Recording in progress.

Good morning, everyone.

I am Matt Freuman, Ward Three Council Member and Chairperson of the Committee on Human Services.

Today is Friday, April Twenty Four, Twenty Twenty Six, and we are meeting in person in room four twelve of the John A.

Wilson building in virtually via Zoom.

DEMPED executes the district's economic priorities and manages the city's portfolio of real estate development projects to spur economic development, increase housing, and grow the local workforce.

Demped also leads the district's business development, attraction, and retention efforts.

Like many agencies, DEMPED was affected by the challenges of the current fiscal environment.

Its FY27 operating budget faces a top-line cut of $10.6 million from $50.2 million to $39.6 million.

The economic development program incurs nearly all of those cuts with the budget reduced from $35.1 million in FY26 to $24.9 million in FY27.

Demped's proposed capital budget for FY27 is $296.7 million, an $11 percent reduction from its FY26 approved capital budget of $333.4 million.

The mayor's proposed FY27 Budget Support Act includes more than a dozen subtitles related to DEMPED, many of which we will discuss here today, including changes to existing incentives for downtown, as well as new tax abatements targeted towards workforce housing and the development of WAMATA and Federal properties.

Other council committees will hold budget oversight hearings for those agencies over the next two weeks, and we will not be discussing their budget changes during this hearing.

I look forward today hearing from district residents, local businesses, developers, and deputy mayor Alpert about how the FY27 budget will support the continued economic growth of the district and the impact of proposed budget cuts on DEMPED's ability to achieve its mission.

Do we have any colleagues on Zoom?

No.

All right.

When I call your name, please come to the table at the front and sit in the order in which you are called from your right to your left.

Please press the button on your microphone before speaking to turn on your mic.

The red light indicates that your mic is on.

After a panel is done providing testimony, I and other council members, if they join, may ask questions before calling the next panel.

After hearing from our in-person witnesses, we will turn to our virtual witnesses.

After hearing from all our public witnesses, we will have a brief 30-minute recess before commencing with testimony and questions from our government witness.

Witnesses.

Ashley Ruff, June Crenshaw, Ben Jesse.

Jessica Nyun.

Should I keep okay?

All right, Ms.

Crenshaw, when you are ready.

Good morning.

And thank you, Councilmember, for the opportunity to speak today.

My name is June Crenshaw, my pronouncer She, Her Hurst, and I'm the Deputy Director for Capital Pride Alliance, the organization that produces Pride, including the Parade Festival, and last year World Pride.

I want to emphasize two key points.

Pride is a major economic driver for the district, and it's essential to visibility and safety for our queer community.

The economic data is clear.

Last year, World Pride generated $310.7 million in total economic impact, including $75 million in lodging, $36 million in retail, $55 million in dining, $15 million in entertainment, and $25 million in tax revenue.

This is direct, measurable return to the city.

And the impact is consistent.

Our 2021 economic report found 371 million in regional impact.

Conservatively, that translates to approximately 245 million to DC alone.

Pride is one of the district's most reliable and high impact economic agents.

But this is not just about economics.

We are in a moment where queer people are experiencing a rollback of support and protections nationwide.

Unfortunately, pride events across the country are scaled back or canceled due to lack of financial support.

Pride generates space where people can be seen, affirmed, and safe.

It reinforces the city the city's, that the city remains a place where queer people belong.

That visibility directly impacts safety, mental health, and community connections.

We're grateful for the district's partnership through the special event relief fund and our relationship with Deputy Mayor Albert.

But partial support is not sustainable.

Today, our ask is we ask the cities for full support of Pride events, including the waiver of all city fees.

If pride generates hundreds of millions of economic activity, then investing in its continuation is a strategic decision that protects both economic return and community safety.

Pride supporting pride means economic growth, jobs and small businesses, community-based services, and the district's leadership as a welcoming, inclusive place.

These investments extend beyond the event.

For example, Capital Pride Alliance covers half of the overhead for the DC LGBTQ community center, which serves some of the most vulnerable members of our community.

Thank you for your support.

Thank you for your testimony.

Yes, good morning.

My name is Benjamin Jesse, and I serve as the volunteer intern and support manager at Capital Pride Alliance.

Over the past two years, I've had the opportunity to witness firsthand the scale, impact, and care that goes into producing pride here in Washington.

So during World Pride 2025, we welcomed about 1.2 million attendees, generating significant economic impact and reinforcing DC as a premier destination for both national and international visitors.

That success was made possible not only through the city's partnership, but through the dedication of our volunteer group.

I oversee approximately 600 active volunteers, with about 200 some supporting Pride Weekend alone.

Those individuals are not just staffing our events, but they are building community infrastructure.

Many travel from across the country, including Florida, New York, and California, returning year after year because they find a meaningful sense of belonging and purpose here in DC.

For many attendees, this is their first pride experience.

And our volunteers are often the first point of contact, safety and welcoming them.

This work is especially critical in this current climate.

As LGBTQ plus visibility and rights face increasing challenges across the United States, spaces like Pride are not just celebrations, they are affirmations of community resilience and civic inclusion.

This is why continued investment from the Office of the Deputy Mayor for Planning and Economic Development is essential.

Supporting Pride is not only an investment in tourism and economic activity, but in the people and volunteer networks that make Washington DC a place where the LGBTQ plus community can thrive.

So we respectfully ask for your continued and expanded support in the grants to ensure these events remain accessible, safe, and impactful for all.

Thank you.

Thank you very much.

Ms.

Nyon.

Good morning, Councilmember Fruman, members and staff of the Human Services Committee.

My name is Jessica Wynne, and I serve as the development and operations intern at Capital Pride Alliance.

I want to take a moment to speak not just about what this organization has done for Washington, DC, but what it has done for me and why that makes the stakes of today's conversation so personal.

I applied to work with Capital Pride Alliance this year, inspired after attending my first Pride Festival here in DC for World Pride just this past summer.

I wasn't working with Capital Pride by then, but I know everyone at our org remembers how heavy the air was that June.

Our community was anxious, uncertain about what a new presidential administration's hostility towards us would mean for our lives, our rights, our futures.

And yet standing in those streets surrounded by hundreds of thousands of visitors to DC amongst Washingtonians, I stopped feeling that sense of dread and instead found joy and an unshakable sense of self among the spirit of DC's queer community.

That feeling stayed with me, and it's what brought me to Capital Pride.

Throughout my time as an intern, I've learned just how colossal the effort behind Pride truly is from the mentorship of our director of operations, Sahan, who's testifying later today as well.

I've learned what looks like effortless to attendees is the product of months of work, dozens of permits, and thousands upon thousands of dollars invested in coordinating safety and logistics across the city.

I want to thank Deputy Mayor Albert, the Office of Planning and Economic Development for their continued partnership and investments into the special event relief fund, which have been a crutch for Capital Prize Signature Parade and Festival.

From MPD to DPR, every agency partnership we have represents both a critical safeguard to making sure Pride Stays safe and healthy.

It represents both that and also a real cost with the permits and what it costs to coordinate with so many agencies, and that's exactly why we're here today to ask for expanded fully in-kind support and waived city fees from our agency partners, and we need it because this is not an ordinary pride.

We're organizing in a political climate where our federal leadership has been explicit about its hostility towards LGBTQ people.

DC Pride must be our community's answer to that message.

There's nowhere more important for that statement to be made than here.

And there's no better time than now when the federal government tells our community to shrink.

Washington, DC has a responsibility to say otherwise.

The fees for city services accumulate from like permitting public space usage, agency coordination.

So I just want to say that like pride is only possible because this organization survives and it survives in part because of the partnerships it holds with the district.

And waiving city fees for Capital Prize major events is recognition that pride is a public good.

It's also an act of civic courage right now.

So thank you for your support.

And welcome any questions.

Well, thank you very much.

Thank you to all of you for your testimony.

I think Ms.

Wynne, um you you came closest to I mean, pride is all of the things that have been talked about, but it's also enormous fun.

Um I remember going with my youngest daughter and having her on my shoulders and uh it's just a it's a wonderful, wonderful event.

Nobody is gonna make any promises about dollars in this environment, but very important that you come out and express this desire.

Uh I wonder if you can help me understand how many dollars we're talking about if uh the city were to play a larger role and to waive fees.

What's the magnitude there?

Um that's an excellent question.

And unfortunately, one that we never know, right?

So we can't actually plan for it.

Um but we have to plan for this pretty enormous bill at the end of the event, which is somewhat unreasonable for a small nonprofit that is you know working to put on this really valuable event.

Um I think that there are some estimates around what it's been in the past.

I don't know if I know that it's been in the million range.

Um, and so I know that kind of goes with those who take care of the trash pickups, from the water supply, um, to just like you know, the police and their activity and like for the medical services that we um we receive.

And so it's really broken down by all of them and then added up, and it's dependent on those services altogether.

I'll also add that um our executive director, Ryan Boss and Director of Operations Sahan will be testifying online later today.

And so they work really super directly with those numbers, and um I'll make sure to request that they share more about that.

Did you have something you wanted to add, Mr.

Gitch?

Yeah, I just want to emphasize the some of the comments that Jessica made around the fear and the additional level of effort around safety.

Um our community has been attacked, and safety has been a critical point to us being able to continue these events.

And so the cost for that safety is quite expensive.

Um it really is hard to predict.

We had a really uncom, you know, unpredictable environment last year, and we're dealing with very similar circumstances now.

All right, point taken.

I mean, I I also had the same experience last year uh worrying about how it was gonna go, and it went very very well, but we need to be prepared.

So um thank you for that.

I think as an aside, Miss Crentch, I feel like I owe you a response to a couple of emails, which I will get to over the weekend.

Um but with that, um thank you for your testimony, and we will move on to the next panel.

Thank you.

Thank you.

All right.

Uh Sam Banar, Kyra McGowan, Carla Yoder, and Rachel Hugh.

Uh and I missed my note to remind folks to be sure to submit your written testimony if you have not already.

Uh Mr.

Bernard, when you are ready.

Hello, councilmember and uh staff.

Um really appreciate you uh having this hearing.

Um I shared a lot uh in my previous and the performance oversight testimony, so I want to kind of lock in a little bit more here.

But um we uh are part of the DC Community Wealth Builders, a local grassroots coalition dedicated to shared ownership, locally rooted wealth, and building an economic strategy of local infrastructure instead of corporate incentives.

Um so when we talk about macro or you know, economic growth, um, oftentimes, and I know the mayor's really been pushing this, like we have to talk about you know how fragile that economic growth is and what our actual strategy for generating that growth and whether it generates inequality, which has been demonstrated to be bad for the economy.

And also, you know, when we create jobs, we have to decide we have to talk about at what cost.

Um so we have an enormous amount of infrastructure for the traditional economic development model of attract and retain, right?

Trying to get people to come here.

Um, but how many more jobs could we create if we actually built the local infrastructure of that other type of economic development that you know that gets guaranteed money every year in the budget for attract and retain?

Uh you know, public commons partnerships instead of public-private partnerships, uh collaborative infrastructure grants instead of just carve outs or one-offs for small businesses.

Um so we think the most transformative local financial infrastructure would be a land bank and a public bank.

The city has studied both of these.

So we have a great grounding in what's possible, um, but I think there hasn't really been the will uh or the political interest in actually moving them forward.

Um I don't really know why.

Um land bank is us uh putting all of our existing land-based wealth and tax liens into a uh entity that would make the land disposition process much quicker, much cheaper, and and moving things onto the um onto the property rolls more quickly.

Um and a public bank would be putting all of our uh what I saw in the mayor's budget 2.5 billion dollars worth of cash reserves into a bank entity, um, which has been used for over 100 years in North Dakota to be able to save us costs, potentially save us an enormous amount on debt savings, and also be able to finance the actual needs that we know we have, but the market is not producing.

We have a lot of potential starter places with that.

We have the green bank, we have DCHFA, um, and we had DGS and Disby who did the previous studies.

Um we really think DN Demp needs to take this seriously, especially at a time when uh the budget is looking really tough and the um our economic growth strategy is clearly kind of running out of steam.

We cannot afford to not actually move this forward because it could save the city an enormous amount of money and develop all these things that we want, uh, including affordable housing and grocery stores east of the river and all that.

Um so I really encourage you to advocate to put um at least one FTE in the budget for Demped to actually start to build and look at what we already have, the studies we've done and start to connect the dots between the different agencies so we could phase in to start actually building this because it will take some time to pay off.

Um, and we want to make sure the next mayor, whoever it is, is able to move it forward.

Thank you.

Uh thank you.

Uh oops.

Flipping around looking for your testimony, which I don't think we have, so you will send it, I'm sure.

Yes.

Okay.

Uh Ms.

McGowan.

Hi.

Thank you.

Um my name is Kiara McGowan, and I am a four-year resident of Southwest DC.

And I'm a volunteer with DC Community Wealth Builders uh coalition building shared ownership, locally rooted wealth in an economic strategy that supports local infrastructure instead of corporate incentives.

I'm asking you to keep DC's wealth local by creating a technical assistance grant for cooperative conversions in the Southwest community, especially the local ownership of businesses are few and far in between.

As this neighborhood continues to grow, we need to focus on building and keeping the wealth in this area, one that has had their wealth displaced and distracted by the city and the federal government for a variety of reasons, but especially with the development of 395 in the 1950s and 60s, which displaced approximately 23,000 people and tore down 95% of the structures in the neighborhood.

Creating businesses that are worker and community owned is why I'm standing or sitting in front of you today, discussing this today.

I'm passionate about cooperatives and developing new alternatives to replace the economic system we have now that is not working.

Southwest, especially has gone through generations of extraction of their wealth, and that has contributed to the loss of businesses and spirit of entrepreneurship and corporations and outside entities are reaping the benefits.

I want to see my neighborhood among others in DC build economic power.

Cooperative conversions when business owners sell their, excuse me, when business owners sell to their employees is a clear pathway to empower residents to become business owners, build share wealth, and keep DC's wealth in DC.

Small business owners and workers often do not have access to the legal, financial, and structural support needed to successfully transition into worker ownership.

And this proposal would make that co op, would make cooperative conversions more accessible by closing that gap.

As the area grows, especially in the new area of Buzzard Point, the cooperative conversions could help regenerate the wealth that was stolen from the community and bring the power back to the people.

It can also keep the businesses in the area longer by having built by having a built-in succession plan.

The uh excuse me, it can also keep the businesses in the area longer by having a built-in succession plan, the cooperative model provides, thus continuing the wealth rebuilding our city.

Thank you for listening.

Thank you.

Uh Ms.

Yoder.

Good morning.

Uh my name's Carla Yoder, and I live in Trinidad in Northeast.

I'm also a volunteer with DC Community Wealth Builders, which you've heard about.

And I'm asking you as well to invest in our local economic development infrastructure.

And I think the most obvious uh front place for that is the full-time position in Demped to drive forward some of these structural investments that are needed to really invest in the people and the small businesses of DC rather than the corporate um retention and growth that we've been focused on.

And um I'm making this ask that you bring in the personnel to really move forward, a land bank, a public bank, the coordination between these economic development agencies, because our solutions aren't working right now.

Corporate incentives are not getting us where we need to go.

If you think about RFK development, those jobs are very expensive.

They are temporary, they're not bringing sustainable livelihoods to the majority of residents that are immediately benefiting from the development.

And um incentives fuel resentment and inequality when large corporations take the dollars that the city has.

And we know inequality is increasing, right?

Um soaring housing costs, groceries, energy.

I volunteer at Readelicious in Edgewood, and every Sunday, more than a hundred people come for free food because it's hard to afford things these days.

Um even my energy bills, electricity bills are becoming unaffordable.

And when workers can't afford to stay in DC and that gap grows, that's really bad for our economy.

Um there is some small business support, but it's pretty small and ineffective.

I know the salon where I get my haircut, the owners had to move three times in the last few years and is looking again for a place that's affordable and welcoming to customers.

So there's not scalable support for small businesses that's really helping everyone stay afloat.

And we're not living up to this sort of hire local, buy local, the things that first source and the C VE are supposed to be doing.

And transformative local economic development is going to require new structures.

The land bank, the public bank where our resources are being one, we're saving money, as did the district, but two, that they're we're lending them out to create affordable, sustainable solutions for housing, for small business, for food security, for energy.

And so would ask that you support the personnel so that we can not just do studies, but actually have someone to drive forward the coordination.

And that again, the new mayor can move forward on a new economic agenda.

Thank you.

Wonderful.

Thank you very much.

Ms.

Hugh.

Hello.

Ooh, red button.

Hi.

My name is Rachel, and like my coalition members here today, I'm testifying because DC desperately needs locally owned financial infrastructure.

And there's some very low-hanging fruit that Demped can act on.

Our current economic development strategy is expensive.

We spend billions subsidizing large corporations, yet much of the wealth generated leaves the economy, the local economy.

Take the RFK Stadium.

It's framed as job creation, yet it requires over $230,000 in public subsidies per job, many of which are temporary.

More broadly, because the capital we rely on is controlled by outside actors, DC's demands are constrained.

Companies can always relocate if they find better deals.

So we limit our requirements and affordable housing or labor standards and compete with other cities in a race to the bottom.

I see the consequences of this daily.

Profits flow to shareholders who are not even DC residents, and firms can even avoid paying taxes by reporting in outside jurisdictions like Delaware.

