Cross-posted from WAMU
by Julie Patel
No. 4 in the series: Deals for Developers, Cash for Campaigns
Development won the right to develop public land over two Metro stops after proposing one neighborhood receive a share of the property’s annual rental profit. The other would get 17,000 square feet of shops and restaurants.
Sweetening the deal for D.C.? The developer said no public subsidies were needed.
But years later, the developer scored a 20-year tax break worth millions of dollars. And the other proposed neighborhood benefits weren’t delivered.
What was delivered were campaign contributions to D.C. elected officials: more than $69,000 in the past decade, making Donatelli, along with its affiliates, among the top five contributors of 133 groups examined.
The Capper Carrollsburg project’s recreation center was demolished six years ago as part of a redevelopment and still hasn’t been replaced. (Photo courtesy of Anu Yadav)
Donatelli isn’t alone. A WAMU investigation of 110 D.C. developments that received $1.7 billion in subsidies found:
Flaws with benefits pledged for about half
A third missed requirements on hiring local businesses, or the city didn’t have paperwork for them
Another 15 percent downsized or delayed benefits, costing the city millions in lost revenue and others arguably didn’t need the subsidy in the first place
Less than 5 percent of the subsidies approved were for the city’s poorest areas, wards 7 and 8.
“They’re not bringing reinvestment to Anacostia but instead to places like Georgetown, K Street or Chinatown,” said Greg Leroy, executive director of Good Jobs First, an economic subsidies watchdog. “We’ve got to think strategically about where areas really need help. We can’t just think about who is writing the biggest checks.”
Developers receiving subsidies are typically required to provide public benefits such as jobs, affordable housing and parks. But the District didn’t track whether many of those benefits materialized. It has been slammed for it in several nationwide studies such as one last year by Pew Charitable Trusts, which found D.C. and 26 states do little or nothing to test the effectiveness of tax incentives to businesses.
“Who is benefiting is the ultimate question,” said Parisa Norouzi, executive director of Empower D.C. “What we’ve seen from a number of these…deals is that the developers are benefiting and the taxpayers certainly are not.”
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