Posts about DMPED

DC tech firms benefit from DC's investments in the creative class

The District didn't just suddenly become an attractive place for talented young people to live. That transformation took years of investments, often at the expense of other priorities. DC is still making these investments, and needs to keep funding them.

Buying more Circulator buses and streetcars and operating them on more routes is costly. Building more cycle tracks and multimodal streets requires money. Renovating more schools, extending library hours, and investing in mixed-use development projects like St. Elizabeths and Walter Reed is expensive but critical to attracting and retaining a world-class workforce of knowledge workers.

The payoff from these investments is that DC has experienced the largest domestic population growth of any state, and the fastest growth of creative class jobs of any large metropolitan area. Creative class workers are the knowledge workers in demand by many of the fastest-growing companies, including tech companies like LivingSocial.

That's why just over half of LivingSocial's employees already live in DC, whereas 30% of employees at other DC employers live in DC. LivingSocial isn't hiring them for charity, they're hiring because DC residents are excellent employees. This is a fact that's widely recognized, every DC tech company I know hires DC residents in at least half their positions.

One investment that would grow our workforce of knowledge workers to have LivingSocial grow further. DC could invest in LivingSocial's growth, but is instead offering $32.5 million for LivingSocial to simply stay in DC. They don't have to actually add any new positions to get this money.

That approach to attracting and retaining companies, known as location subsidies, is practiced by states who can't offer a 21st century workforce because they haven't invested in one.

Richard Florida, whose book The Rise of the Creative Class has shaped urban development strategies for a decade, opposes a location subsidy for LivingSocial for the same reason:

I am fan of high-tech companies and very much like what LivingSocial does. But they are already leveraging the enormous historic investments made in DC over decades to become an attractive city with extraordinary quality of place that attracts highly skilled creative class workers. They don't need the subsidy and our cities and states need to put a stake in the ground and stop this corporate welfare. I doubt they'll leave the region anyway. Where would they go?

The DC Council should demonstrate the same faith in DC's ability to attract companies for the right reasons—our 21st century workforce—as Florida does. They should require LivingSocial to add jobs, particularly product development jobs that attract creative class workers, in order to receive a subsidy.

Chicago required job growth in return for Groupon subsidy

Groupon, LivingSocial's primary competitor, did not a get location subsidy from Chicago. Instead, Chicago offered Groupon $3.5 million on the condition that Groupon add 250 new jobs.

If the LivingSocial subsidy were similarly structured, DC would see 2,321 new jobs at LivingSocial in return for its $32.5 million subsidy.

Furthermore, Chicago's subsidy to Groupon is in the form of income tax and training credits. That ensures that Chicago doesn't subsidize a company that is losing money and perhaps about to go bankrupt.

$15 million of the proposed LivingSocial subsidy is in the form of property tax credits, which it receives whether it makes money or not and could receive right before a bankruptcy.

Why should the DC Council give LivingSocial a far better deal than Chicago gave to Groupon? The DC Council should only provide income tax credits to LivingSocial, or at least limit an annual property tax credit to the size of its income tax credit.

Let the DC Council know that we can't afford location subsidies at the expense of crucial investments to build a city that attracts a 21st century workforce. LivingSocial should have to add jobs, particularly product development jobs, in order to receive a subsidy—just like Groupon did. This will ensure the continual contribution of LivingSocial's growth to DC's rise as a creative class hub.

How the current deal works

The $32.5 million tax deal being offered to LivingSocial would come from a $17.5 million income tax credit and a $15 million property tax credit. Both tax credits would be available beginning in 2016.

The income tax credit requires that DC residents make up 50% of any new employees hired the year previous to the credit, beginning in 2014, even if they are just replacing employees who turn over. If DC residents make up less than 40% of new employees, they still get a $9 million credit.

LivingSocial also would receive a $10,000 property tax credit for each new employee hired from 2010-2015. While this sounds like a requirement to hire 1,500 people to get the full $15 million credit, LivingSocial has already hired 1,000 employees since 2010, and is expected to hire at least another 100 through 2015 through turnover.