So locally rooted financial infrastructure is the alternative we need.

A public bank would allow the district to move public funds out of private banks and into locally directed lending for priorities like affordable housing and small business development.

These loans then are repaid and reinvested, creating a revolving source of local funding.

A land bank would similarly repurpose vacant properties and tax liens for community uses rather than auctioning them off to private developers.

The district has already produced studies in 2020 on both a public bank and a land bank.

So my ask is simple.

Complete these studies and designate a full-time employee at Zumped to oversee a phase in plan.

Given the scale of public dollars already spent subsidizing outside corporations, dedicating one staff position is a reasonable and proportionate next step.

So let's build the infrastructure we need to ensure wealth created in DC actually stays in DC.

Thank you.

Thank you very much.

I don't think I have any of your written testimonies, but so if you submit them, that would be helpful.

And help me here.

So what I am hearing is a request, I think, for two things.

One FTE on the land bank public bank issue, and then technical assistance, which I'm thinking is a person on the cooperative conversions idea.

So hopefully I understand that correctly.

Yeah, a technical assistance grant.

Technical assistance grant.

Okay.

And then you have offered to meet with me, and I we have a lot going on, but uh we will.

Um but on the land bank, and not a treatise, but like a short explanation of why why it's different, how it works.

Um what I'm hearing is the land assets that the city has, and how does it work in your mind?

How does it work in your mind?

Yeah, I mean, so I think public banks are a little more straightforward.

Um the land bank uh could look a lot of different ways, and there's a lot more examples of them that can look like a lot of different things.

So that's part of what we have to figure out is what we want to do with it.

But the basic idea would be we have when the land bank study came out, $3.5 billion worth of assessed value of vacant city-owned land and billions of dollars worth of assessed value that we auction off the right to foreclose on every year in a tax lien.

So that's an enormous amount of wealth that right now we give away in a very complicated long um land disposition process.

Um we could make a land bank to one, it could make it easier to have community uses of stuff that probably won't be able to be developed, like little corners or back alleys or stuff like that or other types of community uses, um, but also to make to streamline the land disposition process so that it goes much faster.

Um it's not such a political and wasteful process.

We saw a bunch of evidence of that come out last year.

Um to make it so that that process goes smoothly, uh gets things moving quicker.

We see uh Slater Langston, I know you're you're bogged down on a lot of land disposition deals.

Um those things are just decrepit, and we could be making it move a lot faster if we have better governance and if we had clear guidelines around you know, these are transparency around these are what we have, these are what we're looking for, and trying to move the process forward um more quickly.

Okay.

Um thank you for that.

And then on the public bank, you had the reference to the 2.5 million and billion uh in cash reserves.

But if it were in a public bank and lent out, would it still serve our reserve issue?

How does that work?

Yeah.

Um I mean banks are banks create money.

Banks are allowed to uh lend out um and use their reserves as collateral, right?

10 to 1 generally.

Um so yeah, the public bank of North Dakota is a great model because they've been doing it for over 100 years.

It's very conservative model of how to do it.

We could we could go build on top of that um over the years, but it's a great place to start um of just putting against the the money that we already have instead of having to like appropriate new money like the green bank does, and maybe the green bank is a good starter point for it.

Um that would be a question for this person in Demped to move and figure out um but to escalate it so that we have way more capacity.

Um but yeah, no, you're not giving out the money directly.

You're you're you're lending it out as a note um against your assets.

And it still works to meet our 60 days or 66 days, even if it's tied up as being lent out in different ways.

Yeah, I mean the Disby study did look at this.

That um I my my memory of it was yes, it it it's totally fine, it could be done.

Um I'm sure there's they were also a little bit dismissive of it.

Um I don't and I I think that, but not based off of like it's infeasible or we couldn't do it.

Um so yeah, I mean I think I think those are the tough issues that still need to be figured out, as well as like you know, how would we best phase it in?

Um it didn't calculate uh how much money we could save on debt savings or debt service savings if we bought our own debt, if the public bank bought our debt.

Um and it also didn't evaluate whether or not um how North Dakota does it, CDFIs, local local infrastructure existing banks and institutions, uh it doesn't compete against them, but actually has adds participation capital, so it expands their capacity to do the the work that they're already doing.

Um and I know nourish DC is like one of those things that keeps getting underfunded in here and also in Demped, um it we could be supporting capital impact partners um on an easier level if we had this infrastructure to do it.

Okay.

Uh thank you very much.

Thank you to all of you for your testimony.

Uh we'll we will circle back.

Um these are big ideas, and I'm not sure that these are things that are going to happen in this budget process.

But 100%.

We just want to have someone there moving it forward instead of kicking the can down the road because they are so transformative.

They do take a while to pay off.

We can't keep kicking down the can down the road.

We need someone to like figure out how do we actually want to weave them together and move it forward in the city.

I hear you.

Thank you very much.

Thank you to all and to all of you for your testimony.

And please do submit written.

One more thing.

There's someone uh who is virtual, but they're now in person.

I don't know.

It's Ricardo Scheller.

I just wanted to flag that for you.

If you will get to you.

Thank you.

Welcome.

Charnel Cheney.

Steve Rodiger.

Barricette Solasi.

Ruth Hong.

Is has Ashley Ruff arrived?

No.

Okay.

Ricardo, if you want to come up as well, you can take one of the spots.

All right.

So Mr.

Rodiger.

When you're ready.

Good morning, Councilmember Fruman, members of the committee and staff.

My name is Stefan Rodiger, and I am the co-founder and managing partner at Rift Valley Capital.

I appreciate the opportunity to offer testimony on the fiscal year 2027 budget for the Office of the Deputy Mayor for Planning and Economic Development.

Rift Valley Capital is selected through a competitive process to lead the transformation of the Chevy Chase Community Center and Library site into a modern multi-use local anchor that will include a 23,000 square foot state-of-the-art library and a fully rebuilt brand new 21,600 square foot community center alongside approximately 177 residential units of mixed income housing.

It will also create approximately 8,000 square feet of ground floor retail space and reloc relocate most of the on-site parking underground.

This is an incredibly important public land redevelopment opportunity for the district.

It replaces aging facilities that are more than 50 years old with modern infrastructure while advancing the district district's housing goals in Ward 3.

By combining public amenities with new housing, the project creates a long-term community asset that serves both current residents and future generations.

The project also advances several of the districts' key policy priorities, including increasing housing supply in high opportunity neighborhoods, delivering mixed income housing and modernizing critical community infrastructure.

The Chevy Chase campus has long served as an important neighborhood hub, and this redevelopment ensures that it continues to meet the needs of the residents for decades to come.

We were pleased to see the inclusion of a workforce housing opportunity tax abatement in the Budget Support Act as our project will deliver units at the designated MFI levels and further lengths of the program's goals.

As you'll hear from my colleague Barricat here, access to this abatement would help alleviate gap financing and support the project's housing goals and long-term feasibility.

This is a unique opportunity to live to deliver new housing, modern public facilities in neighborhood serving retail as part of a single coordinated redevelopment.

We appreciate the district's partnership to date and look forward to continuing to work with the council, Demped, as we move this important project forward.

Thank you for your time and attention.

Barricette and I are happy to answer any questions you may have.

Wonderful.

Thank you very much.

Mr.

Selassie, are you going to testify?

Are you here to yes?

I can testify.

Good morning, Councilmember Fruman, members of the committee and staff.

My name is Barricade Selassie.

I am the co-founder and managing partner of Riff Valley Capital.

I appreciate the opportunity to offer testimony on the fiscal year 2027 budget for the Office of Deputy Mayor for Planning and Economic Development, otherwise known as Demped.

As Stefan mentioned, Riff Valley was selected through a competitive process to lead the redevelopment of the Chevy Chase Community Center and Library.

It's a complex project that's going to replace aging infrastructure while advancing the district's housing goals in a very high opportunity area.

We have been transparent over the course of this project's development that it carries a significant funding gap of approximately 40 million dollars in order to develop the housing retail library and community center at the quality and scale the district expects.

Currently, the district's budget accounts for some of the development costs associated with the library and community center in the Department of Parks and Recreations budget and also in the public library's budget.

To successfully secure private financing, however, it's important that gap funding be committed directly and up front to the project.

Lenders and investors evaluating the project must be able to see committed capital within the project's financial structure.

Without that commitment, the project faces a significant funding shortfall, which makes private financing impossible to secure.

This is because capital providers will not invest in projects that do not demonstrate an ability to either repay a loan or earn an acceptable return on their investment.

As Stefan mentioned, in addition to having gap funding allocated up front, providing access to the workhouse uh to the workforce housing opportunity tax abatement, including the budgets uh included in the budget support act would further support the project's financial feasibility.

This tool would help close the remaining uh funding gap while advancing the district's housing goals.

The redevelopment of the Chevy Chase Library and Community Center is a unique opportunity to rebuild a local campus that serves both current generations and future generations.

Um, as a Ward 3 Council member, you recognize that this project has broad community importance.

Ensuring the necessary financing tools are available now will allow the district to realize the benefits of this redevelopment in a timely manner and allow us to break ground in 2027.

Um thank you for your time and attention.

Stefan and I are happy to answer uh any questions.

Uh wonderful, thank you very much.

Uh, Ms.

Hong Kong.

Good morning, Chairperson Ferman, members of the Committee on Human Services and Staff.

My name is Ruth Hong, and I'm the Senior Vice President of Development at GIR Lynch Real Estate Partners.

Appreciate the opportunity to offer testimony on the fiscal year 27 budget for the Deputy Mayor for Planning and Economic Development.

I'm testifying today to urge you to include the Reservoir District Tax Exemption Emergency Amendment Act of 2026, which we have been working on with Councilmember Parker to introduce at the next legislative meeting as an amendment to the FY27 Budget Support Act so it can be made permanent.

The Reservoir District, aka McMillan for most of you, is one of the district's most important public-private redevelopment efforts, transforming underutilized land into a vibrant mixed-use community.

The project encompasses the district's goals of housing production, economic development, smart land use.

However, the project's financial viability is now at risk.

At issue is a misalignment between the rent assumptions underlying the project's financing structure and the current inclusionary zoning rates.

The FY26 Budget Support Act included a tax exemption for parcel two and four of the reservoir district.

The tax exemption included a tax abatement financial analysis at TAFA that the council approved.

The project's TAFA was structured using fair market rents established by the U.S.

Department of Housing and Urban Development.

However, since the TAFA was completed, the Department of Housing and Community Development, DC, published their updated inclusionary zoning rates that do not match the HUD fair market rate rents.

The discrepancy between the HUD fair market rents and the inclusionary zoning rates presents a problem because the statute that grants a tax exemption for Parcel 2 and 4 of the reservoir district requires the project to use inclusionary zoning rates while the project's financial underwriting is set up using the HUD fair market rents.

While the per unit difference between HUD fair market rents and the inclusionary zoning rates may appear modest, ranging from 14 to 126 dollars depending on the unit type, the cumulative impact is substantial.

Monthly gaps translate into significant reductions in our annual operating income.

And at the scale of this affordable housing project, the discrepancy between the HUD fair market rents and the inclusionary zoning rates can't be absorbed and directly threaten the economic feasibility of the project to move forward.

The proposed amendment does not expand the existing tax exemption, nor does it reduce the total number of affordable units or provide any additional subsidies from the district government.

It is a targeted technical fix that aligns the project's statutory requirements with the financial assumptions under which it was underwritten.

Without this amendment, the project is at risk of delays and would jeopardize delivering the proposed multifamily housing.

Including reservoir district tax exemption emergency amendment act of 2026 and the budget support act is the most efficient and timely path forward.

I urge the council to include this amendment in the budget support act to ensure this correction is enacted and the project's able to proceed as planned.

Thanks so much for your time.

Happy to answer any questions.

Thank you very much.

I apologize.

I remember Rodrigo, but I didn't get your last name, so Rodrigo, when you're ready.

Oh, Ricardo.

Ricardo.

So I didn't remember anything.

Mentwell.

It's nice to meet you, Councilmember.

Um, my name is Ricardo Schiller.

I'm a volunteer with DC Community Wealth Builders, and I'm a public witness today, and a fifth generation Native Washingtonian.

And a fifth generation Native Washingtonian.

I'm here to speak with you, Councilmember Member Freuman, and make this appeal to our leadership because I see the value in the city, and that comes from my ancestry.

My family, electricians, nurses, metro bus drivers, school teachers, architects, civil servants, built this city.

Chocolate City, DC, a beacon for black culture and support and community that made the city much more than just the seat of the federal government.

My parents have run a local electrical contractor for over 25 years together.

Over that time, they've been able to have three trucks, and to my recollection, have never had more than six employees at a time.

And they struggle, often being bid to the bottom by larger companies with financial and political connections they can never compete with.

My ask is simple.

Complete these land bank studies and doesn't need a full-time employee at DemPed to oversee a phase in plan to continue building community wealth that we can invest in affordable housing and local business infrastructure.

During the pandemic, the Fed had supported small businesses with a friendly loan program that allowed them to thrive, allow my parents to thrive, and provide critical infrastructure and services to our neighbors during a global crisis.

That opportunity is no longer available.

And I want to look into more ways that we can create investment like that.

It makes me scared to feel like there is so little agency in how our financial resources are able to be lent.

And I see so much opportunity and hope in being able to reshift and study what that infrastructure and these possibilities could be like.

We need to be working on that now because the core issue here is that DC does not have well control over the wealth being created in our district, no matter how much we pay corporations to come here, the long-term economic games leak out of DC and the profits flow to shareholders who aren't necessarily DC residents and can avoid paying taxes here.

So this makes sense.

It's a great way to keep a lot of our local businesses thriving, especially when they're anchors of our economy, anchors of jobs and job creation and stability and high wages, and really great community members that do great work and serve each other.

Again, I'm asking today that we build the local infrastructure to ensure wealth created stays in DC and is for DC and to actually commit to these studies so that we can build these futures in an upcoming administration.

Thank you so much, Councilmember.

Thank you very much, Ricardo.

And uh and I have to say, I mean, I loved hearing you said that your father is the best electrician in the city.

Uh I do not doubt it.

Um but wonderful to hear you say that, and we need to look at these issues.

Uh I will acknowledge that these ideas, I've heard about them, but have not really deeply explored them, so I need to explore them, and thank you to all of the folks who came out.

Thanks for appreciating.

Uh Ms.

Hong, uh this is new to me about the reservoir district.

It's it feels a little complicated.

Like maybe we're not gonna get into all the different numbers here in this kind of context, but we will reach out to Councilmember Parker to make sure we fully understand what's going on here.

We want to do reasonable things to make things happen, so we'll reach out.

Is there something you wanted to say?

No, I just wanted to thank you, appreciate that.

Okay.

And uh for the folks from RIFT.

I hear you.

I think I I'm curious where you think you are in uh my understanding is your negotiations with the deputy mayor, and then hope at some point a package will come to the council that would be for council consideration.

And I'm wondering where you think you are in that process.

What if is there my hope has been that a package could come before recess for a hearing to be scheduled after recess, which would give folks in the community ample time to see what it is and the and to be prepared to respond to it.

But where do you think we are at this point?

We think that we are on schedule to for the LDDA.

Um, and I don't know where we are on the uh the gap funding issues far from the Dem Ped perspective.

We've made our uh we've made our proposals and we're I think they're studying them and reviewing them and trying to figure out what they can and cannot do.

Okay.

And this is another one where it seems like there's lots of numbers out there that probably this isn't the setting to try to go through it.

But I think I would like to set up a meeting at some point so that I can understand what's going on and how you're seeing this.

It sounds like a couple of different things.

One, maybe a hope that there would be more in the capital budget for the library and the recenter, and then also access to the tax abatement.

Is that capture it?

That's correct.

And the third leg of the way that we address the 40 million uh gap was also vouchers.

Vouchers would help us leverage the high rents in uh in Chevy Chase to raise more private debt so that we didn't have to uh we would we didn't need uh housing production trust fund dollars or other grant dollars.

We could just privately finance them.

Umchers would unlock that for us by increasing the project's income, which would allow us to use more project debt, uh raise more debt.

Okay.

Well, don't want to go too deep into the details of that at in this setting, because it just seems like we we could need to take a piece of paper and but let's do get together, and I do hope we can stay on track so that there is a package that gives the community ample time to review it and respond to it.

Thank you.

We'd appreciate that.

Thank you.

All right, thank you very much.

Thank you to you all.

Okay.

Derek Ford.

Robin Patarell, Liz DeBarios, and Shira Markov.

Okay, Mr.

Ford, when you are ready.

Good morning.

There you go.

All right.

Well, good morning.

My name is Derek Ford, President CEO of the Washington, D.C.

Economic Partnership.

I'm honored to be here with you today.

Thank you, Councilman Fuman, and the committee on human services.

The Washington D.C.

Economic Partnership has been working with the district government for more than two decades.

We serve as a connector between the public and private sectors, advanced and sustainable and inclusive economic development in the district.

We work especially close with the Deputy Mayor for Planning Economic Development, Nina Alpert, and her team, uh, to support the mayor's mayor's Basel Growth Agenda.

This is an active partnership.

We coordinate on international trade missions, joint marketing campaigns, and business recruitment strategy.

