On Tuesday, the DC Council approved public financing for Union Market which included $36 million for parking and no money for a Metro entrance. At-large councilmembers Elissa Silverman and David Grosso unsuccessfully tried to move the money from parking to fund a new NoMa Metro entrance and affordable housing. Charles Allen (Ward 6), who voted against the amendment and for the parking funding, wrote a long response to unhappy constituents. Here is his explanation:
Thanks so much for the follow-up from Twitter to reach out with your email about Tuesday’s vote. I want to get you more information about it – and I’d be happy to give you a call as well if you’d like. I’ve heard from a few neighbors with questions and concerns, and I wanted to make sure I took the time to get back to you with my thoughts and reasons in the recent vote. This is a fairly long email, but projects and votes like this deserve much more than a tweet with 140 characters. After reading it, please let me know if you have any other questions I can help answer. I certainly respect if you disagree and would have come to a different conclusion, but I also want to make sure I do my best to help explain why I reached the conclusion I did.
I heard several different questions about the TIF during the debate, and I want to try to get you answers. But I also heard a lot of confusion about what the TIF is and what it can actually do, along with long-shot promises of how to rewrite this proposal. So I also want to get you facts – I think you deserve them.
Before I get into all the details, I want to let you know that I support the TIF for the redevelopment of the Union Market site – which is a nearly 45-acre site in Ward 5 with aging and failing public infrastructure but with plans for more than 3,000 new residential units and 500,000 square feet of neighborhood retail – because I believe that in many cases, including this one, tax increment financing (TIF) is an effective model to promote redevelopment. It’s a fairly common redevelopment financing tool, and many of our own neighborhoods in Ward 6 have benefited from this exact same type of investment. For example, the H Street NE corridor, the Southwest Waterfront, the Capital Riverfront and Navy Yard, and O Street Market in Shaw have all used TIFs to help with redevelopment, infrastructure, parking, and transit investments. In the case of Union Market, the overall TIF amount is approximately $82 million, with about $50 million going toward the large-scale infrastructure improvements, including non-automotive transit, needed on site.
During the debate on the bill, there was a particular amendment to redirect a portion of the TIF funds to reportedly build a new Metro station entrance that I want to address head on. As the only Councilmember that takes Metro to work each day, I depend on our investments in public transit. I’m the author of several legislative efforts to reduce incentives for parking, and rather, invest more in public transit options. And in fact, a new Metro entrance at the NoMa station is a project that I’ve been working on for several years and obviously strongly support. But the amendment offered yesterday wasn’t going to deliver on what it promised. First, the money it sought to set aside for a new entrance wasn’t even enough to pay for the project – leaving it nearly $10 million short. Second, it couldn’t have been used this way, as the entrance falls outside of the geographic area defined in law by the TIF. And third, even if the first two hurdles were cleared, borrowing money through a TIF costs the taxpayers more than if we funded this entrance through the regular capital budget process (which is how I’ve been working to fund this new entrance.)
During the debate, there were also concerns raised about a portion of the overall TIF being dedicated to off-street parking and whether that was the right decision to make related to our transportation planning. To be clear, the majority of the TIF funds are for overall infrastructure development and non-automotive transportation, which includes utilities, streetscape, sidewalks, pedestrian crossings, bicycle infrastructure, and more. Those non-auto investments will also follow a unified streetscape framework that was developed with the Office of Planning and Department of Transportation that ties multiple modes of transit into the development projects (but I think it's also pretty clear that they've done a pretty bad job of explaining to the public what that entails). And it’s a fair criticism if you feel those investments don't do enough –that’s also a criticism I share. I'd argue though that the tax financing legislation isn't the best way to achieve the stronger goals and I think we do it another way. But it is also true that significant portion of the funds are reserved to build off-street parking. I believe that transportation works best when we have several options. For comparison, I think about another project that was similarly-financed and needed a multi-modal approach to transportation: The Wharf on the Southwest Waterfront. The Wharf was created with new pedestrian boardwalks, public piers, dedicated bicycle lanes, plenty of wide sidewalks protected from traffic, lots of bicycle infrastructure, and yes, underground parking. I think that we need a mix of transit options in order to ensure the space works for as many DC residents and businesses as possible.
Every TIF project that I’m aware of has included funds to support off-street parking. In the past however, the TIFs have been used to finance a loan that is used generally by the development team and the funds are spread across the infrastructure needs. This TIF, for the first time I believe, added a new degree of transparency (which is a good thing) that put the parking costs upfront for all to see. But I absolutely think it's fair and appropriate to disagree and criticize these funds if you believe there should be no parking covered with TIF funds at all.