In other words, LivingSocial is guaranteed a large part of the property tax credit, even if they never hired another employee from today on.

The DC Council should make the following changes to this legislation to ensure that we are spending $32.5 million to build DC's tech sector, not just to retain a company.

Require hiring of DC residents in order to receive any subsidy

In the current deal, LivingSocial gets the full subsidy if 50% of its future hires are DC residents. It will collect most of the subsidy if it hires 40% District citizens.

It LivingSocial hires less than 40%, even 0%, of its future employees from DC, it still gets $18 million.

There should be a floor—say 35% of new employees—of DC residents hired below which no subsidy is given. Alternatively, LivingSocial could receive credits that scale based on the percent of new employees that live in DC.

Tie credits to new positions, not new employees

My company receives training subsidies from the states of Oklahoma and South Carolina that are tied to new headcount. That makes a lot of sense. DC should do the same thing.

Currently, the deal allows LivingSocial to count replacement employees toward its hiring count. This means that the company could actually shrink, and as long as 50% of the employees they hire to replace people who quit or are fired are DC residents, they will receive $28 million.

It makes no sense to give a company more subsidy the higher their turnover is. Turnover should not be rewarded; added positions should. DC residents currently comprise a little over half of LivingSocial's DC workforce. If their turnover is high, they could very easily receive most of the tax credit without employing any more DC citizens than they currently do.

There actually seems to be a lot of confusion on this point. Councilmember Michael Brown, whose chairs the Economic Development Committee, tweeted last week that the deal requires LivingSocial "to hire and retain a certain number of DC residents." After being corrected, he removed the tweet.

The mayor's description of the deal appears to be contributing to the confusion.

The proposed legislative package projects that LivingSocial will create and retain 2,000 jobs at the company. In order to claim all benefits included within the package, at least 50 percent of LivingSocial's new hires will have to be District residents. LivingSocial is estimated to generate $166 million in tax revenue to the District over the next 10 years.

The mayor estimates LivingSocial will pay $166 million in tax revenue, but that estimate appears to assume the company will create 2,000 jobs. But the deal doesn't require the company to grow at all. District officials have declined to provide the formula they used to reach this estimate.

Require product development to remain in DC, and any potential buyer to abide by commitments

After seeing our previous article, hearing from our readers, and sitting down with me, LivingSocial agreed to "codify our intent to maintain DC as our technology center." This is excellent news, and a sign that LivingSocial is committed to working with residents to make this a win-win deal.

This commitment needs to make it into the legislation, though. And any future buyer of LivingSocial needs to be bound by the same commitments during the tax abatement period (through 2025).

Otherwise, a company like Groupon could acquire LivingSocial in 2017, right after DC has given them significant tax credits, and move all product development jobs to Chicago where Groupon is based.

The lessons we have learned from previous subsidies is that they work when they are targeted to yield specific knock-on benefits, like development of a depressed part of town or a particular sector. The LivingSocial subsidy is an exciting opportunity to grow our tech sector, but the council has to ensure it's actually targeted to yield that benefit.

Ultimately, Gray's mayoralty will leave a lasting effect on the budget and city services, and residents, whether they voted for and endorsed Adrian Fenty (as I did) or Gray, should care a great deal about what the capable people in the administration, unconnected to the campaign or any campaign finance, are doing.

We've also yet to find out whether the mayor himself was part of any illegal activity or knew about it. Based on what we know thus far, it appears that Gray made some very poor choices about whom to trust early on. Since then, he's replaced most of these poor hires with better staff, who are better at sharing the administration's positive accomplishments, such as:

One City One Hire

The administration's program to help unemployed residents find jobs has now suc­cee­ded in getting employers to hire 3,000 unemployed District residents in the past year.

There are numerous obstacles to getting people into jobs, but employers' lack of trust in DC's jobless has been among the most intractable. One City One Hire officials work to restore this trust by personally vetting resumes of unemployed DC residents and asking employers to consider a couple of handpicked resumes for each opening.