Just last week, our team returned from the FIBA conference in Berlin where we met with dozens of companies in the FinTech sector engaged to enter the Washington, D.C.

market.

Washington, D.C.

is open for business, and is this partnership job to tell the world.

Our work is to is concentrated on the three strategic areas.

First, business attraction, retention, and expansion.

Last year we helped create 671 jobs, at least more than 300,000 square feet.

That's a solid year, and our future is even brighter.

273 active projects in our pipeline represent about 17,000 jobs, 4.5 million square feet, more than 64 million in capital investment.

To stay connected with the employees already anchored in the district and make sure they feel heard.

We run a twice-annual outreach and retention program.

Last fiscal year, we contacted more than 2200 employees, held 350 executive meetings, and engaged companies representing more than 165,000 full-time employees, 9.6 million square feet of space.

Keeping these companies committed to DC is just as important as landing new ones.

And once we have them here, we want to help those companies grow.

In 2025, we tracked 64 expansions up 8% from last year.

Get them here, keep them here, help them grow.

That's to that's what the numbers are showing that we're doing.

Second, we market Washington, D.C.

as a world-class business destination.

Marketing Washington, D.C.

is a key part of our economy development strategy.

There is only one DC.

Every campaign we run, every conference we attend, every piece of content we produce is designed to tell that story and put the district in front of the people and companies that belong here.

There's no substitute for what the district does.

The influence to shape policy, the unparalleled ecosystem expertise across sectors, the most educated workforce in the country, and direct access to decision makers and global institutions.

There are structural advantages only available in Washington, D.C.

And that matters.

Being near D.C.

means watching decisions happen.

Being in DC means driving them.

For the companies that need to be where decisions are made close enough is not good enough.

Our competitors are not standing steel.

This include our friends and neighbors in Maryland, Virginia.

We must make sure we are heard.

Third, neighborhood development and retail.

This has been a hallmark of the partnership since our founding.

In just a few weeks, we will be leading a delegation to ICSC Las Vegas for our 26th year.

That consistently reflects in long-term commitment to building commercial corridors that serve residents throughout the city.

Over that time, the partnership has been able to bring more than 60 new grocery stores to the district and help more than 300 retailers, restaurants, and entertainment users open their doors in the district.

The retail and restaurant industry generates more than 1.4 billion in tax revenue annually.

That kind of economic activity doesn't just happen downtown, it's happening in neighborhoods across all eight wards.

And this is how we build inclusive economic growth.

By focusing on these three pillars business attraction, retention expansion, marketing industry, the district's band, and neighborhood and retail development, we are well positioned to drive sustainable economic growth and opportunity for residents and businesses alike.

One of the key drivers of our success has been a district strategic investment and business attraction.

Last year, I highlighted the Vitality Fund and our global soft landing program.

This year we have been armed with even stronger toolkits the Growth Fund, the DC Venture Capital Program, which is leveraging $52 million in combined DC and private dollars to make equity investments in early stage DC tech companies.

And the recently launched of DC Tech ecosystem, these programs are more than incentives.

They are signals that the market, these are signals to market that Washington, D.C.

is serious about competing for industries in the future.

And the market is responding.

Washington, D.C.

is the number one state for technology careers.

We have the second highest concentration of tech talent per capital.

Among our largest attraction wins in the past year, Andorreal, Paleteer, Netflix, OpenAI.

These are companies on the frontier defense technology, data intelligence, and entertainment, choosing DC.

The partnership believes the future district economy runs through technology, artificial intelligence, and innovation.

A few weeks ago, at our annual meeting, we had a conversation with leadership of OpenAI reflecting where the city is headed and the caliber of companies we are bringing into the fold.

Washington, D.C.

is supposed to win the next generation industry.

Our talents here, our federal partners are here, our policy influences here, these companies that need to be here are making decisions looking at us.

Thank you again for this opportunity to speak with you today.

Thank you very much for your testimony.

I think we'll just go in the order, not necessarily the list, but Ms.

Mark Coffee.

Thank you up.

Chairperson Berman and members of the committee and committee staff, thank you for the opportunity to testify.

My name is Shira Markov, and I'm the director of economic policy at the DC Fiscal Policy Institute.

My testimony highlights opportunities for the committee to redirect funds from DemPed's ineffective corporate tax breaks into the hands of workers and vulnerable DC residents.

Although the DEMPED cut its proposed operating budget for fiscal year 2027, that doesn't tell the full story.

Demped's newly proposed and existing tax payment programs, reductions in business fees in the BSA, and other tax incentives total nearly 191 million dollars in foregone revenue over the financial plan.

Plus, DemPed allocated 173 million for Capital One Arena and RFK in its FY 2027 capital budget.

While the mayor and Dempet argue that these costs should be thought of in a separate category from spending pressures in DC's operating budget, the debt service for these large projects strains DC's overall bottom line.

Demped and the mayor continue to use these resources primarily for disproven trickle-down strategies to grow DC's economy that typically don't result in better outcomes for residents.

For example, their focus on increasing the sports and entertainment industries in DC is likely to result in mainly low-wage jobs once construction concludes.

DEMPE wants to significantly ramp up tax abatement programs for developers, including increasing abatements in housing downtown program and adding three new programs, all without publicly demonstrating that these incentives aren't just subsidizing activity that would have happened regardless of the abatements.

And while directing significant resources towards corporations and developers, they would strip first source requirements, which boosts employment of district residents from the office to anything program.

DEMPAD hasn't had any takeups so far for office to anything.

Instead of admitting that this program is ineffective and redirecting the funds, the mayor and DemPEP want to change the program rules to try to entice take up at the expense of district workers.

The mayor and Dem Ped argue that all these expenditures are needed to position DC for growth and will eventually result in more revenue for DC to invest in other programs.

Yet years of trickle-down economic strategies have not trickled down to DC's lowest income residents.

DC has the highest inequality rate in the country, a climbing child poverty rate, and stark racial disparities.

To tackle these underlying disparities, economic development and investments need to foster inclusive growth and focus on growing workers' and families' incomes.

Unfortunately, this budget proposal mainly does the opposite.

Slashing proven worker supports like paid leave and cutting critical safety net benefits like TANF.

I urge the committee to make changes to redirect funds from ineffective programs to proven ones, such as eliminating the inefficient office anything program, stopping additional approvals of new programs under the unproven housing in downtown program, and striking proposed uh fee reductions from the BSA, which are too small to have a significant impact on businesses' bottom lines, but will cost DC a lot.

Eliminating these unnecessary expenditures, which I've outlined in my written testimony could free up a total of at least $90.4 million over the financial plan, which can be used to close gaps in the budget, including for DHS safety net programs.

Thank you for the opportunity to testify, and I'm happy to take questions.

Thank you very much for your testimony.

Ms.

DeBarros.

Good morning, Councilmember Fruman and members of the committee.

I'm Liz DeBarros, CEO of DC Building Industry Association, and I'm a proud Ward 7 resident.

This year, DCBIA celebrates 50 years of bringing the industry together to address the daily economic and physical realities of building sustainable projects.

We appreciate the opportunity to offer technical recommendations and serve as a resource to this committee.

We particularly appreciate your uh engagement since you had the began the pre-purview of DEMPED, which is a critical agency of DC's growth.

I've submitted full testimony for the record, but I want to highlight a hard truth.

DC's economy is being fundamentally rewired.

We face permanent structural changes, not a temporary dip or cyclical changes.

Like many in the business community, we believe the district has reached the limit of balancing books through fund drawdowns and tax hikes.

To protect our social contract, we must pivot towards strengthening core systems and removing barriers to building all types of housing and all and creating economic activity.

We support the mayor's budget because it focuses on district growth through creative programs at this critical time of change.

On four parts of the BSA, we strongly support the housing in downtown and office-to-anything changes.

The new bedroom definition is a game changer for office to residential conversions and does not impact IZ units.

We also recognize the need to make changes to the first first source for flexibility to respond to evolving market needs and increase program participation.

On CBEs, we ask also ask for flexibility, allowing recipients to meet the 35% threshold through construction alone, or allow for a mix of construction and operations to maintain this flexibility while supporting the strong CBE participation.

We support the addition in the BSA that seeks just to support tenants building credit, but the program must remain voluntary for housing providers.

Rent reporting is complex and belongs in a standalone bill.

We shouldn't condition district financial assistance on participation.

We must exempt mom and pop landlords from these administrative burdens.

We support the new tax abatements for workforce housing, WAMATA and former federal properties, these sites like Friendship Heights have been stuck for years, and between the economic headwinds and new tax taxes on formerly tax-exempt land, these projects are impossible to develop currently.

These incentives are the key to unlocking housing at transit hubs.

Finally, we urge caution on expanding authority for the mayor to purchase land for neighborhood revitalization without clear definition of what revitalization is.

Thank you again for the for your collaboration with our industry.

NDCBIA stands ready to work on solutions to ensure the district's long-term fiscal health.

I'm happy to answer any questions.

Thank you very much.

Good morning, Chairperson Freeman, members of the Committee on Human Services and Staff.

My name is Robin Bederal.

I am a Ward 3 resident and the head of multifamily land acquisition and development for EYA, who is a local housing developer that's been building homes in the district and the surrounding area for over 30 years.

I'm appreciate the opportunity to offer testimony on the fiscal year 2027 budget for Demped this morning.

I'm here to provide feedback on the fiscal year 2027 Budget Support Act, specifically Title II Subtitle E Walmata Joint Development Properties.

I will say firstly, it's very exciting to see this, and so we are very happy that this is on the table for consideration.

I cannot emphasize enough how important this tax abatement is in helping these Walmata sites move forward.

As an example, UIA has been working on the Tacoma Metro project for over 20 years and has yet to find a path to move forward.

Projects like this mixed use projects at transit support Walmata ridership, housing production, and economic growth across the district, including significant affordable housing.

Our project at the Tacoma Metro station specifically will transform over six acre underutilized Walmata site into a vibrant mixed use community with more than 434 residential units, about 15,000 square feet of new neighborhood serving retail, including, we hope a small grocer who we're in final lease negotiations with.

This also includes 10 deeply affordable units at 30% of AMI, six of which are three bedroom units to support families in low income brackets.

It also includes significant investment in infrastructure, sustainability with planned solar and a lead gold standard for the building, as well as public spaces, including an over one acre public park.

However, we have to get the details right.

As currently drafted, there are several provisions in the WAMATA Joint Development Properties subtitle that pose challenges for our project and could undermine the financial feasibility of other projects like ours that currently stand to benefit from the tax abatement.

I'm asking the council to consider three modifications to the subtitle to ensure that it supports rather than impedes the delivery of this much needed housing.

First, I urge the council to amend the language requiring WAMATA to retain ownership of the property throughout the term of the tax abatement.

As currently written, subtitle E states that a property can only receive an abatement so long as the property is owned by WAMATA every year of the abatement term.

This contradicts the subtitles definition of a joint development agreement, which can include the sale of a property to a developer as it does in ours.

We propose changing the language to make properties owned by WAMATA and then sold to a developer subject to their joint development agreements eligible for the tax abatement.

Prior to the start of construction, EYA plans to purchase the Tacoma Station property.

And thus we need the subtitle to allow for properties once owned by WAMATA and then sold to a developer to remain eligible for the tax abatement.

Without this change, the tax abatement created by the subtitle is limited only to properties leased by developers, severely limiting eligibility.

Second, I recommend modifying the first source and CBE requirements so that they only apply to the private development components of a project and not to any infrastructure created or rehabilitated for WAMATA's use.

As currently drafted, these hiring requirements apply across an entire project, including the transit infrastructure that's often delivered in coordination with WAMATA.

This broad application adds cost and complexity to delivering essential public infrastructure.

By limiting these requirements to only the private development, you would help preserve project feasibility and reduce the cost of WAMATA infrastructure.

Lastly, I urge the council to extend the allowable term of the tax abatement from 20 years to 25 years.

The legislation already allows the mayor to determine the appropriate term based on project economics.

That's if she determines that a project can move forward without with less than 25, she has that ability.

But expanding the maximum term will help provide needed flexibility, particularly for projects with significant upfront costs such as ours.

A longer term will allow developers and their investors more time to amortize those costs, including those associated with the compliance requirements like first source and CBE, which will improve the financing visibility of the projects.

Together, these changes will better position Wamata joint development projects to succeed.

Without these proposed changes, the district risks delaying or losing transformative projects like the Tacoma station redevelopment that are essential to meeting our housing, transportation, and economic development goals.

Thank you for your attention to this matter and for the opportunity to testify, and I'm happy to answer any questions.

Thank you very much.

Just a few questions.

Mr.

Ford on the economic partnership, there's been a fair amount of movement in the way in which the partnership is funded.

Last year we did some things, and this year other things are happening.

Does look like maybe a modest reduction in funding for the partnership in this year compared to in FY27 compared to FY26?

But one of the things that we've also heard is the idea that the partnership might try to move increasingly to be complemented with private uh funding as opposed to government funding.

How are you seeing the funding streams for the partnership?

Do you feel comfortable with where you are?

Do you feel like that the idea of relying more in the future on private funding is a promising idea?

I'm just curious.

We're looking at a moving target and trying to understand it and understand the different perspectives, and I'd love to hear yours.

Thank you for the question.

Um about two years ago we did a marketing study, and in that market study, we looked at our competitive cities uh like Balston, San Francisco, and then we looked at the one the structures right round here, the Baltimore is Richmonds, and looking at our funding structure.

We're 501c3.

Uh historically, we receive about 75% of our funds from uh Demped.

Um right now it's in the form of a grant.

And um some of the challenges can be that it may take three or four months to receive that.

Whereas uh another structure could be similar to the bids or a destination DC to receive the funds through a tax allocation straight on October 1st.

That will allow us to really have a whole year of programming instead of having to do um uh 12 months is six months or eight months.

So those are some of the things that we're looking at.

We we love being a public-private partnership, having the um private industry on our board, having them contribute because then it's still is a buy-in from the the business community.

So we have some conversations on that.

I know in the budget this year, we had an increase of funds based upon I think the hotel tax where we were uh we we were included from the pre from the previous year.

Um we had an increase of a million dollars.

Um now, if you look at the budget book, it looked like it's a decrease.

Well, I think the previous year with some other funds in there that didn't come to us.

Um we're we're we're landing, we're static with the increase of funding.

It brings us up to par with some of our competitive cities.

Uh we're still underfunded if you look at some like the Baltimore's Alexandria, the Fairfax, who we're getting there.

So we have more conversation with you about which method to use going forward.

Okay, so I I guess part of what I heard there is what look might look like a cut to me, you don't perceive as a cut because there were in the benchmark for FY26, there were dollars that didn't come and sort of that for FY27.

You you feel like you'll be ahead of the game compared to FY26.

Yes.

If you look at, I think the budget book looked like it was 8.05 from last year, which we really got 5.1.

I think it was a timing issue or something in there from the um from the CFO.

But this year we slated against 6.1.

Okay.

All right.

Thank you very much.

Um Ms.

Markov, I I hear you on scrutinizing the different tax abatements that is a project that we need to undertake.

And I actually hear you particularly on the office to anything where there hasn't been uptake.

I am curious, and and there is a fundamental philosophical difference between you and some of the other people on the panel.

But that's you know, that's the world.

On office housing office to housing, there has been more uptake.

And I don't know whether what you're saying is you think that would have happened without the supports, but it does strike me, and I'm curious your view on this, that getting housing downtown is a critical project for the city, that we need to get residential downtown because the way in which the city has developed was as a commuter city, and if it's gonna thrive, if downtown is going to thrive, we're gonna need people down there.

But is your living there?

Is it your suggestion that this would have happened without the incentives that the city has provided?

Yes.

So we have seen a number of uh office conversions that have happened outside of the housing to down uh uh housing and downtown program.

Demped has said it itself.

Actually, I think there are more conversions happening outside of the program than inside the program.

Uh in the performance oversight hearing, Demped said that uh guys in their responses to some of the questions, they said that basically they asked developer to submit two scenarios with and without the uh uh the abatement.

Um and and so basically they're asking the developers to self-attest that they need this um in order to make the math work.

Um what we haven't seen is any kind of third party evaluation of this program, any kind of looking at the impact and the necessity for the subsidies, what kind of impact it's having overall on DC's economy.

So we're basically just going by developers are saying they need this to make the math work.

Um I think what we need is some some more scrutiny of that beyond just looking at kind of what is being reported to DEMPET.

This is the I mean I don't know all the ins and outs.

This is kind of what they said in their um in their performance oversight responses.

Is there is there a TAFA process or is because it is it outside of the TAFA process where the CFO would do an analysis of whether or not it was necessary to make the deal happen?

I have not seen it.

I I don't know for sure.

Okay.

Well uh we'll look at it.

Um thank you.

You your your testimony is your your written testimony is extensive, and despite the fact that Mr.

Ford like totally disobeyed the time rules, you were respectful of the time rules.

I appreciate that.

Sorry, Mr.

Ford, it's just the truth.

Um Ms.

DeBarros, um one of the things you talked about was land acquisition, and actually land acquisition has been a thing that's been of interest to me.

And I'm curious, you were uh expressing a kind of reservation about it.

So help me understand what your reservation is in that space, because it does seem to me that we want the city to be nimble where there are opportunities to purchase property and then maybe put it out for an RFP for a different kind of project.

