Posts about Jack Evans

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.

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.

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.

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.

Escalator reliability reaches 100%: Metro has achieved a new milestone for escalator maintenance. They have now reached a reliability rate of 100%; all escalators are currently broken at the same time. (Examiner, Matt Johnson)

Hop on I-395 PE: With Virginia's new program to sell naming rights to roads, Sudafed has proposed sponsoring all of Northern Virginia's congestion. (WBJ, Steve Offutt)

LOV-0 coming to a road near you: Google is reportedly working on a new program to design "passengerless cars," which will transport no people at all. In anticipation of this breakthrough, VDOT announced a plan to implement "Low-Occupancy Vehicle" lanes for their exclusive use. (Wired, Neil Flanagan)

DC4D4Thomas: DC for Democracy has endorsed Harry Thomas, Jr. as a write-in candidate for the Ward 5 special election. Members cited Thomas' consistency in talking about revitalizing the ward's main streets without making anything happen, creatively moving around money dedicated to serve youth, and his plan to solve transportation problems by setting up a series of Audi dealerships. (Geoff Hatchard)

Norton targets Wyoming: After several unsuccessful efforts to lobby state legislatures to support DC statehood, Eleanor Holmes Norton announced a new strategy to try to remove statehood from Wyoming, as it is smaller than DC. (DCist, Nick Clark)

Now, Jack Evans seems to have jumped on the bandwagon. According to ANC commissioner Nick Barron,

Evans is proposing a pilot program for at least part of ANC 2F that would make one side of a street for Residential Parking Permit (RPP) holders only for at least six days a week. The opposite side of the street would remain unchanged, with two-hour time limits except for RPP holders. I believe street sweeping rules will stay in effect.

Logan residents who would want to exempt their street from the pilot program would have an opportunity to do so, provided they supply a petition signed by a majority of residents on that block stating they do not want their block participating in the program. There would likely be a time limit on when such a petition needs to be provided.

If the program is successful in ANC 2F, it could be rolled out District wide.

Currently, all DC residential parking permits apply for an entire zone, which almost always corresponds with ward borders. There's no good reason for the zones to be so large; many other cities have smaller zones, and ward boundaries are fairly arbitrary, given that they need to move every 10 years to reflect changing populations even though the boundaries of communities don't shift.

Logan Circle is (now) at one edge of Ward 2. If this program also applies to all of Ward 2, it will amount to a major parking giveaway to people in Georgetown, Kalorama, Dupont and Foggy Bottom, at the expense of drivers living north of U Street (which is in Ward 1), Columbia Heights (also 1), Shaw (which is now in Ward 6), Mount Vernon Triangle (also 6), Bloomingdale and Truxton Circle (5), and other neighborhoods which are closer to Logan Circle than Georgetown and Kalorama.

In fact, Georgetown and Kalorama residents can already drive to Logan Circle and park near the Green Line all day with their Ward 2 stickers. This policy could exacerbate the practice as well.

Proposed post-redistricting ANCs for Ward 2. Image from the DC Office of Planning.

The stated purpose of the RPP system is to help residents park relatively near their homes, not to give residents of certain neighborhoods special priority to park near a special set of other neighborhoods. If this program is to actually advance such a goal, it must apply to a smaller zone.

The new ANC 2F could form an appropriate such zone. Give new "Zone 2, subzone F" RPP stickers to drivers living in the 2F boundaries. Limit the one side of each street to those holding these stickers. To avoid hurting people who live right next to the boundary, DC could also give the permits to anyone living, say, within 500 feet of the zone boundary.

This policy may also reserve spaces for residents so well that the spaces aren't filling up on all blocks. In that case, as I suggested for H Street, the legislation should let DDOT offer the extra space to non-residents for a fee, and dedicate some of the money to local improvements that help local businesses.

That's cheap and easy to do with the new pay-by-phone systems. All DDOT would have to do is put up signs that say, "Reserved for holders of 2F permits; others pay by calling 800-xxx-xxxx or at parkmobile.com." The rates for this space should be high enough that it doesn't just fill up the blocks and make space too scarce for residents once again.

Finally, why 6 days a week? Presumably this excludes Sundays. But Sunday is one of the days parking is in demand in Logan Circle. Given all the churches, it's actually the day of most demand, but there's also demand to park for the restaurants and shops as well. If the policy is going into effect, it should apply all the time, as the similar restrictions in other neighborhoods do.

ANC 2F is hearing about Evans' plan at its meeting tonight, which starts at 7 pm at the Washington Plaza Hotel on Thomas Circle.

Fearer and Brown are both part of the "51st State for Obama" slate. A number of candidates have formed slates, though slates have no official standing, and anyone is free to vote for whomever they like.

There are a few particularly recognizable names, but ones which voters should be wary of choosing: Councilmembers Marion Barry (Ward 8) and Jack Evans (Ward 2). They made some news yesterday with a controversial plan to bus supporters to the caucus.