Some feel that this is what the Department of Employment Services (DOES) was supposed to be doing all along. This is technically true. It's also true that DC Public Schools are supposed to be properly educating our children. We shouldn't withhold credit where credit is due when DCPS or DOES fulfills its mission.

Sector-specific economic development

Under previous administrations, the Deputy Mayor for Planning and Economic Development was concerned almost exclusively with real estate deals. Although targeted real estate deals are important, only Mayor Gray has really invested in developing other sectors that are strategically important to the city.

The Mayor's broader focus has produced new positions critical to the city's economy, even if the officers filling those positions often operate behind the scenes. For example, newly hired DMPED officials regularly meet with leaders of the technology, government contractor, and health care communities to align identify ways DC can support these strategically important sectors.

A newly reconstituted Workforce Investment Council, whose executive director Alison Gerber was recruited from the Aspen Institute, has made it clear that workforce development dollars must be targeted to high demand sectors. As a result, for the first time, workforce development in DC is no longer scattershot, with the Gray Administration targeting key sectors.

DOES has cut off funding to several training providers whose training wasn't aligned with these sectors. A new Workforce Intermediary will ensure that the needs of hospitality and construction employers are addressed by training providers.

Continued capital investments without raiding city's reserves

DC residents were aware of the many capital improvements made under former Mayor Fenty, but fewer were aware that Fenty drew down the "rainy day" fund of $700 million to pay for some of these improvements.

Mayor Gray has continued the pace of capital improvements, with renovations of Takoma Education Campus and Woodson, Cardozo and Anacostia High Schools. While maintaining the pace of the previous Administration, Mayor Gray has managed to replenish our reserve fund, bringing it up to $1.1 billion.

Sustainability plan

If you haven't seen the objectives Mayor Gray set for 2032 in his Sustainable DC plan, then you should take a look. These objectives should provide the basis for numerous DC government initiatives over the next two decades covering issues as diverse as our food supply and obesity, along with transportation, tree canopy, and waste.

For some these strategic plans and objectives may seem mere feel-good talk, but these objectives matter. Historically, DC government has looked to such comprehensive plans and small area plans in designing legislation and framing countless policy debates in subsequent years.

Cameras and parking

Study after study proves that traffic cameras save lives. Mayor Gray significantly expanded traffic cameras in this year's budget, a politically courageous move that will continue DC's trend of lower and lower traffic fatalities.

While the DC Council created visionary pilots in performance parking, the previous administration never made it much of a priority to adjust meter rates to manage curbside space effectively. The Gray administration has expanded performance parking and made it clear this is a priority.

Continued momentum in education reform, streetcars and bike lanes

Some predicted that education reform, the streetcar and bike lanes would stop under Mayor Gray. Let's be clear: that hasn't happened. Mayor Gray has increased the investment in streetcars, pledging $100 million in capital funds starting last year.

The pace of bike lane construction slowed a bit at first, but DDOT is now putting in bike lanes on many streets throughout the city, and is on track to build the L Street track this summer and M street soon after. He even vociferously defended Capital Bikeshare over Twitter to skeptical New York reporters.

Finally, Mayor Gray has continued the process of education reform, despite the fears of many DC residents. Teachers are still being evaluated and sometimes fired based on performance, not on seniority.

The Gray administration's education reforms have included important initiatives which haven't received the same attention and publicity accorded the teacher firings. The administration has already made strides toward improving our special education system and opened multiple Early Stages centers aimed at early identification of kids with special needs. These investments have reduced by 20% the number of children bused, at DC's expense, to non-public special education, saving significant money.

I'm not nominating Mayor Gray for sainthood, but residents need to reexamine the fairly widespread belief that the administration is not getting anything done. While Adrian Fenty was very good at getting press attention for his actions, this administration is acting more quietly.

We should condemn any illegal behavior from the campaign, but we must also give the mayor and his staff credit for the ways the administration is making DC greater for the long term.

