This was originally posted to the Adams Morgan Listserv on May 9, 2019, as message #51069, groups.yahoo.com/neo/groups/AdamsMorgan/conversations/messages/51069
This was a claw back deal. I don’t really understand the weak leadership on this.
William
The Line hotel missed local hiring benchmarks, may still receive $46M tax break
By Rebecca Cooper – Senior Staff Reporter, Washington Business Journal
May 8, 2019, 1:53pm EDT Updated May 8, 2019, 2:06pm EDT
Two members of the D.C. Council are calling foul on a city department’s approval of a $46 million tax abatement for the Line D.C. hotel — despite the fact that the project did not meet some of the legal requirements to receive that tax break.
Councilwomen Brianne Nadeau, D-Ward 1, and Elissa Silverman, I-At large, wrote Monday to Attorney General Karl Racine to determine whether the city’s Department of Employment Services had the authority to approve a payment in lieu of meeting some of the requirements for the tax abatement.
The agency said that it was approving a $600,000 payment from the Line’s team — to be paid in $150,000 increments over four years — into the city’s resident job training fund as “substitute compliance” for not meeting some of the employment requirements for the abatement. Specifically, the hotel only employed 273 D.C. residents during construction, rather than the 342 full-time-equivalent construction positions it was supposed to employ, according to information provided to Nadeau and Silverman by DOES, cited in the letter.
The hotel also did not have District workers account for more than 51% of total construction hours, and did not reserve all construction apprenticeships for D.C. residents, according to the lawmakers.
“Given that all the provisions outlined in the law were not met, we assert the Line Hotel is not eligible for the tax abatement,” the councilwomen wrote in the letter.
We’ve reached out to the hotel’s owners and will update this story when we hear back.
The Department of Employment Services certified to the Office of the Chief Financial Officer that the project was in compliance — if it paid the $600,000 for job training. The first payment has been made, but OCFO spokesman David Umansky said the abatement has not yet been processed.
Arne Sorenson has been CEO of Bethesda-based Marriott International since 2012. He’s shown here in 2016, when the Washington Business Journal named him its CEO of the Year after the Starwood acquisition closed.
Nadeau and Silverman argue, however, that DOES has reached beyond its purview — which is to assess compliance with D.C.’s First Source law — when it certified the Line’s compliance with the tax incentive law.
“We are concerned that, in effect, the director is claiming the authority under the District’s First Source law to waive unrelated sections of law and permit the Line Hotel to receive its tax abatement without meeting the legislated requirements,” Silverman and Nadeau noted in their letter to the attorney general. “Therefore, we would appreciate your legal opinion on the authority of DOES and/or the executive branch of D.C. government to use First Source law to waive provisions of law unrelated to First Source.”
The Line received its permanent certificate of occupancy in July, kicking off the city audit that determined whether it met all of the provisions for the tax abatement. Line owners Sydell Group, Foxhall Partners and Friedman Capital have always pledged that they met all the requirements.