But what what's your reservation in that area?

The uh the definition of revitalization uh we I I believe our team can submit some you know recommendations for that um just to create some uncertainty with uh in the market to um not understand what is a what is defined as a revitalization project.

But I mean, in principle.

Do you think it could be valuable for the city to be in a position to be acquiring properties, or do you think that's a market distortion somehow?

Uh there's some value in it for sure.

It's it's just about the clarity on the definition.

And I think with with um you know opportunity to to provide some recommendations, I think that's the direction the city should go.

Okay.

All right.

Well, we'll we'll follow up on that as well because this is an area that I think um it's been a focus for me.

And I if we do it, I want to get it right.

So I want to be in communication with you on it.

We would love to help you with that.

Uh Ms.

Betterell, I have to say, I mean, you what you had to say about the Tacoma project just gives me chills because I mean all of the projects are important, but friendship heights for me, like we need to light up friendship heights, so we need something that will make it to coma.

No, no, no, no.

But it gave me chills about if that's the experience in Tacoma.

I don't want to wait 20 years for friendship heights.

So I totally get that it's that it that it's a different project, but it's illustrative of the challenges that folks face.

Some of this is new to me, the things that you want to see tweaked, so thank you for coming out and talking about it.

And we'll have to explore the idea of Wamata ownership versus long-term lease.

We need to look into it.

Um the limit on the first source, the way I'm hearing you is for the portion that you would be doing, EIA would be doing, that you would accept the application of first source for the private development, but it's for the infrastructure elements that you that first source wouldn't necessarily apply.

And does first source apply to Wamada for their projects generally when they do a product project in the city?

I don't know the answer to that.

Okay, so I would want to want to understand that, whether or not if WMATA was not subject to it, then imposing it on WAMATA would be an additional burden in this context.

On the other hand, if Wamada was I'm sorry, yes, and if WOMATO was subject to it, then alleviating the burden on Wamada would give them more of an advantage in this context.

So I want to understand what the status quo is.

And if I may clarify what often happens with these joint development agreements, is the developer is tasked with building infrastructure for Walmata on WAMATA's behalf.

And so you know, that's I think the rub.

I don't know whether when Walmata engages the project as Walmata, whether they're required to do first source or CBE.

Um, but the developer often builds infrastructure for Wamada.

So WAMATA is not actually the um contracting party, I guess.

And so that's the specific that I was trying to make a distinction between.

Like when a developer is building a project as we are, where we're building a Walmata bus loop, we're building eight Walmata bus bays as part of that to remove that piece of the work from those requirements.

Yeah, no, I hear you.

What I'm trying to understand is if Walmata was doing the bus loop, would would it apply?

And I I don't know the answer to that question.

I don't know that it's determinative, but I would want to understand it.

Um thank you to all of you for your testimony.

And Kevin Clinton, Justin Zhang, William Jordan, Alise Cohn.

Okay, we'll bring her up in the next panel.

Thank you very much.

Okay, Mr.

Clinton, when you are ready to go.

Chairman Furman, thank you for the opportunity to testify today.

My name is Kevin Clinton, Chief Program Officer at the Federal City Council, a nonprofit organization committed to the long-term economic, social, and civic uh vitality of the District of Columbia.

I'm gonna focus my testimony today on three areas.

Uh first, the importance of economic growth to fiscal growth.

Second, how Demped advances core principles of economic development, and third, to express our support for targeted tax incentives for former federal buildings.

I I was reflecting on my way here this morning, that it might be by happenstance, but it's it's actually a a nice opportunity for you as the chairman of this committee to think about the connection between economic development and the human services that you oversee.

Over the last 25 years, uh DC has experienced extraordinary fiscal growth.

The budget has grown by from six billion to over 21 billion dollars, uh a 3.5% growth, 3.3.5 X growth, driven by a sustained expansion in population, employment, development, and business activity.

A growing economy gave the district resources to make historic investments in services like human services.

That underlying growth is now at risk, which is why the work performed by Demped and this committee is so important.

The challenges we face aren't cyclical, they're structural.

The CFO projects that 40,000 federal jobs will will be lost and will not return.

And we have a smaller office footprint and weaker street level traffic that also drives economic uh economic activity of the city's growth.

So we support the mayor's uh continued investments in economic development and believe Dem PED plays an essential role in shaping the district's economy.

And we also believe that they adhere to their investing in key elements of economic growth from our perspective.

One, starting with a clear-eyed view of DC's competitive position and long-term opportunities for growth, so limited resources can be targeted effectively.

Two, a competitive tax policy and regulatory environment.

So businesses choose location based on cost of how hard it is to operate.

The decisions you're gonna make later on the budget process about tax will directly impact whether businesses come and stay here.

Third, industry involvement when employers are genuinely involved at the table, helping shape priorities, not just consulted after decisions are made.

Investments tend to be better targeted.

Fourth, workforce development needs to be tied to real demand so that residents can be positioned to benefit from growth as it happens, not after the fact.

Sixth, we need workforce housing.

This is fundamental.

The situation has gotten worse in terms of housing development for both nonprofit and for profit providers alike, leaving residents with fewer options.

Sixth, we need a strong corporate attraction function, which our uh our head of the DC economic partnership just spoke to.

And seventh, we need catalytic projects.

The Wharf, Navy Yard, Capital One Arena, these investments by the city have yielded tremendous benefits, and we see on the horizon another potential opportunity in former federal buildings.

The mayor's investment in former federal buildings makes practical sense.

These properties are off the tax roll.

The district isn't forgoing existing revenue by offering this incentives, and the e-development costs for these buildings will be prohibitive without support.

In closing, we support the mayor's investments in economic development and the role of Dem PED plays in shaping it.

The district's long-term economic and fiscal health depends on the decisions that you and this council make during this budget process.

Thank you for the opportunity to testify.

Thank you.

Ms.

Cohn.

Good morning.

Good morning, Chairman Bruno.

Sorry.

There we are.

Good morning, Chairman Freeman.

My name is Elise Cohen, managing member of Long Shots, a Frederick-based uh off-track betting facility, and I'm the only 100% woman-owned sports book in America.

I appreciate the opportunity to testify today.

I am here to urge the district to take a serious and timely look at authorizing off-track betting and historic horse racing as part of its broader economic and fiscal strategy.

The district is entering a period of real fiscal pressure.

The mayor's proposed 27 budget reflects a significant gap driven by slowing revenue growth and rising costs.

That reality requires the district to think differently.

Not just about cutting spending, but about responsibly generating new reoccurring revenue.

HHR and OTB represent exactly that kind of opportunity.

Based on comparable jurisdictions and adjusted for the district's market, these programs could generate anywhere between 92 and 130 million dollars in annual reoccurring revenue without increasing existing taxes.

At the same time, the policy landscape around gaming is evolving quickly.

Neighboring Maryland recently passed legislation to study historic horse racing, signaling that jurisdictions in our region are actively evaluating this model and positioning themselves for future revenue and investment.

Here in the district, the council is also considering eye gaming, a fully digital form of wagering that is a very different policy choice.

iGaming is entirely online, widely accessible, and raises a distinct set of responsible gaming concerns.

By contrast, OTB and HHR are in-person, facility-based, and tightly regulated.

It creates jobs, drives foot traffic, and operates in a controlled environment, not on a phone in every pocket.

If the district is prepared to consider expanding online wagering, it should also consider a more controlled, in-person model that generates jobs and tangible economic activity.

We also want to be clear on an important an important point.

There is a defined legal pathway for authorizing HHR and OTB in the district.

By structuring HHR as paramutual wagering, consistent with traditional horse racing and explicitly authorizing it in the statute, the council can create a clear and defensible framework that aligns with how these programs operate in other states.

The model we are proposing is intentionally measured and appropriate for the district.

We envision two to four high-quality destination-style venues, not casinos, but premium entertainment spaces, each combining historic horse racing terminals, simulcast wagering, and food and beverage.

These would complement existing commercial quarters and attract both residents and visitors.

At full scale, this approach could support hundreds of jobs, increase foot traffic for local businesses, and new opportunities for district-based contractors and workforce development.

Finally, this proposal aligns directly with the district's broader economic strategy.

The mayor and the council have emphasized the need to diversify the economy, grow tourism, and activate underutilized commercial space.

HHR and OTB do exactly that, bringing consistent year-round activity and private investment without requiring significant public subsidy.

At a time when the district is making difficult budget decisions, this is a pragmatic option that deserves serious consideration.

For those reasons, we respectfully respectfully request that the administration and the council take the necessary steps to evaluate this proposal, conduct fiscal and legal analysis, and include authorizing legislation as part of the district's budget and legislative process.

Thank you for your time.

Thank you for your testimony.

Good morning, Chairman and Council.

According to the Washington Business Journal, a key and longtime DIMPE development partner, Chris Donatelli took advantage of Dempeh's poor oversight to defraud the Highland Park project in Columbia Heights of over 120 million dollars via a series of mortgage fraud schemes.

Per the original terms of the LDA, approximately 30 million of those dollars are public funds.

Further, the LDA requires DINPE to approve such transactions.

This money seems to have disappeared, and DIMPE needs to move immediately to recover at least 30 million of the public share.

The Washington Business Journal also reports that Donna Telly's fraud will delay Hill East projects that Dinpay had awarded to Donatelle while he was implementing the mortgage fraud at Highland Park.

The business journal also reports Donald Telly's wife plans to sell for profit Donna Telly's interest in the Hilly's projects.

10 million to what I call a youth inclusion and opportunity zones in place of the racially discriminatory youth curfew zones.

Reliance on curve youth curfew zones is entirely the fault of DIMPER's Albert anti-equitable development policies.

At her confirmation hearing in 2024, I urged her to get ahead of this issue and leverage it for good.

Instead, she took the loss, got lost in the siren song of billionaire sports fast talk.

Dimpeh should cut the following programs and redirect them to the youth inclusion and opportunity zones.

There's a car park at DC USA, the Chinatown Business Activation, the Tech Ecosystem Fund, League Generation Fund, and there are others.

During the youth curfew debate on Tuesday, council members complained that they were outsmarted by youth who use the internet and social media to outsmart them, DINPET, the National Guard, and et cetera.

The above funds should be used to hire these brilliant youth to design and implement the youth inclusion opportunity zones.

Thank you.

Thank you very much.

Mr.

Zheng.

Good afternoon, Chairman Frumman.

Oh, sorry, Fruman.

My apologies.

I'm an organiz organizer with the Save Chinatown Solidarity Network.

Um, we're a volunteer-based organization that advocates for the working class uh residents and legacy businesses in Chinatown.

Um I'm here to testify regarding Mayor Bowser's proposed elimination of the Chinatown lease incentive grant at a time when Chinatown's residents and legacy businesses are in crisis.

This past winter, black and Chinese seniors at Museum Square apartments were trapped inside their nine-story apartment building for two months while all five elevators in the building were broken.

Their landlord Bush Companies has racked up hundreds of code violations over the past decade, waiting for residents to forego their tokel rights and sell their property to the highest bidder.

2025 also saw the eviction of four legacy businesses that combined had been in Chinatown for over 100 years.

Gaya Hair Salon and Folky were evicted last July by Rift Valley Capital, who you heard from earlier today, who plan to construct a Marriott Hotel right across from the other Marriott Hotel.

Last budget season, they worked with Councilmember Pinto to gain a special exemption for the office to anything tax abatement, allowing them to qualify for a multi-million dollar tax break while destroying historic townhomes, no office conversions required.

Now just 11 legacy businesses remain in Chinatown.

These incidents are not accidents.

They are a chronic neglect of Chinatown under this administration.

This is not new to Chinatown's working class.

They were left behind with the Washington Convention Center, the arena construction, um, with the disappointing Dempad Chinatown task force that occurred in 2025, and they're being left behind today.

Meanwhile, property speculation in Chinatown is soaring, and developers are literally salivating at the thought of kicking out 80-year-old grandmas and mom and pop restaurants to build billions of dollars of Airbnbs and luxury hotels.

The only tangible result of the Chinatown task force that could support legacy businesses was the lease incentive grant, which let me be clear, um, was far from perfect.

Um it opened in last April.

I personally supported um an application.

Um I'm running out of time, so um, if you have any questions regarding the issues with the program, uh please I'm open to questions on that.

Um Chinatown has a deep mistrust of city government because city promises never seem to uh find them, uh, but it doesn't have to be this way.

The lease incentive grants cannot be cut in the fiscal FY27 budget.

We are requesting that the total amount of funding be increased from 125,000 to $600,000 yearly and expanded into a fully operational legacy business support program.

This amount can provide crisis of rating support for Chinatown's remaining legacy businesses, um and would also include funding for a Chinese-speaking community outreach specialist, which was lacking, and technical assistance for businesses to establish permanent long-term leases, which most of them do not have.

The program could re-incentivize rent uh rent reductions, rent increase caps, and formal long-term leases for legacy business legacy businesses through targeted property tax abatements.

Um senior residents in Chinatown already take a one-hour bus out to Virginia to buy their groceries, but by retaining these uh existing businesses, uh senior residents can continue to access other culturally specific amenities like getting their haircut, Chinese medicine, and going to temple and their church.

Um, so how do we fund it?

Rift Valley Capital in their amendment deal with Councilmember Pimbo Pinto agreed to negotiate $300,000 of their $8 million tax abatement to the lease incentive grant if they are were to be awarded.

Given how much they would benefit and the special adjustments made for them, a fair amount would at least be 1 million or a yearly recurring CPI adjusted donation for each year they received the tax abatement.

Dem Ped also allocated over a million dollars towards Chinatown activations and 250,000 towards the Chinatown Renewal Initiative in FY26, which as far as we know remain unused.

In the past year, the task force was disbanded and the Chinatown Renewable Initiative again uh was created again without the representation of legacy businesses and residents.

As they currently stand, these initiatives are destined to repeat previous failures.

Lip service consulting run by real estate moguls with no tangible outcomes.

We are hoping to submit a draft amendment to your office uh that includes these provisions.

Uh we also look forward to discussing this and other potential legislative solutions to improve dignity and quality of life for seniors, um, remaining senior citizens in Chinatown and legacy businesses that support them.

Uh, thank you for your time.

All right, thank you very much.

So this is relatively new to me.

So the idea that you might send some materials that would be helpful.

I I do we do have your testimony, but uh we will look into this uh the lease incentive program.

We have not to date, but we would thank you for coming and testifying.

Uh uh Mr.

Jordan on the Donatelli issues.

We it's a cautionary tale that needs to be taken into account as we look at all of these different things.

Um I do think nicely done on the youth curfew.

I think we see it differently, but I think taking the the they outsmarted us, so let's use them.

That was a nice turn.

Uh Ms.

Cone.

The this off-track betting and OTB and HHR historic horse racing, they're new to me.

Um, and it's this is a thing that's come up relatively recently.

Eye gaming is a thing that has been percolating for a year or so or more than that, but this is new.

And I know you met with uh our office the other day, and it could be that this belongs here.

It could be that this belongs uh in the OLG, which is also an agency that we have oversight over.

One of the things when I look at these issues is uh I worry about gambling, but I also it is out there.

And so to the extent it is out there, then regulating it can make sense.

You get into a place where if it's if you regulate it and normalize it, you could see more of it, or it could displace things that are happening in other places.

When you look at the idea of uh HHR OTB here, do you see it as a net increase in the amount of gambling that is happening, or do you see it as the district hosting a portion of the gambling that's already out there?

Excellent question.

It's a bit of both.

So we're actively investigating how many dollars are leaving the district year over year to go to places like Virginia and Maryland, and I actually have a map with me that I'm happy to share with you that demonstrates the proximity of the number of gaming locations in Virginia and Maryland.

We think it could be upwards of 50 million dollars every year, where district residents leave to go to Maryland and Virginia to gain.

Now, accessibility obviously creates more opportunity.

So we do believe that people who may not want to drive an hour to Maryland or Virginia or 30 minutes would, you know, then go more, you know, locally to DC to gamble gain, sorry, gamble.

So it's a bit of both.

I think in concentrating HHR to two to four locations, you diminish problem gaming, you know, issues.

They become destinations and not ubiquitous things that one can do all the time.

So it's an active choice.

Okay.

So that's that's very helpful, and this will be an ongoing conversation.

And I I have to say I really appreciate your cantor.

Because you didn't, you could have just told me no, there's no increase, which is what I want to hear.

But you and you know that, but you didn't say that.

And so I I actually I appreciate that.

Sure.

Um I think I understand you may come testify again.

I'd be very curious to see that map, and we'll keep up the conversation.

Yes, I intend to zoom in on the fourth.

Thank you.

Um Mr.

Clinton, your reference to the you the link to human services.

I mean, it it's actually the director of the library said, why did I get put in your committee?

Like, is it the a recognition of how much service we're doing to homeless people for homeless people?

And it was not, it's the randomness of the politics of the council and Phil Mendelson didn't give me things that I wanted and gave me one thing that I did want.

But it but all in a certain sense, it all comes together around.

I mean, human services is mixed in with everything, and you're totally right that there's an interplay here with even with Dempad to human services, and I also appreciate your raising the issues around workforce.

And we have a workforce system that is broken right now, and we actually need your institution to be a major partner in rebuilding our workforce training infrastructure because the again with the interplay with human services, lots of public benefits, the work requirements didn't have teeth before, but now they have teeth, and so the urgency to connect people to work is acute.