There are delegate slots reserved specifically for elected officials, but these 3 councilmembers are also running against the masses, likely hoping to get into the convention without a fight over those other slots. Evans has been a delegate at all but one convention since 1992 and Barry is no stranger to the event.

Chuck Thies points out that sending Barry, in particular, creates a real danger of some sort of scandal distracting press coverage of the convention. That would remind national viewers of a side of DC that most residents would prefer not to emphasize, at a time when DC has so many positive aspects the delegates can highlight.

The national party conventions are a unique event that will surely be a thrill for those selected to attend. They will also provide a rare opportunity to tell DC's story and argue for full representation to engaged activists from around the country.

A good candidate must have all of these qualities at the same time:

• Ability to talk like a think tank expert about any policy issue;
  
• The right positions as viewed by every different issue group they court;
  
• Charisma so that voters "want to have a beer with" the candidate;
  
• Stamina to talk to voters nonstop, all day, every day for months, and politely listen to everyone no matter how crazy;
  
• Toughness to endure all manner of nasty treatment from opponents and voters;
  
• Willingness to ask for money, which if you've never done you can't possibly realize how hard it is;
  
• Expert management skills to hire a terrific team cheaply in just a few months;
  
• An absolutely squeaky-clean background;
  
• And much more.

If a candidate doesn't have one of these, we blame the candidate. They ran a lousy campaign. We just didn't like them personally. They don't know enough about the issues. Every candidate has a thousand ways to be a doofus.

With this set of expectations, it should come as no surprise that we get a fair number of candidates with particularly strong personal desire to acquire power. Those with ambition but who don't care so much about making the world better can survive this process and learn to sound caring enough about issues to get by on the issues, while most of those more motivated by love of their city find another career.

If winning is about being a good candidate, then the leaders we get are good candidates rather than good leaders. Wouldn't it be nice if, instead of a system that rewards the toughest and most ambitious, rewards those who actually have the best visions for the future? But that's a pipe dream.

It's important to be tough, not just to win office but to pass important legislation once in power. The attacks won't stop with the campaign, but continue into the policy debates. And leaders who take poor positions absolutely need to face criticism for those actions.

The campaign filing dustup only told us what we already knew about Greig, that she was a fairly inexperienced newcomer facing a seasoned veteran. Her dropping out did tell us something new, that she lacked at least one of the qualities we expect in a great candidate, the toughness.

We learned in this spring's special election that Sekou Biddle lacked the management component, at least at the time; Bryan Weaver lacked the fundraising capacity, Joshua Lopez lacked the policy expertise, and so on.

But ask yourself: Do you have all of these qualities? Do you have even half of them? And how many people have them all? Maybe Vincent Orange did; all he lacked was an interest in helping anyone but himself.

I think that a lot of the incumbents on today's DC Council ought to be replaced. A lot of people think that. This past summer, many people said to me, individually or in groups, that they were looking around for people to run for various offices. I've heard secondhand about many others searching for the same thing.

And in most cases, they came up short. Many names that had been thrown around as fantastic potential candidates didn't run. Some did, and as we get to know the candidates, we'll find out if any of them are really exciting, or all fall victim to one of the many pitfalls of a campaign, or get written off too early by the horse-race press coverage.

This is the reality of politics. Everyone knows it, and those that don't quickly learn. It's often a choice between the lesser of two evils. Often, if there's someone you're extremely excited about, they're a long-shot candidate because they don't excel in every one of the necessary criteria.

The main reason I'm particularly a fan of Tommy Wells is that he actually does have most of these qualities, at least in moderate measure. He's extremely good on policy, but also able to go to a community meeting or church or block party and mingle with everyone without quickly getting sick of it. He's pretty likable, but also fairly tough. He has hired some great staff. And so on.

He represents one of the best opportunities to get a politician who really cares about making better communities in DC, and can actually win elections as necessary to accomplish important things.

How many people can do that, and want to? We need more of them. At least 14: one per ward, 4 at-large, one chairman, and one mayor. Not to mention 436 representatives, 100 senators, 1 vice-president, 1 president, and countless state and local legislators all across the country. Where are they?

It was clear to us early that Greig (pronounced "Greg") could win. The demographic shift in Ward 2 since 2000 has been tremendous, and Evans has not really tried to connect with the new young residents to understand their concerns. Neither did Evans' last opponent, Cary Silverman. Evans beat Cary Silverman in 2008 and a ragtag collection of opponents in 2000 by only 1,500 out of a total of 5,000 votes.

The response of voters to Greig's door-to-door canvassing was overwhelmingly positive. Greig's message of retaining young families by improving school options, parks and transit while applying her consulting expertise to re-engineer DC agencies instantly resonated with these voters on doorsteps across the ward.