First wave of subsidies reap healthy return

Most pre-recession subsidies were made through tax increment financing (TIFs), in which future gains in sales and/or property taxes from a development are used to repay bonds that finance a developer subsidy.

Each of these TIFs are repaying to the city well ahead of schedule, providing needed funds for schools, social services and other cash-strapped priorities in DC.

Many of these projects were harshly criticized at the time as corporate giveaways. So the speedy repayment of these subsidies lends credibility to the arguments of their proponents, such as Councilmember Jack Evans and former Mayor Williams, and to TIFs in general.

Project	Year	Subsidy	Performance
Spy Museum	2001	$6,900,000	Paid in 2007 instead of 2014
Gallery Place	2002	$73,650,000	Returned $15,175,861 to city above debt payments
Mandarin Oriental Hotel	2002	$46,000,000
Embassy Suites	2003	$11,000,000	Paid in 2011 instead of 2016
DC USA	2004	$40,000,000	Estimated to be paid in 2015 instead of 2026
Capitol Hill Towers	2006	$11,500,000	$2.4 remaining, matures in 2029

These TIFs were successful because they were designed in accordance with two principles of effective corporate subsidies. As will be seen below, present-day corporate subsidies haven't always followed one or the other of these two principles.

1) Focus on knock-on benefits: Advocates for corporate subsidies often appeal to the tax revenue that would be lost if a developer doesn't build a building or a company chooses not to locate in one's city. Successful subsidies, however, are more focused on knock-on benefits that are strategically important to a city's finances.

Granting subsidies so that a company's activities—developing a property, locating in one's city—will yield tax revenue only encourages rent seeking by all companies who develop a property or choose to locate in the city.

When the desired activity is to locate in one's city, a "race to the bottom" ensues between states which only hurts their collective ability to pay for education and social services.

That's why effective subsidies are designed to yield knock-on benefits that support a city's strategic goals, like developing a particular sector or a particular part of the city.

The first wave of TIFs were intended to steer the development of downtown away from office buildings and towards multi-use. As Councilmember Evans explained it, "The highest [revenue] use is an office building but then you end up with a Crystal City complex which I can't stand."

The knock-on activities—more downtown residents and more downtown shoppers—the downtown TIFs triggered are not only strengthening those investments, but also producing tax revenue from downtown in many other forms. That's what happens when knock-on benefits are the goal, not the direct tax revenues of an investment.

2) Narrowly target subsidy to yield knock-on benefits: There are always risks with corporate subsidies. The company could pick up and leave without it, or maybe they would have completed the project even without the subsidy.

That's why it's critical to limit a city's exposure. Subsidies are investments, and investments have risks. The DC CFO narrowly targeted the first wave of TIFs to be only as much as is needed to stimulate the intended knock-on benefits for the city.

For each TIF application, the CFO conducted a gap analysis. This analysis compares the amount of private financing that should be available for a development to the costs of the project. The CFO would only certify TIFs at that subsidy amount. The head of economic development finance for the DC CFO, John Ross, explained the process this way:

CFO had to do a certification, and that certification had to include a list of issues. One of them was whether the TIF would cover the debt service payments. One was whether the project would move forward without government support. One was the level of benefits of the TIF that would go to the community. Without that, the TIF could not even go to the Council.

While time-consuming, such a process ensures that subsidies are narrowly targeted to yield the benefits intended.

Present-day subsidies often veer from principles of early TIFs

If the District's first corporate subsidies have reaped such healthy returns, several present-day subsidies veer from the principles behind the successful subsidies.

Some recent large TIFs, like Southwest Waterfront and O Street Market, as well as the proposed LivingSocial tax break, don't follow these principles.

There has been no financial gap analysis for more recent TIFs. Without ensuring that any financing gap actually exists, DC doesn't know if development projects would have happened anyway and it risks overpaying.

The first wave of TIFs were granted under the TIF Authorization Act of 1998 which required a thorough financial analysis and certification by the CFO.