So you want to be a partner in any conversations on revenue raisers.

I hear you and take that uh to heart.

I want you to be a partner on any conversations about workforce development because having the business community front and center at that table is super important.

I don't know if you want to comment on that, and but then I'll get to a question.

I'd like to say that historically the workforce system, one of the challenges in the city's workforce system is you've had this loop between the government and providers.

And employers haven't been a meeting meaningful part of informing the types of training that's being provided, how they're being provided.

And furthermore, in all too many cases, the contracts between the city, this is not your committee, but between the city and training providers are based on how many people completed your program, not how many people got jobs, and certainly not how many people persisted in jobs.

I just I just one more point about your the the notion that we have a lot of work to do.

By our count, it's not available publicly, but by our count, there's 1,200 skilled trades employees or registered tradesmen women in the district.

And we all heard the number that there are 14,000 jobs being created, many of which will be construction during the construction phase of RFK.

So if something's not working, and it's a great real opportunity to collaborate.

Yeah, so uh I'm trying to arrange a meeting to public service advertisement and try to get win and a lot.

Uh I'm trying to do a tour of the Intel Sat building with the Carpenters Union because you could put a training center, the all the training centers for the trades are out in Prince George's County.

Could we bring training centers into the district so we can fill that gap because 1,400 people in the trades here, 6,000 jobs is what we're talking about.

I mean we got a long way to go.

So let's work together on that.

Thank you.

Uh on the federal buildings.

Yeah.

Um I hear you on the opportunity, and so sometimes I I've said this to Deputy Mayor Albert, and she says, don't talk that way.

But I do worry a little about, you know, this is an enormous amount of supply that is coming on to the market.

Do how are you thinking about the change in market dynamics when we bring if should we free up millions of square feet of potential development?

What impact does that have on the rest of the ecosystem?

How are you all thinking about that?

So if if we can focus on Southwest, um we're very um concerned about the same thing you've created that additional demand in this environment of weak demand will exacerbate some of the challenges we've had.

Um, we believe there needs to be a long-term plan.

Right now, what the federal GSA has asserted is that they're putting buildings out for bid as quickly as possible to remove the liability off the federal balance sheet, and you're gonna get piecemeal owners, piecemeal development plans that don't make a cohesive whole that could be more effective economically.

And there needs to be a broader economic strategy for that area, think innovation district, think new industries.

That independence avenue address that the Forest All Building is on, should be the most attractive and uh address for any company in the country.

So, could you use that unique qualities of some of that space to drive demand that wouldn't come to other places in this in the city?

All right.

Well, I appreciate that.

And it isn't I mean, it's not like we're gonna turn off the switch and it's not gonna happen, it's gonna happen.

The question is how do we be strategic in dealing with it?

And I really appreciate sort of like Ms.

Cohn that you didn't say, oh, don't worry.

You're you share my concern, and so now the question is how do we do it right?

And I would just add that Southwest, the trajectory is 10 to 20 years.

It's a longer term trajectory, uh, which won't interfere with today's market environment.

But buildings like the FBI building, which might be closer, that's certainly going to be a big question is how you drive demand in that area.

So I appreciate that you're thinking about these things.

All right, really appreciate it.

Thank you.

Thank you to all of the witnesses.

All right, next panel, um Cheryl Court and I believe Sharnell.

Um then is there anyone else here who came to testify in person who hasn't had the chance to testify?

Okay.

Um with that, Ms.

Court.

Uh Councilmember Ferman, thank you for the opportunity to testify.

I'm recognized representing coalition for smarter growth.

We advocate for walkable, likable, inclusive transit-oriented communities as the most sustainable and equitable way for the DC region to grow region to grow and provide opportunities for all.

We want to acknowledge the um efforts of DemPed throughout the city working on important projects like bringing affordable mixed-income housing in new neighborhoods to the RFK Stadium area, the U Street Police Station redevelopment, um, the McMillan redevelopment, um, and the Chevy Chase Library and Community Center Redevelopment Project.

We support the continued staffing and resources for Dem PED to strengthen their efforts with uh public land development and um public engagement.

Um my testimony is focused on the Chevy Chase Library community center redevelopment effort, and we have um, I guess I'd say uh three uh simple points.

One is we need to include more affordable housing in the selected proposal.

We can do this by restoring the original Rift Valley proposal as presented on March 29th, 2025.

And uh appreciate your emphasis on expediting the approvals of the um land disposition and development agreement, um getting the resolution um into submitted before recess and um a September hearing.

That um sounds like a good timeline to us.

Um we uh support and basically we've been collaborating with the many, many supporters, community supporters of the uh including affordable housing at the Chevy Chase Library site.

Um we agree that um the original refill Rift Valley proposal of 206 of total units with a minimum affordability of um 70 deeply affordable, 67 workforce at 80 percent meaningfully and the rest of market rate.

Um, this is this is a good mix.

Um we definitely want to see a majority of below market rate um housing at this site because um it's public land.

We need to um use this opportunity to um to make the most of a rare Ward 3 public land site.

And um we would urge uh you as part of the resolution to ensure that um the covenant is permanently affordable as is required by law for public land decisions, and we certainly are supportive of any kind of um this tax tax abatement or low-income housing tax credits or any other things we can to make sure that we put more affordability into that to this deal.

Um we are very concerned that there are, of course, vocal opponents to adding this affordable housing in Chevy Chase, and this is um uh sort of a long-standing challenge that um Ward 3 is um has perpetuated exclusion, and we appreciate that you have um been a leader on speaking out against that and and moving different kinds of legislative uh things to to address that, and this is it's absolutely essential that we we really push forward.

Um, and we think that the original Riff Valley project is the best way to achieve that.

Thank you.

All right, thank you very much.

Um I'm gonna mess up Charnell Cheneys, so I like Rodrigo.

I I've brought uh uh Ricardo Rodrigo.

I failed, but Sharnell.

Yes, that's okay.

It's Sean.

My name is Sean L.

Cheney, and I live in Ward 8, and I'm a volunteer with the DC Community Wealth Builders, which is a coalition to build shared ownership legally, locally rooted wealth and an economic strategy that supports local infrastructure instead of corporate incentives.

I'm submitting my testimony and strong support of starting the people bank, the people's bank and putting DC's wealth support and expanding worker ownership and cooperative conversions in the District of Columbia.

I'm currently in the process of transitioning my company, Bo Yoga, into a worker-owned worker owner cooperative.

Through this experience, I have seen both the challenges and the promises of shifting traditional businesses into share ownership models that censors workers' community stability and long-term local wealth building.

This proposal addresses urgent issues in our communities.

Too often in DC, small and legacy businesses close businesses close not because they're a failing, but because there is no clear path for secession or transition.

When that happens, we lose jobs, we lose cultural spaces, and we lose local wealth that could have stayed in our neighborhoods.

This proposal provides real solutions.

First, we're asking for a technical assistant grant for cooperative convergence.

This is essential because most smallest business owners and workers do not currently have access to the legal, financial and structural support needed to successfully transition into worker ownership.

Second, we're asking for tax incentives for business owners who choose to convert their businesses into cooperatives instead of closing or selling to outside buyers.

This helps keep this helps keep businesses rooted in the community and prevent unnecessary closures.

I also want to uplift and support the role of the DC land bank.

One of the people banks, one of the people's banks we are proposing in these in this ecosystem.

My axe is that the land bank be actively aligned with cooperative development efforts and prioritize opportunities for worker owner cooperatives and community-based enterprises to access vacant or underutilized properties.

Without land access, cooperative ownership cannot fully take route or scale.

We need pathways for community ownership, not just businesses, not just of businesses, but of the spaces they operate in.

Together, these two do more than preserve businesses.

They create pathways for economic transformation.

The bill also addresses a deeper issue.

Moving moving from an economic uh economic moving from an economy that only create jobs to ones that creates wealth.

We need more than employment.

We need ownership.

We need systems where workers can build equity in places they sustain every day.

As someone from Wardy, I want to see my neighbors building economic power, not just working jobs.

I want to see wealth create, I want to see wealth created and kept in DC communities.

Cooperative coercive make that possible.

They keep DC wealth in DC, strengthen local neighborhoods, and build more and build a more just and resilient economy.

I strongly urge you to support this proposal.

Thank you for your time and consideration.

Thank you very much, Ms.

Cheney.

So I the land bank and the public bank are things I need to be briefed on, but I think I'm gonna ask my daughter how it is that they're doing it and what it sounds like you're working your way through this process as well.

So that can be done.

Really appreciate your testimony.

Um Ms.

Court, we've been having a conversation for 15 years, I think.

Uh so I don't know that we'll do it here, and um, but I hear you on uh what you're hoping for in the in the Chevy Chase Civic Court.

Um do think it's it's interesting that how important you view this project because you focus on the whole city, and there's a whole lot of things out there that moving parts, and yet it's this one that you focus on because explain to me why.

Well, first of all, we um advocated and won an RFP process for the Tenley Town Library, and as you'll know, we did not build any affordable housing at the Tenley Town Library.

So we're uh pretty bitter about losing that opportunity because we got all the way down the road with a developer selected and everything.

So um it is still in the power of opponents to block housing opportunities in Ward 3 and affordable housing opportunities, so we are determined to not let them win this time.

Um and there are a lot of Chevy Chase residents who agree with us and are uh really foot fighting for bringing affordable housing to a community that has very um little affordable housing.

All right.

Well, thank you very much.

And I was involved in that Tendley Town Library issue as well, as you probably will remember.

Thank you very much for your testimony.

I think we will now move to uh to our virtual witnesses.

I think I've um we don't have anybody here who had wished to testify uh in person who hasn't had the opportunity.

For each of the virtual witnesses, I will call your name and a member of my staff will make you a panelist.

If you wish to appear on video, you must click the button in the toolbar at the bottom of your screen that looks like a video camera.

Please remain muted until it is your turn to testify.

When it is your turn to testify, please unmute yourself.

Once all the virtual witnesses testify in each panel of four, I and if there are other council members who join, uh, may ask a round of questions, so please stay on Zoom, muted until you are recalled.

Um for any technical difficulties, send a message to the host, which is labeled Committee on Human Services, and they will follow up with you.

Additionally, if you are having trouble gaining access to the Zoom and you have pre-registered, you can reach my team at human services at DC Council.gov, and they will try to resolve your issue.

Now let's turn to our first panel of witnesses.

I'm told Ashley Ruff, who was going to be an in-person witness is gonna testify virtually.

So uh Ashley Ruff, Jeremy Sherman, Shira Davidson, Jamila White.

All right, uh Ms.

Davidson and Ms.

White on Okay, we will we will start with these witnesses and then move to the next.

So uh Ms.

Ruff.

Um good morning, Chairman uh Firmman.

I am representing ANC Seven, so I am in my commissioner capacity today.

Um, and I thank you for the opportunity and to the rest of the council for me to be able to speak this morning.

Um, so I'm gonna begin my testimony.

Again, thank you for the opportunity today to testify for the Department of Umic Development and this proposed budget.

I've been listening closely to the witnesses this morning.

I've heard thoughtful conversations about land banks, large scales development, and economic growth.

But I've only heard maybe two people meaningfully include East of the River in that vision, and that is deeply concerning.

Because East of the River is just not ward seven and eight.

It includes parts of ward five and six.

It is Ancrossia and beyond.

It is a connected community, and yet too often it is treated as a neighborhood with an afterthought when it comes to investment.

What I'm hearing is development.

What I'm not hearing is equity.

We continue to talk about projects like RFK with detailed projections, how many homes and how many businesses, how much the city is investing.

But when you break it down, the return to residents, especially East of the Rivers, is limited.

To many of those jobs are temporary, too few create long-term um stability.

Uh so my question remains where is the money for East of the River in this budget?

And I want to bring this down to real life.

Starting in June, SNAP benefits are changing.

For many families, that means less support at a time when food prices are still high.

So let's be honest.

How many people in the city, including ANC commissioners, frontline workers, and even government employees rely on some form of assistance just to get by?

We need help too.

Because right now, even working families cannot afford basics, and the East of the River residents are being hit even harder because we don't have consistent access to full-service grocery stores in our own communities.

So when benefits are reduced, prices remain high, and access is limited.

What are we supposed to do?

That is exactly why the Food Policy Council works matter and why it must be funded.

Food policy is an economical policy.

When we invest in food access, we are reducing health disparities, supporting local growers and small businesses, creating sustainable community-based jobs, keeping dollars circulating within our community.

That means funding groceries east of the river.

That means supporting models like Roch Rosies, where food is grown locally, sold locally, and profit stay within the community.

That means investing in main street corridors like Minnesota Avenue and H Street Corridor, so they can become real economic engines.

Right now, many residents have to leave their neighborhoods just to buy groceries.

That means paying for transportation, bus fare, train fare, or ride share just to access basic needs.

Meanwhile, what are we getting?

More carryouts, more fried food chains, more smoke shops.

This is not an economical development.

This is a lack of intentional investment.

And when we talk about land banks, I want to be clear.

I want to ask clearly.

Who are they being designed to serve?

Because land banks have done right could be a powerful tool for equity.

They could turn vacant and under uh utilized properties into grocery stores, fresh food markets, and community serving businesses.

No barriers for local entrepreneurs to access space, stabilize neighborhoods, and prevent displacement.

But without targeted funding and intentional policy, they risk becoming just another tool that bypasses east of the river.

And I don't know what my time is looking like, um, Chairman.

But lastly, how can tax abatements be used uh to incentive grocery stores, healthy food retailers, and small businesses to locate east of the river.

How can we ensure those incentives actually lower costs for residents and create long-term affordability?

Because without investments, these tools don't work.

Without funding, these strategies don't reach the communities that need them most.

This is not just about development.

This is about outcomes.

If we do not have, if we do not invest in food access, small businesses and equitable development east of the river, families will continue to struggle with rising costs, health disparities will continue to grow.

Low economies will continue to be underdeveloped.

But if we do invest, we create stable jobs, not temporary ones.

We support working families, including public servants who are struggling to keep up.

We build commun communities where people can leave, live, eat, and thrive without letting leaving their neighborhoods.

I don't come here today with the long prepare statement, even though it was.

I came with what I heard and what I see as disparities in my communities.

Those disparities make the need clear.

We need a budget that reflects equity.

We need a budget that reflects access.

We need a budget that makes real intentional investments in the East of the River through food policy, land use and economical development.

So our residents can succeed just like every other ward in this city.

And lastly, also uh Chairman, I want I heard the young lady talk about bringing uh betting here.

My questions today is how are we going to bring betting here?

And we got all these other issues.

So, what are they going to give to us?

Because we know they want to put the betting over at East of the River.

So thank you for the time, and thank you, everyone, for hearing me out this morning.

Thank you.

Thank you very much, Ms.

Rough.

Um, Mr.

Sherman.

Yeah, good morning, uh, Chairman Freeman, staff, and members of the committee.

My name is Jeremy Sherman, and I serve as advisory neighborhood commissioner for 1A04 in Columbia Heights.

I'm also the chair of ANC1A and our small business and economic development committee.

I'm here today to advocate for Columbia Heights, a neighborhood that has been overlooked for meaningful economic investment in over 20 years.

Columbia Heights is a major commercial destination featuring one of the top 10 busiest metro stations, one of three target stores in DC, the city's only best buy, and dozens of minority owned small businesses.

We function as a downtown of our own, a high density, transit accessible, retail heavy corridor that serves as a central economic hub for Ward 1 and beyond.

But despite these assets, we've been in economic decline without meaningful attention for nearly 20 years.

Property owners have been largely disengaged, failing to reinvest in the community.

And it shows DC USA and the surrounding corridor are home to numerous large footprint retail spaces sitting vacant, including the former five below, PETCO, DSW, Wawa, and CVS locations.

These are stores that occupy thousands of square feet and once anchored foot traffic for the entire corridor.

Many are sitting dark with barely a four-lease sign in the window, and major property owners are doing little to actively recruit tenants and reduce barriers.

When I look at the FY27 budget, I see targeted investments in downtown, Tacoma, Friendship Heights, Fort Totten, and Deanwood.

And I see support for new developments and conversions across the city, but Columbia Heights is not on that list.

In December 2025, ANC1A sent a formal letter to Demped and this council's committee on business and economic development, covering our FY27 budget priorities.

I want to highlight a few of those here.

DC government owns the parking garage at DC USA.

That ownership gives the city direct leverage and is seat at the table with property owners in the area.

Demped should be using that leverage to pressure property owners to actively market those spaces and fill them with businesses.

Dembet has done this kind of strategic hands-on work in Anacostia, H Street, and Shaw, to name a few.

Those quarters received active tenant outreach, marketing support, business recruitment campaigns, and tenant stabilization tools.

Even a modest investment would make a difference for Columbia Heights.

We requested a small appropriation for corridor marketing and activation along 14th Street and 11th Street, mirroring what was already allocated for A Street North Northeast in the FY26 budget.

We are also calling for a Columbia Heights lease incentive pilot program modeled on the Chinatown long-term lease grant program in the FY26 Budget Support Act.

That program received 125K in FY25 and 20 uh 250K in FY26.

Columbia Heights has a similar similar commercial footprint, and if a lease incentive program makes sense there, it makes sense in Columbia Heights.