While he's raised way more so far ($233,000) than he had at the same point in the 2008 campaign ($160,824), he's raised much less from Ward 2 individuals so far ($36,200) than he had at the same point in the 2008 campaign ($55,931). Where's the money coming from then? For starters, one developer in Maryland gave Evans $6,000 ($500 from each of his separately incorporated properties) while Clyde's Restaurant gave him $3,500 ($500 from each separately incorporated restaurant location).

While Greig was going door-to-door connecting with voters, Evans pursued a very different campaign strategy. He hired a private investigator.

We found this out when Greig received a phone call from a journalist asking about a list of 40 fundraising targets inadvertently included in the first filing of her exploratory committee by a volunteer. Greig explained the context and the journalist decided the story wasn't newsworthy. We called the Office of Campaign Finance, who told us that a private investigator had requested the file.

The next day another journalist contacted us about the embarrassing file, Greig explained the context, and the journalist didn't run the story. It was clear that Jack Evans' full-time campaign staff was shopping the file they had received from their private investigator to different journalists.

Meanwhile, Greig received a call at her home by someone she met at a campaign event telling her that Evans' staff knows about her husband's divorce, and the problematic timing of his divorce vis-a-vis their wedding in November of last year. Obviously few people knew such personal details of her family's life.

Finally, Evans' staff found a journalist to run the story and release the file of fundraising targets. Particularly embarrassing in the file was the volunteer's note that one of the targets was a gay colleague of Greig's at McKinsey.

No mention was made about Greig's testimony earlier in the week to the DC Council on the alarming rise in hate crimes in the District. In fact, few journalists covered the hate crimes hearing at all. The minutiae of campaign missteps was more important than the rash of violence this summer against members of the transgender community.

Last week, I walked to Greig's house during all this drama, talking on my cell about the campaign to a colleague while I walked, and noticed a man walking close behind me smoking a cigar. When I stopped in front of Greig's house, he stopped. He then kept walking and then turned around to pace up and down her block about a dozen times. Greig's husband arrived later pushing Ella in a stroller, talking to friend on the phone. We told him about the investigator pacing the block and he came inside.

And that's just the intimidation from Evans' private investigator. Chair Anita Bonds of the DC Democratic Party, for example, refused to return our repeated phone calls and emails requesting to purchase enhanced voter data that the party resells to candidates. At the end of all of this, Greig considered her wonderful husband of one year, her beautiful new daughter, and decided that it wasn't worth it. I can't say I blame her.

Should she have expected these hardball tactics? Probably. But ask yourself this. How many other talented young individuals in DC have made the same decision to avoid politics? DC residents complain all the time about our councilmembers. But we can't complain about our representatives while defending the process that keeps better people from running.

It's a shame that Ward 2 voters now have no choice when it comes to their councilmember. I'm not discouraged, though. Every day it seems more and more District residents are fed up with politics as usual. I'm hoping to hear from others in Ward 2 who want a more inclusive government, and are more interested in digging through budgets than through an insurgent candidate's trash.

Not only would spending any taxpayer money on this scheme be extremely foolish, it's a bad idea even if the Redskins bought the land at market value and financed everything themselves, which they surely don't actually plan to do. In fact, having any Redskins facilities or stadium anywhere inside the District would be harmful to its future.

As DeBonis notes, Hill East, aka Reservation 13, is slated to become a mixed-use community with access to Metro on one side and the river on the other. Progress has been stalled due to the economy, but the economy will pick up, and the District needs to be thinking long term.

A practice facility occupies an enormous amount of land but employs or houses very few people. DC needs more taxpaying residents and more jobs, not big practice fields, weight rooms, and gyms for a small number of athletes. Maybe a couple rich ones will live in DC and bring their taxes, but how many really might? If they want to live in an urban area, they already can live here; if they don't, they won't anyway.

DeBonis suggests using some of the huge parking lots, which sit on federal land designated exclusively for recreation. But even this is a bad use of space. We could build playing fields for our residents and schools instead. There's already a skate park going into this area; suggestions from a recent Capital Business forum included adding a velodrome or rock climbing.

It's also worth thinking about the long term. Some of this land should become an extension of Capitol Hill, and 20 years from now, the feds might be willing to accommodate that. A 2006 NCPC study looked at the site, and suggested some mixed-use development and waterfront parks, along with sites for those memorials and museums every interest group wants to build these days.

DC's competitive advantage (and Arlington's) compared to the suburbs is that living in those jurisdictions is much more convenient. Most jobs are in DC and Arlington, and being central, they're mathematically closer to jobs in other jurisdictions than living anywhere else.

Transportation options are more numerous; there are more Metro lines, more bus options, and you're much more likely to be able to bike or even walk to work. More retail is within a short walk or bike or transit ride.