Though no longer empowered to certify TIFs, the CFO still provides financial assessments of TIF applications to the Council and Mayor. These assessments raised particular concerns about 2 TIFs: City Market at O Street and the Southwest Waterfront.

Project	Year	Subsidy
City Market at O Street	2008	$46,500,000
Southwest Waterfront	2014	$198,000,000

The CFO, in his assessment, complained that both the O Street and Southwest Waterfront TIFs were being granted with less information about the project than would be required to issue a complete financial evaluation. There were no final plans or cost estimates for either project.

In fact, neither application included a specific financial commitment from the private developer, making impossible any analysis of the necessary size of the subsidy. The O Street application said that the developer for the hotel hadn't even been identified yet, even though the hotel was supposed to provide 44% of the incremental tax revenues to repay the bond.

While the CFO's office was included in negotiations with the developers after raising concerns in their analyses, the process for granting these TIFs was clearly intended to increase speed at the expense of financial scrutiny.

More recently, the proposed LivingSocial subsidy of up to $32 million to remain and consolidate their operations in the District also veers from proven principles of corporate subsidies.

Proponents of this subsidy often appeal to the tax revenues from LivingSocial that will far exceed this subsidy. Paying for tax revenue, however, only rewards companies who threaten to leave while encouraging a race to the bottom between states competing for companies.

The LivingSocial proposed subsidy is intended to be targeted. The subsidy doesn't begin until 2015 and scales based on the number of DC residents employed, which must be at least half of LivingSocial employees.

But are these jobs that we should be paying for? They aren't strategically aligned with the needs of the city's unemployed, and most of the jobs won't contribute to building a tech sector.

According to a source, only 15% of LivingSocial jobs are in technology, IT, and product development. A subsidy that was targeted to generate knock-on benefits that are strategically important would thus focus on retaining that 15% of LivingSocial positions.

The debate around corporate subsidies is too often dominated by loud voices at the extremes. But experience shows that corporate subsidies can work, and they can also be a waste of precious dollars.

The next time you read of a proposed corporate subsidy, avoid these hyperbolic extremes and ask if the subsidy adheres to these two proven lessons for effective subsidies. If it does, defend the administration that proposes the subsidy, If it doesn't, as recent subsidies have not, then ask questions.

Just for comparison, $32.5 million is about the cost of modernizing an elementary school like Stuart-Hobson ($33.6 million). It's also roughly equivalent to the cuts Mayor Gray is proposing to the Housing Production Trust Fund, our best vehicle for promoting affordable housing ($38 million).

Before supporting the tax break, DC residents deserve to know specific benefits that these LivingSocial tax breaks will yield, and that they are more important than modernizing an elementary school or increasing the supply of affordable housing.

The proposed tax breaks reduce LivingSocial's property and income tax from 2015-2020 on a sliding scale based on number of DC residents employed. At least half of their employees must be DC residents for the tax breaks to kick in at all.

The vast majority of LivingSocial's employees are not engineers. Half of them work in sales and many work in transitional jobs writing copy for the deals.

These are good jobs, but they're not tech jobs, and don't contribute to a tech hub. The people who fill these jobs wouldn't necessarily work in technology firms after LivingSocial.

There are two unique things that LivingSocial or another tech company can bring to the District, and these essential elements are part of all successful tech hubs.

1. Smart money: The executives are good at innovation, and will start investing in other innovative companies if their company goes public or is acquired.
   
2. Smart engineers: The companies recruit and train very capable software engineers.

A deal that will benefit DC residents must be structured to retain smart money and smart engineers in DC.

Smart money, i.e. venture capital, is regional and is not confined to a particular county. So keeping LivingSocial execs who cash out and become venture capitalists in DC instead of Arlington doesn't seem worth paying $32.5 million for.

Smart engineers are another story. Most of LivingSocial's engineering openings are not in DC. Why not structure the tax breaks to target software engineers? Their presence in DC contributes to a larger tech cluster when they leave to work for other innovative tech companies.