One final thing, I want to flag the uh Columbia Heights neighborhood management authority legislation that Council Member Nado introduced last year.

A traditional business improvement district has not worked in Columbia Heights because of unquote oper uncooperative property owners.

The NMA concept offers a different path, a community-governed funding model with sustainable, diversified revenue.

I encourage this committee to schedule a hearing so neighbors and small business owners can make their voices heard.

Chairman Freeman, I kindly ask you to work with Councilmember Nadeau and Demped to support Columbia Heights' economic recovery in this fiscal year and beyond.

Thank you for the opportunity to testify, and I'm happy to answer any questions.

Thank you very much.

Uh Ms.

Davidson.

Hi, thank you so much.

Ever since living in Columbia Heights, I've been fortunate to patronize a small restaurant in my SMD 1A08.

Building a relationship with the owner, Carlos.

Maybe a year ago, I found myself talking late into the night with him, listening to him tell me the story of how he came to this country.

Originally from El Salvador, he had a degree in credentials and clinical psychology, but after standing up to his authoritarian government, he had to flee the country and come to America.

Due to struggles transferring his credentials, he was unable to continue his clinical practice and instead worked hard to open a small business here in Columbia Heights.

Carlos is an example of what the American dream looks like.

Columbia Heights is a vital economic and cultural anchor within the district, representing a legacy of resilience, entrepreneurship, activism, and diversity.

In recent years, Columbia Heights has remained subject to inconsistent policy prioritization, overpromised and underdelivered resource allocation, and uncoordinated planning implementation efforts, resulting in the proliferation of vacant commercial and residential properties, displacement of legacy businesses, and heightened public safety concerns.

According to Armada ridership data, the Columbia Heights Metro sees as many as 11,400 people on a daily basis, remaining one of the top 10 metro stations.

However, Columbia Heights continues to have to compete for resources.

The Great Streets program has 13 corridors, with the 14th and U Street Corridor, the only one to be split across neighborhoods, spanning three distinct neighborhoods and commercial corridors, Adams Morgan, Mount Pleasant, and Columbia Heights.

Unfortunately, the mayor and city council continue to subvert responsibility for declining economic investment in Columbia Heights over and over, pointing to street vendors as being the sole force in our economic decline, despite vendors only being located on a single block across the entirety of the neighborhood.

The mayor's priorities continue to be clear.

The Dim Ped economic development budget has been cut 60% since just 2024.

I fully appreciate the impossibility of the past two budget seasons.

But it is time that developing our small businesses stops being treated as a burden and starts being treated as a strategic investment that it is.

When small businesses thrive, revenue increases, residents move in and stay, and public safety improves.

Economic development of our commercial corridors is not a budget drain.

It is a critical strategic investment benefiting the entirety of the district.

I'm imploring you to consider the recommendations put forward by ANC 1A, the creation of a Columbia Heights long-term lease incentive pilot, one-time funds for corridor activation, incentive programs for property owners to offer competitive lease terms and low barrier technical assistance.

Further, I'm requesting the separation of the three entirely distinct neighborhoods from within the single Great Streets corridor of use in 14th Street.

Additionally, the removal of unnecessary and duplicative components of an administrative burdens from the Great Streets grant process that makes it wholly inaccessible to small business owners without the capacity of a dedicated grant writer or the time that is currently necessary to complete it.

Lastly, this implementation these implementations will not be possible without thoughtful and proactive collaboration across agencies to improve and sustain street streetscape improvements, better pedestrian infrastructure, neighborhood branding, and public realm investments.

A few months ago, I was at the restaurant speaking with Carlos again.

Except this time we were speaking in hushed voices, so his employees, whom he hadn't yet told, wouldn't hear that they were going out of business.

Between the endless red tape, opaque administrative burdens, increased costs, and most recently federal intrusion threatening our immigrant workforce, he could no longer sustain to be in business.

The message from the mayor is clear.

It is not a place where neighbors in Columbia Heights feel prioritized, but it doesn't have to be this way.

Thank you, Chair, for your for the time.

All right, thank thank you very much for your testimony.

Um Councilmember Nadeau has raised the legislation issue with us.

I don't think that's a thing that we will focus on before the fall at the earliest given the budget things that are happening.

But the ANC commissioners in uh ward one have been very effective in their outreach.

You are speaking in one voice, um, and so grateful for that.

Ums Ruff, I I hear you on the concerns about East of the River and the Food Policy Council.

I will say, I mean, I do think nobody's gonna make any promises in this budget season, but uh it the defunding of the Food Policy Council looks like a mistake to me.

I actually feel a kind of special obligation in this setting because it was my predecessor, uh Councilmember Che who created the Food Policy Council, which I think was really an important innovation for the reasons that you listed.

So thank you for your testimony on that subject.

I think we're gonna move to the next panel, but thank you to all of you for your testimony.

And if you haven't submitted it in writing, please do.

Submitted it earlier today.

Thank you very much.

All right, thank you.

Thank you.

Thank you.

Uh Ryan Bose.

Sahand Miramini.

I think I've heard the next witness is going to test will testify later.

Carrie NcCarthy.

Uh Daniel Burke.

Okay.

Um let's start with Mr.

Bose when you're ready.

All right.

Thank you.

And good morning, uh, Chairperson Freeman.

My name is Ryan Boss.

Pronouns are he, him, and I serve as the CEO and president of the Capital Pride Alliance.

I want to thank my colleagues who testified earlier and want to underscore a few of the points that they made.

Capital Pride is a multi-day cultural and community event that is an economic engine for the District of Columbia.

And it includes the Pride Festival and Concert, which is actually one of the few remaining and largest events of its kind that is free to the general public.

You've also heard the numbers.

Approximately $370 million of impact to the DMV, translating to $245 million in DC alone annually.

We also routinely hear that LGBTQ businesses, specifically in the hospitality industry, rely on Pride Weekend for them to remain in business.

It was an exciting and rewarding experience at a time that attacks have increased exponentially to our community last year.

And the numbers generated around $310 million of economic impact for DC alone.

We want to thank the DC government for their overwhelming support, specifically, specifically Deputy Mayor Nina Albert through the support from the special event relief fund since COVID.

Due to this support, we also have been able to provide 50% of the overhead costs to support keeping the doors open at the LGBTQ plus community center.

Something that hasn't been shared yet is the history of the fees.

So I want to share that this year we have only received a commitment of less than 20% of the fees through the SURF grant.

And since COVID, we have been receiving 100%.

That is what allowed us to actually produce world pride.

Without that 100% support, world pride would not have happened.

In 2012, my first year, fees were under $100,000.

By 2017, fees had increased to over 200,000.

By 2019, 300,000.

And in 2022, when we were emerging from COVID, it was estimated fees were over a half a million dollars.

And we were in the midst of canceling the Parade and Festival when thankfully the SURF grant was reenvisioned and was able to provide 100% support.

In 2024 and 2026, it has now estimated that fees will surpass 1.6 million dollars.

With only 20% support from the DC government, the Capitol Pride Parade Festival and concert just will not be possible.

So after receiving 100% support since COVID for the support of World Pride, we really hope that we can continue to have the DC government's partnership.

Since we know that Capitol Pride annually is an economic engine.

Pride is universal.

Everyone should have the right to be prideful in who they are, regardless of how they identify.

So let's continue to partner to produce this high caliber event that uplifts Washington, D.C.

Makes folks who live here have a great place to live, as well as bring people to DC to visit.

Thank you very much.

Thank you.

I think you're on mute.

Thank you.

Good afternoon.

My name is Sahan Mirmany.

I serve as the director of operations for the Capital Pride Alliance.

I bring over 15 years of experience planning and executing large scale events here in Washington, D.C.

I'm here to underscore the critical importance of DC government's in-kind agency support for large-scale events and the essential role that it plays in the health and safety of all of us.

Large scale events require coordinated planning across public safety, transportation, emergency management, public works and health services.

And no single organization, including ours, no matter how experienced, can replicate the level of expertise, infrastructure, and responsiveness that the DC government agencies provide.

And this support isn't supplemental, it's foundational.

What makes this model particularly effective is that it fosters a partnership, not a transactional relationship.

Capital Pride does not view DC agencies as vendors, but as collaborators.

We plan together, problem solve together, and share unified responsibility to the public.

This partnership allows for more proactive planning, and I have thoroughly enjoyed working in collaborative collaboratively with the amazing teams in DC's agencies and Demped's support during the past few years has allowed our small nonprofit to survive.

Estimates for city services on a typical year have fluctuated, often reaching numbers recently above 1.6 million dollars.

And because hundreds of the hardworking city employees involved involved in these large scale events are given overtime, that cost is passed on to us as the planners.

In other words, the cost for a weekend of city services could be higher than our entire annual budget, including the cost to produce dozens of events throughout the year beyond for the pride celebration, payroll vendor fees, et cetera.

Based on previous years, we project this year's bills for city support to include uh DC Public Works for 130,000, DC Fire EMS for 75,000, DC MPD for almost 1.5 million dollars, the Department of Transportation for over $15,000, as well as other expenses paid to agencies such as APCA, Department of Buildings, and DLCP.

I want to say that we mutually invest in safety measures and infrastructure required by the DC government.

For example, we are required to install barricades for the Pride Parade specifically, something that other major cities install themselves at no cost.

The cost for barricades alone is over 100,000.

Our organization is also has also spent six figures on insurance policies required by the district, and we have been able to afford these types of expenses because of DEMPED's full support.

Without this support, event organizers would face significant barriers in meeting the safety and operational standards that DC rightfully expects.

Costs would rise, risk risks would increase, and often in these situations, organizers are often forced to cut corners or provide services for crowds that are much smaller than what is projected.

In my discussions with other event planners, it has also raised the question regarding moving events outside of the district to Virginia and Maryland, and we really don't want to do this.

So in-cont agency supports and ensures that our events remain safe for everyone, including DC residents, and we thank you for your support and really hope that we can uh count on it this year.

Thank you so much.

Thank you very much.

Uh Carrie Eng.

Technology, yes.

Good morning.

Good morning, Chair Furman and committee members.

Thank you for the opportunity to testify.

Uh my name is Carrie Ng.

I am a Ward 6 president and a volunteer with community wealth builders interested in local investment and public goods, such as food security and their spaces.

I am here today to ask the Dem Ped to finish studying and begin implementing a land bank and public bank to invest DC's wealth back into our local community.

DC is sitting over on over a billion dollars worth of vacant properties instead of providing incentives to housing developers or perforations that extract value out of DC and its residents.

DC could be using these assets to finance projects directly, uh such as Gosh stores east of the river or creating business infrastructure for local organizations to name a few examples.

Under the current system, deals with corporations have failed SP4, such as with Walmart pulling out of its promise to build stores in Ward 7 and 8.

We can create a system that works for us.

DC land bank or public bank would make the revenue of the city and allow DC to address needs in our community.

This may seem like a daunting task, but you know, there's other leaning banks operating around the country and DC can learn from these examples.

Thank you, Chair Furman, for earlier remarks about looking into this further.

I again ask that uh Dempad finish studying and begin uh implementing the land bank and public bank to invest back into our local community.

Thank you for your time.

Thank you very much for your testimony.

Uh Mr.

Burke.

Good morning, Chairperson Fruman and members of the committee.

Thank you for the opportunity to testify.

My name is Daniel Burge.

I am the director of the Alice M.

Rivillan Initiative for Economic Policy and Competitiveness at the DC Policy Center.

An independent, nonpartisan think tank advancing policies for a strong, vibrant, and compelling District of Columbia.

Today, my testimony will focus on what the DC Policy Center's quarterly business sentiment survey suggests about local business conditions.

I will also make brief remarks about the proposed budget as it relates to DemPed.

Let me start by giving some background on the survey.

The survey is regional in scope, but includes a significant share of DC businesses.

Many businesses that fill out our survey have been in operation for over a decade and have 20 employees or fewer.

Given that the survey draws from a select group of businesses, the findings are best viewed as a directional signal that complements public data rather than being fully representative.

To put the point differently, the survey is most useful in its directional signal when it aligns with public data, and when it does not, it points to issues to monitor over time for convergence with the hard data.

Two findings stand out from our recently completed round in mid-January 2026.

For context, this round captured 226 responses.

For a notable share of surveyed businesses, demand has weakened and costs have increased in the three months leading up to the January survey.

27% of surveyed businesses saw declines in demand for their core products or services, while 30% reported increases in core input costs.

To be sure, around 60% of surveyed businesses reported that conditions did not substantially change, but among those reporting of change, conditions worsened on balance.

Second, surveyed businesses are not hiring.

A substantial majority of surveyed businesses held staff numbers steady or cut them in the three months leading up to the survey, just one percent added staff.

In 2025, across four rounds, anywhere between three and six surveyed businesses reported adding staff.

Um in the three months before the survey.

The sluggish hiring likely reflects the poor local job market since the COVID-19 pandemic.

Between February 2020 and December 2025, the district shed approximately 79,800 jobs.

Against this challenging backdrop, I want to highlight two aspects of the 2027 proposed budget as it relates to DENPEB.

First, a move toward exempting vitality fund recipients from forced service requirements.

Workforce development programs are a more efficient way to boost residents' labor market prospects because they don't interfere with the employer to employee matching process.

Second, the proposed 2027 budget should be commended for its broad continuing support for local businesses.

Thank you, and I welcome your questions.

I believe everybody on this panel has testified.

Mr.

Burge, uh I'll go back and review the survey that you are citing.

Some of the dynamics that you're talking about, I think are broader than the District of Columbia, the slow hiring, the increasing costs, uh, but they do represent the challenges and headwinds that we all face.

But maybe particularly here, I would think, and maybe you can comment on this, that the loss of federal jobs and the loss of jobs associated with the federal government creates another headwind.

I don't think you referenced that, but how do you see that fitting into the challenges for the district?

Yes, I completely agree with you that the loss of federal jobs has been an important um strain on the district's local economy.

Just for some background between January 2025 and January 2026, um, 26,000 approximately federal jobs were lost.

That's a 14% decline.

And so the federal cutbacks uh just to put the point again have been a you know a very substantial headwind for the district's uh local economy.

All right.

Thank you very much.

Uh Ms.

Hang, I do think um we've had a number of folks testify from the wealth builders and and we have thank you for acknowledging that we have reviewed it in earlier testimony.

Um Mr.

Meramini, please don't say that the pride might go someplace outside of the district.

Um we can't we it we can't let that happen.

Um Mr.

Bose, um I think you gave the numbers that I was looking for, and I think let me make sure that I understand it completely.

I it is I understood your testimony.

In recent years, the city has completely covered.

But for the next year in FY27, the concern is the city would not completely cover but only cover up to 20 percent of the fees and costs, and that those now amount to 1.6 million.

And what you're looking for is relief from that potential $1.28 million bill that you have not had in previous years or in previous recent years.

Am I understanding it correctly?

It would actually be for FY26 for this year.

So the fee we received 100% since COVID.

And then post-world pride now.

Currently have only been committed to approximately 20%.

And it's it's difficult because we only get estimated fees.

And that's something that we want to continue, especially knowing that this event specifically and others like it generate so much economic impact for our city when other areas are obviously getting cut back.

Okay, so let me revise and make sure that I understand it.

So the the events are coming up soon.

So and then so in FY26, this is an this is an issue for the supplemental to some extent that you would like to see something done in the supplemental to ensure that you get fully reimbursed for the fees, as you have been previously, and you would then avoid the kind of bill that I'm talking about.

I assume you would want a commitment going forward that the all of the fees would be covered.

So it wouldn't just be in the supplemental, it could be in the budget going forward.

And maybe reading between the lines, maybe not so much between the lines.

The implication is if you get hit with this bill for the upcoming event, that as you plan for future events, you'd need to take that into account and to deciding where it is that you would do for future pride events.

Is now am I getting it?

Yes, very uh yes.

Uh we would have to totally reenvision what pride looks like here in the nation's capital.

Uh and as we learned from World Pride, you know, there were calls for us to cancel World Pride, and we knew it was important being here in the nation's capital in the District of Columbia, that we had to, you know, use this opportunity because we knew whatever we chose, it would impact other cities around the country.

Um so yes, um, if we can't get a commitment for this year, it will we will need to make some drastic changes in the short term to get for what June will look like.

Um, and then as you know, June uh eloquently talked about, it not only impacts the events, um, but it also impacts our businesses in the community who also rely on pride annually, um, as well as our ability to continue to support the community center.

Um so it there's there's impacts in many different um facets.

So if we and yes, we can't keep going through this cycle every year.

Uh there needs to be some long-standing commitment so that we can plan accordingly to ensure these events stay in DC.

Okay.

Message received.

Um we will move on to our next panel.

Um Eric Mulata, uh Christopher Khleetri, Max Broad, Meg McGuire, David Moloff.

All right, Mr.

Molada, when you are ready.

Good morning, Chairperson Truman, members of the Committee on Human Services and Staff.

My name is Eric Mulana, and I'm the Vice President of Development and Dallian Development.

I appreciate the opportunity to offer testimony on the fiscal year 2027 budget for the Deputy Mayor for Planning and Economic Development.

I'm here today to provide feedback on the fiscal year 2027 Budget Support Act, specifically Title II, Subtitle D, Development of Former Federal Properties and Subtitle Federal Properties Tax Fund.

