion, and the company grew from about 50 employees to more than 700. We now have more than $7 billion of assets under management. In the past month under Laurent Morali’s leadership, we announced <therealdeal.com/miami/2019/03/07/kushner-cos-plans-1100-unit-rental-project-in-miami-opportunity-zone/> a $550 million development project in Miami and the $1.1 billion purchase <www.wsj.com/articles/kushner-cos-pays-1-1-billion-for-suburban-apartment-portfolio-11550843211> of a portfolio of about 6,000 apartments in Maryland and Virginia.
When he left the company, Jared took several steps to preclude conflicts of interest. At the recommendation of his legal counsel, in consultation with the Office of Government Ethics, he divested from more than 80 partnerships, including 666 Fifth Ave., at a substantial financial sacrifice. We walled off Jared from receiving information on the company, and he resigned as the controlling partner in more than 100 entities. This was all done out of an abundance of caution.
Jared’s service to the country has brought unprecedented scrutiny of the Kushner Companies from the media and government investigators. We are happy to assist with all inquiries, but I must note that we are already voluntarily adhering to the strictest standards to avoid even the appearance of conflicts. As a result, we have passed up many business opportunities that we normally would have pursued. That might not be as alluring as some of the crazy stuff I read about my family and our business. But it happens to be the truth.
—–Original Message—–
Subject: More on My Jacked Up Dilemma
In these days post the Ides of March, my CM Jack Evans dilemma remains, to “Reprimand” or to “Hire” him. I must confess I’m leaning to “Hire” CM Evans at $200K/yr to help restructure the DC’s financial system to respect racial equity in our development policies. Now before the shouts of “Et tu, William”, friends, neighbors and fellow activists, please hear me out. It is not usual for governments and corporations to hire the very hackers or cons who structured the theft to help unwind, fix and restructure the system they hacked or conned. Further, almost all of CM Evans’ deals were passed by wide margins by the City Council and signed by numerous Mayors. Plus, former Mayor Gray say’s CM Evans is a honorable man.
I believe we need to be practical here, $200K/yr for access to $1.1B/yr with virtually no checks and balances and no meaningful rules or risks. CM Evans’ Business Development Strategy <www.washingtonpost.com/jack-evans-2018-pitch-to-nelson-mullins/3562ecbc-73ec-4ea5-8819-6d5439330175_note.html?questionId=cad8e3b6-5dc7-46fd-b28d-a849857449c1&utm_term=.466e918ed9a8%20%20%20%20%20ht…> was not just hot air, or marketing pitch, he has delivered.
Some activist and others will say Jack is ambitious, but is not the pursuit of racial equity ambitious.
When Abe Pollin needed luxury suites for the then Verizon Center in order to bring the city more tax revenue and hired lobbyist Jon Bouker of Arent Fox, former chief counsel and legislative director to Congresswoman Eleanor Holmes Norton, to asked did not Jack deliver over $50M public funds by restructuring the Verizon Center’s taxes.
Some say Jack wanted to be Mayor, but polling 10% to 12% of voters, it was the non-existing position of Vice Mayor the Jack wanted.
So as Vice Mayor Jack could deliver to Ted Leonsis and his fellow billionaire partners a much needed practice facility for the Wizards and the Mystics who were loosing billionaires their money, did not Jack deliver in the name of women’s empowerment and Ward 8 development a $70M facility at the public’s expense, rent free. And when the anti-development CM Silverman talked of fiscal responsibility threatening deal, did Jack creatively engineer the deal through EventsDC to avoid political checks and balances.
Some would say, Jack does not care about low and moderate income residents of color, but when others were closing schools. Jack noticed young people downtown sing, dancing and hanging out in the dark.
But with these young people and the city shrouded in darkness, did not Jack attempt to bring light via digital bill boards. And when the digital build board company attempted to make payment with checks and stock, did not the charitable Jack return them, say it’s gratis. As he only wanted to bring light.