The competition for smart engineers is intense in all tech hubs around the country. Even if LivingSocial, which currently loses hundreds of millions of dollars per year, doesn't find an exit strategy, DC would still benefit by the presence of hundreds of smart engineers looking to join innovative startups.

Apparently LivingSocial executives have told Deputy Mayor Hoskins and his staff that Virginia officials are courting them and that they are considering options such as Arlington. That shouldn't be a surprise. All corporate executives try to negotiate subsidies for jurisdictions where they have offices.

At the Tysons Corner software company I co-founded, we are frequently telling local officials where we have branch offices (Norman, OK and Charleston, SC) that we might move. We have received over $100,000 in subsidies over the past 3 years as a result.

But these cities only allow us to spend the subsidies we received on training for local employees in new positions that we add. That makes a lot of sense, because if we do leave, we will leave behind smart engineers who will go looking for jobs with similar companies.

Those jurisdictions are selling their locales based on value, not based on price. Such targeted incentives are what help build a cluster of related firms.

Reducing the corporate tax payments of a company that primarily hires salespersons and copywriters, on the other hand, doesn't appear targeted to yield any specific return. By comparison, spending that $32.5 million to modernize an elementary school or increase the supply of affordable housing feels like a more responsible choice.

DC councilmembers, who will consider the proposed LivingSocial tax breaks, should ensure that the tax incentives will actually help make DC a tech hub. Corporate subsidies and tax credits can benefit the District as long as the subsidies are vetted in a transparent, rigorous process that demonstrates specific benefits to DC residents. A tax break for LivingSocial could do that, but as it's structured right now, it wouldn't.

The Mayor's Office is continuing to negotiate with Dan Snyder and the Washington Redskins to build a training facility at Reservation 13. Until the outcome of the negotiations is determined, any development plans for Reservation 13 remain on hold.

Commissioners strongly pushed back that the community must be involved in the decision about a training facility on the site and expressed frustration that the Mayor is not seeking feedback from residents. Deputy Mayor Hoskins said that his office is not involved in the negotiations. ...

The Deputy Mayor said his office should know whether the city will pursue a training facility or continue with the current development plans in 30 days. If plans for a training facility do not move forward, he said that the city would return to development plans approved by the community. ... The Deputy Mayor also said that any training facility proposal would have to be consistent with the zoning for the site. ...

All 9 Commissioners, representing Wards 6 & 7, agreed that Mayor Gray needs to come out to the community and explain how a potential training facility fits into the master development plan agreed to by residents.

It's possible to vaguely imagine a way that a practice facility could be part of a mixed-use neighborhood. For example, the Redskins could build practice fields and any necessary parking entirely underground, then put surface streets, parks, and buildings on top of them. Their offices could occupy a building with ground-floor retail that's open to the public.

Dan Snyder could build all of this entirely with his own money, in this very urban way. But does anyone seriously believe that is possible? This is the guy who tried to charge people just to walk into his stadium instead of paying huge parking fees. Would he actually want to design practice fields that fit into a good neighborhood landscape when he has a perfectly good, entirely private facility in Ashburn?

Maybe if the District built the whole thing and gave it to him for free, he'd accept the deal, but it would be a terrible bargain for taxpayers. If he paid money for it, why would he want to spend extra money just to essentially make the facility invisible and unobtrusive?

Certain city leaders seem to believe that bringing the Redskins to DC is worth virtually any cost simply for the civic pride involved in having an NFL team inside one's borders. We know Jack Evans has a massive blind spot for organized sports. He abhors spending government money on anything except sports facilities, where the sky's the limit. We know that Michael Brown doesn't know any better. We should expect better from Mayor Gray.

Correction: The original version of this article had a sentence about criticism of DMPED. However, since Hoskins said the negotiations are not coming from his office, this is not relevant. The sentence has been deleted.