Earlier this year, Galleon Development purchased the former GSA Regional Office Building, also known as the ROB building from the federal government.

This purchase was the first of its kind and represents a meaningful step for transforming underutilized federal assets in the district.

As drafted, several provisions, subtitle B and F pose challenges for our redevelopment of the ROB building.

I am asking the council to make three modifications to subtitle D and F to ensure they support rather than impede the redevelopment of former federal properties across the district.

First, I urge the council to change the qualification date in subtitle D from October 1st 2026 to January 1st, 2026.

This change would allow the ROB building, the former federal property we purchased in March of this year to qualify for the tax abatement available under this subtitle.

Without this change, the federal property development tax incentive created by this subtitle excludes the only former federal property being redeveloped, undermining the policy's intention and will hinder our ability to make this redevelopment economically viable.

Second, to maintain consistency, the change in subtitle D, I recommend modifying the definition of covered former federal property in subtitle F, presently a covered former federal property is a property that, among other requirements, was disposed of by the federal government to the district after October 1st, 2026, or disposed of or ground lease by the federal government to a private entity after October 1st, 2026.

Revising the state to January 1st, 2026 would ensure consistency across the two subtitles and allow our property purchased in March of 2026 to qualify as a covered former federal property.

Third, I urge the council to amend the language allowing federal properties tax fund to be used for infrastructure improvements, civic projects, redevelopment, and property active acquisition in the central Washington area.

I asked the council, amend this provision to direct that monies in the fund be used exclusively for improvements, projects, redevelopments within the same business improvement district on which funds were generated.

As the first and currently only contributing project, it is both reasonable and equitable that these funds be reinvested in the immediate neighborhood where they originate.

Tying the use of the funds to the business improvement district in which they are generated ensures that the infrastructure and public realm improvements necessary to pull to support successful redevelopment accrue to the community that produce them.

Together, these changes will better position the redevelopment of former federal properties to succeed.

Without these proposed changes, the district risks delaying or losing transformative projects like the ROB building that are essential to meeting our housing revitalization and economic development goals.

Thank you for your attention and for the opportunity to testify.

Mr.

Callatry.

Ainsworth is a global manufacturer of gaming equipment, and we develop and supply historical horse racing systems in regulated jurisdictions across the United States.

I'm here today to provide a practical industry perspective on how historical horse racing, commonly referred to as HHR, actually works and how it can be implemented in a controlled, compliant, and transparent way.

At its core, HHR is not a new form of gambling.

It is a modernized version of paramutual wagering on horse racing.

Each wager is placed into a shared pool and the payouts are determined by a distribution of wagers within that pool, not by a house advantaged or fixed odds model.

What makes HHR unique is that it uses anonymized previously run horse races.

Before placing a wager, the patron is shown a limited past performance data, similar to what you would see in a racing form, but the identity of the horse races, the horses, the jockeys is not revealed until after the wager is placed.

This preserves the integrity of the pair mutual system while allowing for modern accessible experience.

From an operational standpoint, these systems are highly regulated.

Every race outcome is drawn from a secure database of historical horse races.

The wagering pools are independently managed and auditable, and the systems are tested and certified to ensure compliance with the state law and regulatory standards.

I want to be clear on one point that often comes up.

HHR terminals are not slot machines.

They do not use random number generators to determine the outcomes.

Each result is tied to an actual previously run race, and each wager participates in a paramutual pool.

In jurisdictions where HHR has been authorized, such as Kentucky and Virginia, these systems are deployed exclusively in licensed in-person facilities.

That structure provides regulators with clear oversight, allows for robust compliance monitoring, and ensures that activity is conducted in a controlled environment.

From an economic standpoint, HHR facilities are not just wagering venues.

They are physical destinations.

They support jobs and operations, food beverage, security, and facility management.

They drive foot traffic and create opportunities for complementary development.

Equally important, these systems can be scaled and tailored.

Policymakers can determine the number of locations, the number of terminals, and the regulatory conditions under which they operate.

That flexibility allows a jurisdiction to design a model that aligns with their specific financial goals.

If the district chooses to move forward, the keys to success will be in the clarity in the statutory framework and consistency and regulation.

Without those in place, HHR or with those in place, HHR can be implemented in a way that is transparent, well-regulated, and aligns with the district's broader economic development objectives.

Thank you again.

Happy to answer any questions.

Thank you for your testimony.

Mr.

Broad.

Hello, Councilmember Fruman and members and staff of the Committee on Human Services.

My name is Max Broad.

I'm here today to express deep concern about the food policy council being repealed by the mayor's budget proposal and the important role that this office plays in both economic development and the district's sustainability goals.

So, you know, the mayor's proposal would remove the district's primary food systems capacity at the exact moment where federal food support is shrinking, food businesses are under immense strain, and years of progress on values-based procurement are at risk of unraveling.

Now, the mayor has not only proposed eliminating the office's funding, but also introduced the Food Policy Functions Amendment Act of 2026, which is within the Budget Support Act.

This would permanently dissolve the Food Policy Council, directly undermining the Food Policy Council and Director Establishment Act of 2014, which was championed by Council Members Che Grasso and Wells that signed into law in 2015.

So, you know, the Food Policy Council has had many wins over the past few years.

They've secured over 200, 200, sorry, 200, 200 million dollars in federal and philanthropic support for the district's food system.

Um, $80 million annually for Sunbox, $50 million during COVID for emergency food access, $2.4 million in resilient food system infrastructure grants, RFSI.

They've had they've led on multiple policies informing key legislation on food systems for the district, and also published uh with great policy acumen, uh different cross-agency reports on food access, the food economy, hunger among seniors, LGBTQ residents, thinking about college students, data that would otherwise remain silent or inaccessible.

They've assisted with emergency resilience during crises, including COVID-19, federal government shutdowns, and even the recent 2026 snow creek storm.

So, you know, they have an intangible but irreplaceable value.

Um, they serve as the district's central hub for food systems knowledge.

Uh the food policy directors of the director herself has had an immense ability to connect issues across agencies and sectors.

And, you know, the food policy council also provides a home for the food advocacy community, an anchor for collaboration, institutional memory, and shared priorities.

Um, I urge the DC council to restore funding for the Food Policy Council and reject the mayor's proposal.

If the Office of Planning is no longer the right home, other agencies, such as the Department of Energy Environment, DC Health, or Deputy Mayor for Planning and Economic Development are well aligned.

Demped, in particular, already supports food-regulated businesses through programs like Nourish the C, Mickey, and a natural fit.

I also urge the council to pass the Food Policy Council Procurement Act 2025.

This bill would strengthen the district's procurement expertise to ensure food purchasing aligns with community values, supports local businesses, and delivers cost savings.

Importantly, the build leverages a federal grant that covers half the cost of this role in FY27.

By appropriating 100,000 in FY27, the district would unlock federal dollars and invest in a position that pays for itself through improved procurement efficiency.

Thank you for your time.

Thank you for for your testimony, Ms.

Brown, thank you for your work in this area.

Referenced it a little bit earlier, and you also deeply concerned in an environment where access to SNAP is going to get harder.

So the need for safety nets in this area and uh coordinated policy is that much more important.

So thank you again for your work on this.

Um Mr.

Khitree, I actually, I mean, I'm learning, and I didn't know what HHR was, but now I'm trying to envision what it is.

And the idea that I think I had blended it with off-track betting, where you know there's a race that's about to happen, and people participate by betting on that race and they watch it on a screen.

This is different.

This is old races.

And then how does it I sit at a terminal?

I'm given information about a race.

I pick the I pick a win place or show or I do what I would do at uh and then does it show me the race?

Does it how what's the experience?

Yeah, the the terminals are not dissimilar from the current uh sports wagering terminals, uh, right?

You have a terminal in front of you.

And then yes, uh basically you have the option to pick uh win play show all the way down from one to eight of any of the races.

Um yeah, what is displayed on the screen is uh entertaining display of the previously run outcome, right?

So you'll see, you know, you'll see the horse races run across the top of the screen, and then in front of you there will also be a different display that'll be like you know, whatever a 777, right?

So it's just a different, a different implementation of the horse racing.

And so then you can be betting on such races 24 hours a day, because it's not that it's happening in the moment, it's a historic record of races.

Correct, or whatever whatever time period the district chooses to allow.

Ah, interesting.

Okay.

You you get to set that, right?

If you want to end at 2 a.m.

or 4 a.m.

or whatever, whatever legisl, whatever you legislate.

Okay.

All right.

Helpful learn again learning.

Um Mr.

Malada, uh exciting project that you are a part of.

Message received, um, particularly on the message received on the date issue, which I think is one that we have we had wondered about.

Um so let us see.

We'll we'll continue to exploit that idea.

Um the question of the limitation of where the funds go.

I had not heard that in that way.

Um, and I'm not we need to think about that, and I'll I will ask the deputy mayor about the rationale for the uh the boundaries of where the funds might be used, but thank you for your testimony.

And uh we want to see you succeed in this big project.

It's a very, very important one for the District of Columbia, so thank you for undertaking it, and we want to be supportive.

All right, I'm gonna go back to see if any of our people who had signed up to testify um and who we missed are here and want the opportunity to testify before we move to break.

I think Jamila White, if if Ms.

White is here somewhere, if she can elevate Mani Soubain, uh Ellen McCarthy, Meg McGuire, David Moloff.

We're about to go on break, so I'm going to do it just one last time just to be sure, Jamela White, Amani Subane, Ellen McCarthy, Meg McGuire.

David Marlov and anyone else online who was waiting to testify and hoping to testify, who has not, um, you can raise your hand.

Hearing none, we um we had structured this so that we would take a break between the public witnesses and the government witness.

So we are now going to recess uh we had said thirty minutes, but just for the for simplicity until twelve thirty.

Um and so we will come back at twelve thirty with our government witness.

Welcome back, everybody.

We're returned from recess, two minutes after I said, so it is the time is now twelve thirty two, and we've returned from recess.

We will now be joined by Nina Albert, Deputy Mayor for Planning and Economic Development and her team.

It is the practice of this committee to place our government witnesses under oath.

For those who will testify, will you please raise your right hand?

Do you swear or affirm under penalty of law that the testimony you are about to provide to the Committee on Human Services is the truth, the whole truth, and nothing but the truth.

And the city has a strong financial foundation on which we can build.

Demped's FY27 budget includes nearly 40 million dollars in operating funds, of which 12 million supports our 93 employees, and 27 million is used for non-personnel or contracting and grants services.

In Demped's FY27 capital budget, we are proposing 297 million dollars.

Some of those projects include 110 million to advance development at Hill East, Fletcher Johnson, and Poplar Point, and 21 million dollars for public space improvements at Gallery Place, Chinatown.

For us to remain a vibrant and growing economy, we need to diversify the industries and sectors that are in DC.

Our economic foundation will continue to include the federal government, health care, and education sectors, but growth in the areas of AI, cybersecurity, defense and space, gov tech generally, marketing and communications, as well as tourism, of which sports and entertainment contributes to, will play a more prominent role in the economy of our future.

The first investment in this year's budget to highlight is a permanent dedicated source of approximately $6 million in funding for the Washington, D.C.

economic partnership.

We generate this using a portion of hotel tax revenues.

This will create a sustainable marketing and business attraction capacity for the city, which is very much needed at this time.

We're also recommending $7 million total into the Vitality Fund and Tech Ecosystem funds, both of which provide incentives and support to strategically expand the DC economy.

Their existing facility has reached the end of its useful life, and keeping children's hospital in DC is both an economic imperative as well as a commitment to the families who depend on them.

Demped also supports the expansion and growth of local businesses.

Our FY27 budget includes $6.5 million for Great Streets and citywide grants that support local businesses, including restaurants and retailers who are in need of stabilization.

And last but not least is a $2 million contribution for special events and business activations that bring life and events into our neighborhoods.

And so we've proposed a variety of different measures to improve the certificate of occupancy and business licensing process because when a company is weighing DC against other jurisdictions, these types of details matter.

Not least of which, this very small geographic area produces a significant amount of DC's commercial property tax base.

And so it's a big generator for our economy, even though it's a very small area.

So we are working to attract new and expanded employers, but we also want to make downtown DC have a better mix of uses.

So right now it's 90% office, and what we want to do is shift that mix to include much more residential, some opportunities for hotel retail, and introduction of civic uses which do not exist today.

This work is complex and it does not happen on its own.

It requires investment in the public realm, the right policy tools to make redevelopment financially viable and incentives to reposition what would otherwise be vacant buildings.

Based on market feedback we've received to date, we in the Gro DC proposals want to improve the office to anything in housing in downtown programs by making them more attractive to prospective investors and tenants.

The FY27 budget also continues last year's investments in downtown with $17 million to improve 7th Street and $3.5 million to convert F Street in front of the Smithsonian Rentals Center into a Kerbless street so that it can function as a festival ground.

This year we're proposing two new projects.

One is $3.6 million to create a unique Chinatown alleyway and preserve the culture of Chinatown and create that landmark, as well as $5.4 million for a new pedestrian promenade on Connecticut Avenue.

In FY27, last but not least is of course completing the third of three phases of the $515 million investment in the Capital One arena, which contributes to our vision to make Gallery Place in Chinatown the region's epicenter of arts, culture, and entertainment.

Grow DC also addresses the challenge of federal downsizing into an opportunity to create new housing, retail, and community amenities.

This budget introduces a new tool to act on this.

Beginning October 1, 2026, all property tax and possessory interest tax from properties disposed of by the federal government will go into a federal property tax fund.

This fund will then be used to support the revitalization and transformation not only of downtown, but also of Southwest DC.

The eligible uses of the fund will be to support tax abatements if individual new property owners require them for repositioning the former federal buildings.

But the funds can also be used to make important infrastructure improvements, develop civic projects, and acquire property strategically if there is a justified public need and use.

Properties disposed of by the federal government, over 200,000 square feet will be eligible to apply for up to a 20-year tax abatement.

These abatements will help reduce the high costs associated with these extremely large-scale buildings and ensure that the sites do not remain vibrant.

And we also are adding, as we do with almost all of our tax abatement programs, the requirements for CBE contracting and first source hiring.

Housing is the foundation of a growing city, and one of our central challenges in the years ahead is how to produce it more efficiently and strategically.

We're examining all of our existing our existing policy environment.

We're building on the successes of the Rental Act, and we're also looking to our real estate projects to create new housing across the income spectrum.

Grow DC advances a new workforce housing opportunity tax abatement to incentivize workforce housing and to bridge financing gaps for projects that can advance now.

We're also proposing investments in housing projects across all eight wards, including $110 million from our capital budget to support Hill East, Fletcher Johnson, and Poplar Point.

We're also proposing a new 20-year tax abatement at five Wamata Metro stations that have the possibility of joint development.

And those are located at Friendship Heights Metro, Deanwood, Tacoma, Fort Totten, and Brookland Metro stations.

And then last but not least are three tax increment financing projects, one for Bryant Street in Ward 8, sorry, Ward 5, Northeast Heights in Ward 7, and the Reeves Center in Ward 1.

I'm proud of all of the proposals that we've made.

They are designed to advance our growth as an economy and as a community.

I look forward to partnering with the council to deliver results for our residents and businesses, and my staff and I are happy to address any questions that you have.

And in conclusion, I would like to introduce my staff that is with me at the table.

To my left is Latrina Owens.

She's my director of real estate in Demped.

To my right is Ben Stutz, the chief of staff for Demped.

And last but not least is Curtis Lewis, the agency fiscal officer for Demped.

Thank you.

Wonderful.

Thank you very much, Deputy Mayor Alpert.

We have been joined by Ward One Councilmember Brianna Doe.

Councilmember Nodeau, I don't know if you want to offer an opening statement.

Okay.

All right.

Well, let's let's jump in with some high-level questions.

The operating budget was reduced from 50.2 million in FY26 to 39.6 million in FY27 or a 21.1% reduction.

The economic development program incurred nearly all of those cuts.

What was DEMPED's approach to making reductions to the budget for FY27?

What were the priorities that were guiding you as you were making those cuts?

So as you look at the past couple fiscal years that in the economic development or what we call the business development part of DEMPED, there has been a steady decline from FY24, 25 and 26.

That is because we had an infusion of Federal funds into that program, which has allowed Demped to invest across the district and also specifically to support our Great Streets, locally made, you know, kind of food access fund, Nourish DC, whole variety of different grant programs.

So we are now at the last year currently in FY26 of expending those funds.

And in FY27, you will see that drop as a result of Federal funds burning off.

But in FY27, if you compare it to pre-COVID, we are at the same funding amounts.

So based on DC's local budget, we are flat, but it does look like a decrease as a result of those federal funds now being expended.

And is it that it's stepped down between FY25 and FY26, or is this the step down?

Did we were we at 50 for those previous years and now we're down to 40?

Well, there was a step down between FY25 and 26, and now there's the last step down between 26 and 27.

So is it all about that federal funding?

No, it's not.

It's also one-time enhancements.

Um last year's budget, you know, the council added to DEMPED's budget for a variety of different programs, um, which totaled $9.5 million.

Um and so in the mayor's budget, we are proposing what we did, or very similar to what we did uh last year, um, but uh without those one-time enhancements.

Okay.

All right, well, we'll go through the places where there have been reductions and talk about them individually as we move forward.

