Tony Williams takes DC Govt to task for failing downtown and budget mismanagement

[Anonymous]

I am not sure why this hasn’t gotten more attention, but holy cow Tony Williams and the Federal City Council just send the DC Govt a letter that the equivalent of a nuclear bomb. The letter was addressed to the CFO, probably for the optics of Williams not directly criticizing Bowser, but I’m not sure how it can be interpreted as anything but a shot at Bowser.
https://www.federalcitycouncil.org/wp-content/uploads/2022/11/Letter-to-CFO-Glen-Lee-on-Commercial-Property-Vulnerabilities-11.14.22-final.pdf

Key highlights:
- Downtown commercial vacancy rate = 20%
- 137 out of the 733 largest buildings downtown are over 25% vacant and that is expected to rise to 238
- DC budget wrongly assumes the commercial vacancy rate will decline
- Investment in commercial real estate in DC is dead, properties cannot be sold and many are distressed

The implications of the letter are that DC real estate investors are going to start demanding reassessment of property taxes purposes and that the assumptions underpinning commercial property tax rates are wrong and when this happens it will seriously negatively affect DC’s budget. They are saying that the city needs to plan now.

This article, which includes an interview with one of the co-signers of the letter is even more alarming.
https://www.bisnow.com/washington-dc/news/office/office-owners-say-dc-faces-economic-disaster-due-to-lost-tax-revenue-116571

Key Highlights:
- Placing hope on residential conversions is not viable, because it would first require ”devastation”
- The process of reaching such a loss would significantly hurt DCs finances and the resulting residential property would further hurt DCs finances because it’s taxed at a lower rate
- Conversions are expensive and there is zero appetite for financing right now (all conversions underway were financed before rates went up)
- The Federal government is also reducing its office footprint at the same time as not aggressively requiring workers to return in person
- DC is headed for a fiscal cliff in 2024 when stimulus funds expire right as the lower valuations will hit the budget
- At that stage major cuts in services would be required or else there is a risk of a return of the Control Board

Yikes!

[Anonymous]

PLEASE bring back a Control Board. I hate not having a vote in Congress, but I really can't stand watching this ridiculous mayor and the city council focus on the wrong things.

[Anonymous]

Gee, I wonder what could have been the catalyst for these issues since the Spring of 2020?

[Anonymous]

Anonymous wrote:Gee, I wonder what could have been the catalyst for these issues since the Spring of 2020?

Yeah I agree there are issues but aside from making a speech stomping her foot telling businesses to make everyone go back to the office like Eric Adams did, there’s not a lot she can do about it.

[Anonymous]

DC is too big to fail.

[Anonymous]

Now of all the things I read here, this one worries me re: real estate and valuations and the future of the city

[Anonymous]

Anonymous wrote:DC is too big to fail.

Someone wasn’t here in the 80s

[Anonymous]

Anonymous wrote:I am not sure why this hasn’t gotten more attention, but holy cow Tony Williams and the Federal City Council just send the DC Govt a letter that the equivalent of a nuclear bomb. The letter was addressed to the CFO, probably for the optics of Williams not directly criticizing Bowser, but I’m not sure how it can be interpreted as anything but a shot at Bowser.
https://www.federalcitycouncil.org/wp-content/uploads/2022/11/Letter-to-CFO-Glen-Lee-on-Commercial-Property-Vulnerabilities-11.14.22-final.pdf

Key highlights:
- Downtown commercial vacancy rate = 20%
- 137 out of the 733 largest buildings downtown are over 25% vacant and that is expected to rise to 238
- DC budget wrongly assumes the commercial vacancy rate will decline
- Investment in commercial real estate in DC is dead, properties cannot be sold and many are distressed

The implications of the letter are that DC real estate investors are going to start demanding reassessment of property taxes purposes and that the assumptions underpinning commercial property tax rates are wrong and when this happens it will seriously negatively affect DC’s budget. They are saying that the city needs to plan now.

This article, which includes an interview with one of the co-signers of the letter is even more alarming.
https://www.bisnow.com/washington-dc/news/office/office-owners-say-dc-faces-economic-disaster-due-to-lost-tax-revenue-116571

Key Highlights:
- Placing hope on residential conversions is not viable, because it would first require ”devastation”
- The process of reaching such a loss would significantly hurt DCs finances and the resulting residential property would further hurt DCs finances because it’s taxed at a lower rate
- Conversions are expensive and there is zero appetite for financing right now (all conversions underway were financed before rates went up)
- The Federal government is also reducing its office footprint at the same time as not aggressively requiring workers to return in person
- DC is headed for a fiscal cliff in 2024 when stimulus funds expire right as the lower valuations will hit the budget
- At that stage major cuts in services would be required or else there is a risk of a return of the Control Board

Yikes!

Probably true of homeowners too. The city's assessments are way out of whack with the market...

[Anonymous]

Anonymous wrote:

Anonymous wrote:Gee, I wonder what could have been the catalyst for these issues since the Spring of 2020?