In its Planned Unit Development (PUD) application, the developer has asked for an exception from Inclusionary Zoning (IZ) on the library site (but not the fire station site), along with several other exceptions which often happen in PUDs. IZ requires offering 8% of housing units to households earning 80% Area Median Income (AMI) or less.

The developer, Eastbanc, and the Deputy Mayor for Planning and Economic Development (DMPED) claim that the entire value of the development rights are being used to pay for the new library and fire station, and there's no additional subsidy left over for the IZ units on the library site or more affordable units on the fire station site.

Originally, the District had promised 52 affordable housing units for very low income households (at 60% AMI) above the fire station site, but DMPED doesn't appear to be offering the needed additional subsidy for this component.

This is a big disappointment. We would prefer to see the District provide the financing to create the 52 very affordable units above the fire station. That would be far more beneficial than simply following IZ. At this point, unfortunately, the proposal is to give the library development with the 164 units above an IZ waiver, and to build housing above the new fire station, including the IZ units required for that fire station parcel alone.

The question of how to deal with the shrinking footprint of affordable housing in this complicated public-private development deal is a hot topic. Chris Otten, an organizer with the DC Library Renaissance Project, sent an alert asking people to attend tonight's hearing and oppose the project because of the affordable housing exception request.

We think this is short-sighted, and dismisses the value of the new library and fire station as major public benefits. A good compromise would be to move the IZ units to the fire station site, if DMPED does not come through with the financing for the preferable 100% affordable project above the fire station.

The PUD process does allow for outstanding public benefits, like a new library, to enable relief from IZ standards. The DC Office of Planning has accepted this, calling the new library and fire station exceptional amenities that fulfill the PUD's standard for allowing relief to some zoning requirements. We think it's possible that IZ could be part of a feasible project at the fire station site, if the Zoning Commission presses for it.

Some DC activists are fundamentally opposed to public-private partnerships, which leverage private development to help pay for public benefits. We share the concern that the public land valuation process should be more transparent so we can ensure city residents are getting a good deal. But better utilizing scarce land with great public facilities, new housing, and commercial space should also be recognized for the benefit that it is.

DC lost the opportunity to build mixed-use libraries at Benning Road and Tenleytown, both of which offered affordable housing and other amenities. These projects would have used funds budgeted for renewed public facilities and private development rights. In the West End case, where there's no budget to fix the library, the public benefits couldn't be clearer. If we do not advance this mixed-use project, we keep the obsolete library and fire station and wait for the city to find the money to pay to replace them one day.

We also lose the benefits a mixed-use building offers: a café connected to the library and separate community meeting space that can be used outside of library hours. These features were sought by residents discussing other library projects, but were unrealized as all other libraries were rebuilt as single-use, stand-alone buildings. A mixed-use building also better utilizes precious city space with hundreds of new homes and shops, within walking distance of downtown.

This is the essence of the notion of public land for public good. Rather than building a small replacement library on a city-owned plot, let's take full advantage of the site and add housing (especially affordable housing), a café, and other community amenities. On future public land deals, the Gray Administration should continue to ensure that the full value of a city-owned site is used—to create exciting new public facilities, and to create new places to live and work, especially more affordable places for those with limited incomes.

We have an important opportunity to create a state-of-the-art public library and fire station, save the city tens of millions of dollars, and deliver added benefits through an innovative mixed-use building design. That's why we should support this innovative project. For more, read my testimony to the Zoning Commission in support of the project.

In his November 15 testimony before the DC Zoning Commission on proposed car and bike parking regulations in the zoning code, Thomas said,

"I have recently spoken with representatives of several retailers who are interested in developing large, multi-tenant shopping centers in the District.... There are ... a number of locations in Ward 5 and other outlying Wards with blocks of land large enough to accommodate these developments, but without convenient access to Metrorail. Placing a cap on parking citywide, in a one-size-fits-all approach, would limit the desirability of these locations and have an adverse economic impact on the District."

We now know that Thomas was alluding to Dakota Crossing, with a planned 3,000 surface parking spaces, as well as the still developing plans for four Walmarts.