On the other hand, land is scarce; DC only has 68.3 square miles (and Arlington 26). Therefore, DC's best strategy is to use its limited space to attract as many residents and taxpaying jobs (not government and nonprofits) as it can. Football does neither of these.

Football teams only play in their stadiums 8 regular home games per year. Add a few other events, and it's still empty almost all the time. But when it's full, huge numbers of people come at once, and many will drive, requiring massive parking surrounding the stadium. Plus, football has a strong tailgating tradition, meaning people want those parking lots.

Dan Snyder, the Redskins owner, also makes a lot of money from that parking. He makes so much that he tried to charge people an extra fee to get into the stadium if they don't park, but rather walk in or come by shuttle from Metro. And he filed a high-profile nuisance lawsuit against one of DC's most valuable media organizations. So why are any DC leaders spending time on accommodating the Redskins?

Soccer, on the other hand, frequently uses urban stadiums worldwide that don't need much or even any parking. A DC stadium could be quite urban in its form. It hosts more games than football, though still far fewer than a baseball stadium or basketball/hockey/concert arena.

Advocates for a deal to keep United in DC say a soccer stadium will bring in economic development around the site, especially if it's at Buzzard Point, where 2 streetcar lines are planned to terminate. It'd be great to have United there, though the District still shouldn't spend any appreciable public dollars on it.

Mayor Gray tweeted, "We value DC United & hope they stay in DC. But District is in a challenging fiscal environment now & publicly funded stadium not possible." Gray (or his media team) emphasized in follow-ups that "no public $ has been expended on Redskins either," and, "Once again, we've put nothing on the table for Redskins."

Gray should hold that line and never offer anything to the Redskins. We can be sure that Evans and probably Michael Brown would love to, though. Evans even claims to be maniacally focused on keeping the District's budget lean, but has a giant blind spot when it comes to giving money to organized sports (or, for that matter, almost any development project, though at least those purport to bring in more tax revenue than the tax break is worth).

DC residents are better off with the Redskins in Prince George's County than inside the District borders. As this year's Council campaign heats up, voters should ask candidates if they believe in spending any public money on football, and be very wary of any candidate who says yes.

20 years ago the city was hemorrhaging residents and attracting few new residents to take their place. This damaged our tax base, and contributed to our fiscal problems.

Today, attracting new residents isn't a problem—retaining them once they have children is the new strategic challenge to growing our city's tax base. Schools, parks and walkable, livable communities are the issues that are critical to retaining these families and thus to growing our tax base.

One would expect that the DC Council would have pivoted to focus on schools, parks and walkable, livable communities. Yet we still have councilmembers who see parks and transportation as constituent services, not as the linchpins to improving our city's fiscal position. We have councilmembers who disengage from education issues instead of holding the Mayor accountable for outcomes in their Ward.

In Ward 2, parents aren't asked by their councilmember what would convince them to send their kids to their public schools. Their councilmember isn't engaged in the discussion on middle schools, despite the fact that half the elementary schools in Ward 2 feed into a middle school (Shaw) with 29% reading proficiency.

20 years ago the city was mired in bloated, slow-moving agencies that couldn't deliver basic government services. Today, DC agencies generally deliver the services that residents pay for with their taxes.

The challenge for the future is to deliver more with less through smarter government. Yet we still have councilmembers who believe that 5% across the board cuts will make government more efficient. Instead, we must look to re-engineer government processes to squeeze out waste and fraud in a targeted way.

Earlier this year, KPMG warned in an audit that conditions at the Office of Tax and Revenue were ripe for continued theft, and sure enough another theft was discovered last month. My own councilmember refuses to hold hearings on the conditions at the Office of Tax and Revenue, which is under his oversight. He says, "My job is to do oversight. It's not to catch people who are stealing".

Our council won't be able to effectively address this new strategic agenda while it's mired in the ethics scandals that have so tarnished the city's past. With this next election, it's time to send a message that conflicts of interest are no longer tolerated and that ethics scandals are not just embarrassing to the Council, but, more importantly, to residents.

My councilmember has not offered any ethics legislation and has said the problem the Council is facing "is not because the laws need changing." I couldn't disagree more. Even the General Counsel for the Board of Elections and Ethics says that "the ethics laws of the district are not sufficient."

Do you believe that the DC Council needs a bolder vision for the future? What do you believe the strategic issues are that the council must address?

Come out and let me know what you think tonight, Thursday, October 27th, 6:30 pm at Stoneys (1433 P Street, NW). I'll be there with others who want to move past ethics scandals and yesterday's news and start talking about the future of the District of Columbia.

Fiona Greig is a prospective candidate for the DC Council from Ward 2. The views in this article are hers and do not necessarily represent those of Greater Greater Washington. We invite all candidates running for the DC Council to share their views with our community, but reserve the right to edit posts to fit our content and format rules. If you are a candidate and would like to submit an article, please contact endorsements@ggwash.org.