Yeah I agree there are issues but aside from making a speech stomping her foot telling businesses to make everyone go back to the office like Eric Adams did, there’s not a lot she can do about it.

uh yeah, there's a ton dc and our woke council and residents could do. Stop acting like our city is a 'favor' to people and accusing them of being pearl clutchers with valid quality of life concerns for one. In NY they are working on involuntary holds for folks with mental health issues who can't care for themselves... now there's an idea! How about more crime cameras and task forces? Ahhhh.... Oh, how about cutting the incentives for landlords to sit on empty buildings and wash tax revenue through. Hmmm.... And how about not being so cavalier as Federal buildings move to the suburbs. Yeah...

[Anonymous]

Anonymous wrote:

Anonymous wrote:DC is too big to fail.

Someone wasn’t here in the 80s

Who was in charge at that time? Republicans?

[Anonymous]

Anonymous wrote:PLEASE bring back a Control Board. I hate not having a vote in Congress, but I really can't stand watching this ridiculous mayor and the city council focus on the wrong things.

+1

30-yr District resident who moved here in the Barry days, pre-Abe Pollin

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am not sure why this hasn’t gotten more attention, but holy cow Tony Williams and the Federal City Council just send the DC Govt a letter that the equivalent of a nuclear bomb. The letter was addressed to the CFO, probably for the optics of Williams not directly criticizing Bowser, but I’m not sure how it can be interpreted as anything but a shot at Bowser.
https://www.federalcitycouncil.org/wp-content/uploads/2022/11/Letter-to-CFO-Glen-Lee-on-Commercial-Property-Vulnerabilities-11.14.22-final.pdf

Key highlights:
- Downtown commercial vacancy rate = 20%
- 137 out of the 733 largest buildings downtown are over 25% vacant and that is expected to rise to 238
- DC budget wrongly assumes the commercial vacancy rate will decline
- Investment in commercial real estate in DC is dead, properties cannot be sold and many are distressed

The implications of the letter are that DC real estate investors are going to start demanding reassessment of property taxes purposes and that the assumptions underpinning commercial property tax rates are wrong and when this happens it will seriously negatively affect DC’s budget. They are saying that the city needs to plan now.

This article, which includes an interview with one of the co-signers of the letter is even more alarming.
https://www.bisnow.com/washington-dc/news/office/office-owners-say-dc-faces-economic-disaster-due-to-lost-tax-revenue-116571

Key Highlights:
- Placing hope on residential conversions is not viable, because it would first require ”devastation”
- The process of reaching such a loss would significantly hurt DCs finances and the resulting residential property would further hurt DCs finances because it’s taxed at a lower rate
- Conversions are expensive and there is zero appetite for financing right now (all conversions underway were financed before rates went up)
- The Federal government is also reducing its office footprint at the same time as not aggressively requiring workers to return in person
- DC is headed for a fiscal cliff in 2024 when stimulus funds expire right as the lower valuations will hit the budget
- At that stage major cuts in services would be required or else there is a risk of a return of the Control Board

Yikes!

Probably true of homeowners too. The city's assessments are way out of whack with the market...

Really? I haven't seen the residential real estate market soften at all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Gee, I wonder what could have been the catalyst for these issues since the Spring of 2020?

Yeah I agree there are issues but aside from making a speech stomping her foot telling businesses to make everyone go back to the office like Eric Adams did, there’s not a lot she can do about it.

uh yeah, there's a ton dc and our woke council and residents could do. Stop acting like our city is a 'favor' to people and accusing them of being pearl clutchers with valid quality of life concerns for one. In NY they are working on involuntary holds for folks with mental health issues who can't care for themselves... now there's an idea! How about more crime cameras and task forces? Ahhhh.... Oh, how about cutting the incentives for landlords to sit on empty buildings and wash tax revenue through. Hmmm.... And how about not being so cavalier as Federal buildings move to the suburbs. Yeah...

This has been universally derided, particularly by the police who have no professional qualification to make this judgement.

By your standards, they could say anyone wearing a MAGA hat isn't competent to operate in our society.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Gee, I wonder what could have been the catalyst for these issues since the Spring of 2020?

Yeah I agree there are issues but aside from making a speech stomping her foot telling businesses to make everyone go back to the office like Eric Adams did, there’s not a lot she can do about it.

uh yeah, there's a ton dc and our woke council and residents could do. Stop acting like our city is a 'favor' to people and accusing them of being pearl clutchers with valid quality of life concerns for one. In NY they are working on involuntary holds for folks with mental health issues who can't care for themselves... now there's an idea! How about more crime cameras and task forces? Ahhhh.... Oh, how about cutting the incentives for landlords to sit on empty buildings and wash tax revenue through. Hmmm.... And how about not being so cavalier as Federal buildings move to the suburbs. Yeah...

This has been universally derided, particularly by the police who have no professional qualification to make this judgement.

By your standards, they could say anyone wearing a MAGA hat isn't competent to operate in our society.

No it hasn't. Taking the mentally ill to a hospital is the right thing to do. It's actually cruel to pretend that a person with full-blown schizophrenia is making a "free choice" to live in filth under a bridge. DC should follow NYC on this one.

[Anonymous]

Anonymous wrote:PLEASE bring back a Control Board. I hate not having a vote in Congress, but I really can't stand watching this ridiculous mayor and the city council focus on the wrong things.

The good old days, when DC residents had even less self-government...