Separate from this TIF vote, I've been a leading voice on reimagining and rebuilding Florida Avenue to turn into a corridor that supports dedicated cycling, improves pedestrian access, and slower and reduced lanes for vehicles. Making our city – not just this neighborhood – more attractive to bike, metro, bus, walk, or get around by any means besides car is a key goal of mine. I am working hard to improve pedestrian access from the Metro to Union Market and I welcome your support in that endeavor. Not only do we need to create a new NoMa Metro station entrance, but DDOT must move more aggressively to rethink and rebuild the Florida Avenue NE roadway and streetscape as a whole. I don’t need to tell you the sidewalks are not safe and there is little bike infrastructure in place. I am working toward those improvements, and I need your help, but using TIF financing as proposed in the amendment was not the right way to get there. Again, I absolutely respect if you disagree with me, but I will always try to engage and help explain my decision making process, even if it’s different from your own.
During the days leading up to the vote, and immediately after as well, I heard several other questions about the proposed Union Market TIF. I’ve put more information below.
How does a TIF work?
Tax increment financing is a tool where the city uses the expected tax revenue increase (both property and sales tax) to pay the borrowing costs for a loan that is then used as part of the construction. The new tax revenue realized by the development is then used to pay off the loan, but the city must identify those borrowing costs in advance as a guarantee for the loan.
Did the District just agree to spend $82 million in public tax dollars?
Not exactly. The District is using the TIF to finance borrowing of $82 million. To allow it to move forward, the District has to guarantee $2.9 million in the event the new tax revenue isn’t realized by the new development (but the CFO has already projected that it will create enough new revenue to cover those costs).
Why does the Union Market TIF support parking?
Every TIF project that I’m aware of has included funds to support off-street parking. In the past however, the TIFs have been used to finance a loan that is used generally by the development team and the funds are spread across the infrastructure needs. This TIF, for the first time I believe, added a new degree of transparency that put the parking costs upfront for all to see. I think it’s also important to note that the infrastructure work will improve the land and utilities, which includes off-street parking, but also includes sidewalks, streetscapes, pedestrian improvements, bicycle infrastructure, and more. I don't think the city nor the development team have done enough to outline these plans and its certainly left the impression the TIF is only supporting car travel.
Don’t we need people to get to Union Market by ways other than cars?
Yes! I believe we can’t look at this as an “either/or”, but rather, as a “yes, and what more”. Not only as a daily Metro rider, but also as someone that recognizes its importance to our city, I have fought for dedicated funding to improve and expand service. I’ve been battling with DDOT to get our Florida Avenue redesign moving for a safer street and link between neighborhoods, rather than a speedway. I’m going to keep working for a new NoMa entrance. And I’ve continued the push for investments in our bike infrastructure. All of these aren’t going to be wrapped up into one amendment or bill, but they take a concerted and multi-pronged approach that many of us are working to achieve.
Why not use some of these funds for a new NoMa Metro entrance?
I have been and will continue to be a strong advocate to build the new NoMa Metro station entrance. It’s something I’ve been working toward for the last several years. But the amendment offered yesterday wasn’t going to deliver on what it promised. First, the money it sought to set aside for a new entrance wasn’t even enough to pay for the project – leaving it nearly $10 million short. Second, it was unclear if it was even allowed to be used this way, as the entrance falls outside of the geographic area defined in law by the TIF. And third, even if the first two hurdles were cleared, borrowing money through a TIF costs the taxpayers more than if we funded this entrance through the regular capital budget process (which is how I’ve been working to fund this new entrance).
Why not use some of these funds to create affordable housing?
The TIF isn’t an allocation of tax dollars, but rather, it’s financing borrowing. The dollars spent on this TIF next year are roughly $2.9 million. By comparison, the Council has put more than $100 million this year into the Housing Production Trust Fund to finance and leverage millions more for affordable housing. While it could be argued that the $2.9 million could be used to borrow more for affordable housing, please keep in mind that the $2.9 million is actually unrealized tax revenue at this point – meaning that unless the Union Market development gets built, the increased tax revenue isn’t actually generated.
I know this was a long email, but I think you deserve a full set of answers and as much information as I can share. As someone who has fought for investments in our city that build walkable neighborhoods, safer streets, and transit choices that support our communities, I will work with you to achieve what I think are shared goals. I hope this has been helpful, I appreciate your advocacy, and I certainly welcome any other questions you may have.