Friends I say, Jack who is an honorable man, can deliver 10s even 100s of millions of DC public subsidies to billionaires from all over the region, country and the world for less than $200K, he can deliver for a city desperately in need for respect of racial equity in its development policies.
Please, help me bring an end to my Dilemma, let’s not Reprimand” him but help me to “Hire” him. To rebrand and restructure the $1.1B Downtown TIF fund into the DC Fund for Racial and Equitable Development.
Yes some will say Jack is ambitions, but is not the goal of racial equity in our city an ambitious one. Then again, maybe we can “Reprimand” and then “Hire” him, he will soon have more committee time on his hands.
William
—–Original Message—–
My Reprimand of CM Jack Evans Dilemma
Before delving into “my dilemma”, CM Evans’ reprimand speech was one of the best I’ve ever seen. His use of the pregnant pause combined with facial expressions was on a level which could be considered Jack Nicholson-ish. I would recommend everyone watch <dc.granicus.com/MediaPlayer.php?view_id=2&clip_id=4931> (5:20 mark).
My dilemma revolves around CM Evan’s Business Development Strategy <www.washingtonpost.com/jack-evans-2018-pitch-to-nelson-mullins/3562ecbc-73ec-4ea5-8819-6d5439330175_note.html?questionId=cad8e3b6-5dc7-46fd-b28d-a849857449c1&utm_term=.466e918ed9a8%20%20%20%20%20ht…> Proposal. As an advocate for Equitable Development and Racial Equity in the future development of this city, there’s a logical option to just hire CM Evans’ company to work on be half of equitable development. On-the-other-hand, per resolution PR23-0179 <lims.dccouncil.us/Download/41998/PR23-0179-Introduction.pdf>, do I want to be a party to violating the city’s code of conduct that states, “An employee may not knowingly use the prestige of office or public position of that employee’s private gain or that of another”. Even for the sake of “Equitable Develop” which I consider to be in the public interest. I know, but hear me out. Let’s consider some of what CM Evan’s was offering in his effort at influence peddling <en.wikipedia.org/wiki/Influence_peddling>.
If we read the Councilmember’s proposal and do a little googling, we would realize he was offering access to the city’s Downtown TIF’s available increment <www.dacbond.com/dacContent/doc.jsp?id=0900bbc78021cc82> in order to achieve a client’s goals. In 2017 even after accounting for ongoing debt obligations, the available increment was worth only an annual basis an estimated $1,095,971,000, yep about $1.1B. That would be quite a bargain, pay about $200K per year for access to $1.1B, why not?
Further, except for a few rhetorical flourishes and the shedding of a few crocodile tears, the rest the the Council will provide rubber stamp approval to the TIFs, PILOTs, Tax abatements and etc. whixh used to disperse the “available increment” on a yearly basis with almost no checks and balances. Plus, the Mayor will introduce the legislation, clean hands. On top of this, these funds are specifically designed for efforts which capital markets would not normally fund. I mean, historically when has this nations capital markets ever consistently funded equitable development and racial equity. I mean a perfect match for only $200K.
So, you see my dilemma. Pay CM Evans $200K and access $1.1B a year for the next 20 years or so to fund Equitable Development and Racial Equity or listen to speeches about affordable housing, DC Values, good government and other forms of hot air. Hmm, what “pregnant pause, voice crack, frown” say you? Need help with my “Dilemma”.
William
————————————————————————
The bill authorizes this debt to be supported by the “Available Increment,” which is the property and sales tax increments generated in the Downtown TIF as defined in the April 1, 2002 Reserve Agreement by the District, Wells Fargo Bank Minnesota, N.A., and Financial Security Assurance, Inc.
Council Reprimand of Councilmember Jack Evans Resolution of 2019
lims.dccouncil.us/Download/41998/PR23-0179-Introduction.pdf
Influence peddling <en.wikipedia.org/wiki/Influence_peddling> is the illegal practice of using one’s influence in government or connections with persons in authority to obtain favours or preferential treatment for another, usually in return for payment.
pregnant pause/silence – a pause or silence which is full of meaning or emotion