At the same time, Thomas knows very well what progressive urban infill looks like, and has helped usher it in during his tenure in Ward 5. Rhode Island Station, The Flats at Atlas District, and developments near Catholic University build on a multi- and mixed-use platform with retail space for small, local businesses.

While we continue to hear Thomas' lip service about the jobs and tax revenues that will be brought by new big boxes, our main streets continue to flounder. The Rhode Island Avenue Great Streets Initiative, for example, seems to have fallen off of DMPED's radar.

Can Thomas, who will have oversight of DMPED as Chair of the Committee on Economic Development, push for movement on a plan that could link the District's side of this important gateway with the revitalization that is happening just across the border in Mt. Rainier and Hyattsville?

While Brookland's 12th Street NE commercial strip received streetscape improvements, it still struggles to attract new businesses. North Capitol Main Street, Inc. continues to make strides in promoting local businesses, but will it find itself competing against a suffocating surge in big box, large-scale infill?

Will economic development East of the River under Thomas be focused on a blend of large- and small-scale development, or will bigger continue to be touted as better?

Thomas has proven an ability to work with developers and corporations on large projects. He knows the language of urban design and of Main Street commercial revitalization.

Unfortunately, a disconnect appears to exist between Thomas' advocacy for the bigger players and the smaller operators necessary to foster vital, dense cores in our neighborhoods. As he leads the Committee on Economic Development for the next four years, his actions will speak louder than words, particularly as we work our way out of the current recession.

Without a balance of both local and national retail outlets, small- and large-scale development, we will continue to see big box nodes favored to the detriment of our underutilized retail corridors, and we simply cannot afford that.

The city paid the developer half a million dollars in a legal settlement after Mayor Williams bungled the sale last time around, not seeking Council approval. Judging by online editorials and comments made at the meeting, homeless advocates, preservationists, and education advocates are united against the surplus action.

I myself testified on behalf of educational uses of the building, asking city officials whether they understand the public benefits of a downtown school. (I was a co-founder of a charter school that applied to use the Franklin School building and was rejected.)

Understandably, the renovation costs are high and the space is not ideally suited for young children. But that does not mean that the building could not house a high school, UDC law school, or some other educational facility that would honor the legacy of Cluss and draw students from all over the city to a flagship building in a central location. Regardless of which public use is determined to be best, we need a more thoughtful and transparent analysis before the city moves forward with the plan to surplus Franklin.

The historic protection of the building's interior and exterior and the many years of neglect will surely drive the renovation costs even higher. Seeking a private entity to take on the risk and covert the building to a revenue-generating use is understandable. So has someone run the numbers to show what the revenue stream will be net of tax abatements? Did the city have estimates of renovation costs (and did they share them with prospective bidders before the last Request for Offers)? Does the city have estimates of net employment and revenues that will be created by the best commercial use? These numbers would help DRES and DMPED make their case more than assertions about it being "costly" to renovate and that other uses are "not viable."

Someone described schools to me as "non-revenue generating" uses, but what about income and property tax revenue generated by residents who choose these schools over Montgomery County or Fairfax County schools and bid up the value of DC real estate? It's hard to know whether such revenues are a major or minor factor until you run the numbers.

A central location for a school is something that cannot be replicated by locating schools on the fringes of the city, as is now being done with many charter schools. A central location like Franklin Square provides a unique opportunity to draw students from all four quadrants to a racially and economically integrated school, and one whose stunning historic facade could house a flagship facility that would have symbolic value for the city. Has DRES or DCPS come up with a different site that could accomplish this?

What about the homeless? Has the city demonstrated that the savings from surplusing this building will make it possible to serve the needs of displaced homeless men somewhere else? Mayor Fenty asserted that this was the case when he closed the shelter two years ago. Perhaps the analysis is sitting out there somewhere and I haven't found it. If anyone has economic analysis supporting uses or alternative uses of the building, I'll update this post with links.