Um the proposed budget support act includes a workforce housing opportunity tax abatement, which some have inaccurately dubbed HANTA 2.0.

However, the WHO abatement differs from HANTA in that it is not geographically limited and it proposes slightly different affordability requirements.

What's the current status of the HANTA program, the high area need tax abatement or HANTA?

Are those funds expended, obligated across the financial plan?

Where does that stand?

So there was uh a program called HANTA, the high area needs assessment tax abatement.

Um the uh budget allocation or the budget appropriation for HANTA has been fully utilized.

Um as we started to evaluate whether or not to propose kind of uh a second round, if you will, uh, and repopulate uh and request more budget for HANTA specifically, we realize that there are a lot of projects that would benefit from workforce housing as well.

And as we look at the supply of housing across the district, um there continues to be a gap in our ability to uh provide programs or incentive for workforce housing.

So this is housing between 60 percent of area median income, uh up to uh 100 percent of area median income.

Um again, this is the workforce that uh our nonprofit uh users, our teachers, our policemen, um, you know, uh a large part of you know staff who work in hospitals and at universities.

Um so to be able to test and see the efficacy as well as um you know uh integrate more workforce housing into developments, we thought was an important investment.

It's really about projection of and what we've learned about launching a project and when a project is ready to fund.

So you know we just know that once we stand up the project, I mean the the program take applications um and then that uh developer goes and starts to seek financing it'll there'll just be a little bit of a implementation time frame.

And do you have projects in mind?

I mean have you have you been hearing from people that they'd like to do X and it would take a runway of this amount of time do you have some of some projects in mind for this program?

Well there definitely have been developers who have approached us and said that they could make a project work um you know if there was an ability to close the financial gap on the project and when we've talked about the possibility of including workforce housing you know they've shared what they think can happen.

So yes we've we always talk to the market as we are thinking about proposing something new and this was again a gap in the market that we and others have identified.

And when you crafted it, you're talking with the market and you're crafting it to what extent is most of the how much of the money do you think of as spoken for?

How much of it is for things not technically spoken for but you know you may have heard from five developers these projects could move forward and you put a budget mark for how much you want to put in there how much of it is associated with things you think are in the pipeline and and how much to things that are that may come forward in the future.

Well uh I mean we we know of some projects but it's definitely not all spoken for usually when we size a program it's based on kind of a how many units the program could produce and that we think is you know available and and realistic to deliver.

So it's more like that than it is about you know uh knowing today what project might deliver in two, three years from now.

And so and the FY29 start it's more about that the folks would have to you have to stand up the program and then you have to get applications and then they have to build things and then they get the tax abatement.

And so is the idea is it cost pressures in FY27 and 28 or is it that the runway to become operational for any new projects under this couldn't happen before FY29?

I mean I um I I don't I I don't know that it's not an either or there's a confluence of dynamics we have heard from projects that are ready to go now and that would be you know uh able to be to deliver workforce housing um you know if if there were a gap closing measure or you know program um but we also are putting this forward uh because um you know we we believe that this is the a good policy for the district um and so the timing uh is going to be variable I would be uh very reticent to um commit that you know a project will be ready to go at a time certain in this environment uh but at the same time we are aware that of projects that uh are stating that they could move forward I I don't know if uh Director Owens wants to no okay I mean for me as I look at this the HANTA is fully subscribed HANTA was a successful program would you say yes and HANTA focuses on areas where the need for affordable housing is particularly acute board three is one of those uh so I like HANTA but the decision not to simply extend HANTA but to go in another direction what what drove that?

And you've spoken to it I think a little like maybe there's an increased emphasis on workforce housing.

Well right now as I think has been discussed at length uh throughout the district for more than a year now our affordable housing market is um in you know is facing a pretty serious crisis uh and that is in the form of economic vacancy right now uh we have enough programs to support uh the pipeline or what we believe is demand for uh to build affordable housing through LITEC program through HPTF kind of through the uh you know uh I Z.

Um right now uh we have enough programs to support uh the pipeline or what we believe is demand for uh to build affordable housing through LITEC program through HPTF, kind of through the uh you know, uh I Z.

So there's a suite of uh programs uh designed for affordable housing below 60 percent of AMI.

Uh and so and and there is enough capacity in the programs that we currently have and in the budget that we've currently allocated to satisfy what we estimate to be um demand for those programs uh in the coming years.

Um and so there are other projects that would like to uh be able to move forward, and there's an opportunity to move forward with middle income housing and introducing some of that uh protected or covenanted uh income bracket uh into uh our portfolio and our suite.

So HANTA was aimed at 60 percent of AMI and below.

We have enough of those programs for the demand that there is today, which I will say has slowed tremendously.

So until the District of Columbia rectifies and gets um our uh portfolio vacancy numbers back into market norms, which is around five or six percent versus the current 15 to 20 percent, we will have a slow pipeline of new affordable housing units.

It does not mean that the District of Columbia should not continue to advance housing.

We will, and we are and and we need to continue to advance the production of housing um in all uh uh segments of the housing market.

But this is a special opportunity, and we want to test and see um you know how this works, and um so we believe it there's need for it at the middle income level, that there's projects that can close at the middle income level um and um you know, and we want to learn from it.

It will be uh a new program for the district.

Okay, thank you very much.

I'm gonna turn to Councilmember Joe, but I'm I'll probably come back to this because there actually is an active debate of where should we be focused in the in the development of affordable housing?

And there's a uh a significant group of people who feel like the emphasis needs to be at 30 percent or lower.

And then now you're talking about workforce.

It's an important discussion, so I'll come back to it.

But for now, uh Councilmember Nadeau.

Thank you so much, Chairman.

Hello, Deputy Mayor.

Um I want to walk through some questions with you about how we're ensuring timely delivery of projects in Ward One.

Um what drove you to pursue TIFF financing for Reefs and other projects?

I'm gonna invite Director Owens to answer questions uh that are real estate specific.

Okay.

Hello, council member.

Um so TIFF financing uh for the Reese project is necessary to deliver um so what we're doing is this is gonna be a phase project.

So with phase one, the request is no more than 32 million to deliver the NAACP, except for them to relocate their home offices here, another 50,000 square feet of space, 150 uh key hotel, 40,000 square feet of space for R and 360 parking spaces.

Um in the financing, uh the developer um once they you know sent back their numbers that was necessary to for us to offset some of the the needs uh with another district partner being there alongside the NAACP to use tax increment financing to be reimbursed at the at the end of the project after the money spent.

I'll also say this is a good candidate for tax increment financing because it's currently owned by the District of Columbia, not producing any taxes, and this first phase, as uh Director Owen stated, um, is really going to be commercial uses.

So there'll be commercial office as well as hotel, uh, which has some of the stronger um tax uh you know property taxes produced.

Any reason that what we hadn't considered a TIFF from the outset?

Uh we just have gotten to the point in the negotiations now where we can get that granular.

Okay.

Um and so then how many phases are we looking at?

So we're looking at two phases.

Okay, so phase two is essentially the residential?

Correct.

Okay.

And um what is the current proposed mix of the residential?

Uh 320 residential units along with 30,000 square feet of retail and 1700 square feet of open space.

And the breakdown in terms of 17,000, sorry.

Thank you.

And for the 320 residential, how are what are the income bans for that?

So I would have to get back to you with the unit mix.

I don't have that.

Okay.

I look forward to that.

Okay.

What's the expected groundbreaking timeline?

So right now we will be delivering an LDA come into council before recess.

So when you're when we talk about expecting groundbreaking, we're going to give them about uh three years uh to do their pre-development.

And so we're probably looking at probably in 2020, late 2028, early 29.

Is that three years?

Okay.

Maybe 30.

Thank you.

2930.

Yeah.

Got it.

It's a moving target.

Okay.

Um turning to Bruce Monroe and the new communities initiative.

What's the current capital budget allotment for the development of the Bruce Monroe site for the Parkview New Communities Initiative?

So right now.

Yeah.

So Bru well, let me just find it.

So right now, Bruce Monroe is budgeted at like 60.9 million.

There's an additional 33 million necessary for them to move the project forward.

I think as you know, they had a PUD in 2024, and it doesn't require them to have permits until 2031 per the PUD with the construction start of 2032.

That is the absolute latest.

They can still put shovels in and not lose the POD.

That is not when we hope they will put shuttles in okay.

Um so right now there is not enough funding to go to closing on this project.

Correct.

Under current market conditions.

Correct.

But right now there is funding.

Um we have advanced funding for them to do some pre-development alongside with the uh the drawings in accordance with the PUD finding.

That's in the FY27 budget?

Correct.

How much is that?

Um I'll have to look at their requests.

Uh I think they requested a little over 800,000 for that, but I can get back to you with the numbers.

And that's specifically for the Bruce Monroe site.

Correct.

Okay.

What is the plan to address the financing gap here?

I mean, the the developer, first of all, there's time on the PUD.

Uh they're still delivering Park Morton.

And um I think many developers are waiting for market conditions to improve and for property values to improve.

Um so financing right now is very high because our property values are low or lower than they've been, um, and also because of that economic vacancy that I mentioned, particularly in the affordable housing uh area.

So uh this developer is ready to go if uh and when conditions improve and they understand what the time frame is.

Uh but um you know, I think right now uh we would like to see uh the cost of construction come down or stabilize because $90 million for that project is very significant.

What is the expectation that construction costs are gonna come down or stabilize in the next five years?

Uh I don't know that anyone has a firm um expectation, but certainly there are factors that um can improve those conditions, and right now is just a particularly uh difficult time.

And so I I think we can't predict at this moment, and we've just got to be at the ready and plan everything, and when the developers ready to go, this will be a priority project.

So we just have to we have to wait and see and and um you know kind of hear when they're ready to go, but they're very aware of the time frame that they have.

Yeah, uh, and we've continued to maintain close to 61 million dollars in the budget for this project.

Um you've said both when they're ready to go and they are ready to go.

So it seems like they are ready to go.

Well, everything is about whether or not financing is adequate, and so they might be ready to construct, but for financing.

So right now they are not they do not have all of their financing in place if the district does not provide an additional 30 million dollars to this project.

So if we have the additional 33 million dollars, what other financing would they need?

Uh well, they would need to, you know, do the typical capital stack of LITEC and whatever other forms of private debt that they would bring to the table and equity.

Is the LITEC funding available?

There's adequate LITEC funding in our pipeline, yeah.

I mean, it this project has been in the works for like almost 20 years at this point.

So it feels like a real lack of urgency to find that money on our side.

I mean, we've known this amount for at least a couple of years now.

And the community has waited and waited.

And it's not like, you know, A, that we can actually wait on the amount of housing that's being delivered because we're talking about, you know, 300 some units plus a park plus other community amenities that this community has been waiting on.

So why isn't there more of a sense of urgency of identifying those funds as opposed to other capital projects?

I think there's plenty of sense of urgency, is just uh how much are we putting towards any one project?

And the developer is still developing, you know, other parts of you know, uh that of uh Park Morton.

So I I don't think that there's any lack of urgency.

It's just some projects take a tremendous amount of time because they require extraordinary resource, and this is one of them.

To be clear, this site was supposed to be built before Park Martin.

So conditions change.

And uh this project is one of them that has um, you know, uh had changes as a result of some of the complexities of this site.

Um is there a potential for phasing this project as well further?

I think we can talk to the developer about phasing, but from my awareness, they need all of the capital stack to start the project.

Okay.

Yeah.

Thank you, Chairman.

My time is almost up, so I don't want to start a new topic.

Okay.

Thank you very much.

Um just to go back to where we ended.

When there is, I feel like the Urban Institute did a report about the depth of the need for housing for 30 percent and AMI and under that there's really a shortage in that area.

And I'm not I'm with you actually on the need for workforce housing, but the the needs in both places are pretty acute, it seems to me.

If we're gonna put more weight in this space on uh workforce housing, how is it that we can make progress on the 30 percent AMI and below?

Because you hear this all the time.

You hear this about in the housing production trust fund, how few 30 percent below 30 percent AMI units are being produced.

How do we how do we walk and chew gum at the same time?

So um I just want to make sure that we're not um it's uh these choices are all and they're not either or.

It's very important to understand.

We want housing at a variety of different levels across the district.

30 percent of AMI right now we have a huge opportunity, particularly with the significant improvements uh in management that the housing authority is making in their portfolio.

Um their portfolio can build and deliver an additional 6,000 units.

And so when we think about providing for families earning 30 percent of A and I and below, we should really be uh working with the housing authority to unlock the development of their sites because they are the predominant provider of that level of housing.

Um the other thing is permanent supportive housing is another area that the district invests in that addresses uh that very lowest income band.

And so uh I think that I have been very heartened uh with the leadership of the housing authority and the changes that they've made as well as um you know the improvements to their portfolio and the development plan they put in place.

And I would encourage us to keep working with them to make sure that their land, uh, which is designed to provide more 30 percent affordable housing, um, you know, has ability to be developed and unlocked.

Last thing I'll say is um, you know, families who are at those income levels very often need uh wraparound services as well.

Not every family, of course, but many.

Um and so again, that's why the housing authority is such an important partner in delivering uh that level of um affordability for families.

All right.

Uh well, thank you for that, because uh it's gonna be a different day where we talk about permanent supportive housing and permanent supportive housing, our support for permanent supportive housing is not going up.

The the challenges are enormous, but it's not going up.

So it's interesting the point about the housing authority.

And I guess is your idea on the housing authority unlocking those sites by doing mixed-use mixed income development.

Mixed income development, yes.

And the 6,000 units that you anticipate potentially being unlocked over what period of time is that like all subject to financial availability and subsidy.

Okay.

So challenging.

All right.

Yeah.

And the housing authority is really the best to represent what the potential of their portfolio is and what it would cost to develop that out.

Okay.

During performance oversight, you testified that since housing in downtown or HID began, 13 office to residential conversions have been certified, with four of those certified in FY25.

In FY26 to date, how many applications have you gotten for HID and how many projects have been certified?

We have 18 applications with 13 projects being certified.

Is that is that 13 the 13 that I referenced that there have been 13 certified?

I'm asking just about in 2026.

How many applications have you gotten in FY26?

Um five additional.

Okay.

And how many of those have been certified or are they all still pending?

So they're in the process of being certified.

It represents about 600 more units.

Okay.

And how many applications and/or certifications do you anticipate in FY27?

Do you are people reaching out to you and saying that they are interested and then you have an expectation of applications in FY27?

So we're getting inquiries all the time about the program.

I think as more developers learn how to utilize the program, we're getting a lot more interest.

What we're still hearing from them is that it is difficult to secure capital investment because the investment market is still just a little bit skittish.

So I think as we see more developers utilizing the program, we'll get more interest.

Or we have been seeing more interest.

And when you say the capital markets have been skittish, skittish about this program or skittish, what what are you referencing?

We're hearing about that from a lot of our developers, not just this program, but across the board.

Okay.

The FIS for the for the subtitle indicates that the proposed changes to HID are not expected to significantly increase the numbers of projects seeking program approval.

What does this change about interior rooms qualifying as bedrooms?

What are we getting from these changes if it's not going to increase the usage of the program?

So I'll answer that.

Right now, if you recall, HID is designed to incentivize office to residential conversions and the layout or the floor plate of offices does not always permit for the most efficient use when converted to residential.

It allows the property owner to capture space or to configure an office floor plate so that it can maximize the number of units.

There's also demand for short-term rentals for kind of a variety of different uh types of housing units.

And so it just gives more flexibility for if there is a building that has a certain type of floor plate to maximize it.

Again, this is not an exact science.

This is what we've heard from developers who want to participate in the program and want to deliver as many housing units as possible.

And again, uh, you know, how you would design a residential building is different than how an office building is developed.

And so we want to introduce that flexibility.

Yeah, I guess I mean one of the things that you we've heard about this program different times is some buildings don't lend themselves to being residential, and in order to make them to make them be amenable to being residential, you might have to hollow out a courtyard.

And the idea is in order so that there can be windows on interior rooms.

This requirement does are there projects that couldn't be done without creating a courtyard and that this change maybe allows it to be done without creating a courtyard and so the financing changes and we make that decision with our eyes wide open that you know we would like bedrooms to have windows.

And so we conclude that we need to eliminate that requirement if we're going to successfully have more conversions downtown.

Yeah, so every building is different.

Some have big floor plates, some have little floor plates.

The bigger ones might be possible to introduce an atrium so that every single unit can have uh natural light.

But remember, even in an atrium, you're getting indirect light, right?

You're not getting typically getting direct light.

Um those are some buildings, but for smaller buildings or for oddly, you know, we have a lot of triangular parcels in the District of Columbia.

We have odd-shaped buildings.

And so uh again, um certain buildings uh owners have approached us and let us know that they could squeeze in or add another you know five, ten units uh if they um could still provide the natural light uh but without having the requirement to have um uh a full exterior window.

Um so it's it's really about it's not making a decision between now having a building with all windowless bedrooms.

That is not the case.

Most buildings have windows all around them.

This is really to be able to capture what would otherwise be vacant space or inefficient space and uh introduce, you know, a handful of units more.

Okay.

Um there's a table in the responses that shows how much of the abatements for housing downtown are left, and it's a lot that are left.

But when now we're having increasing numbers of certifications, if we got if the five that were in the pipeline now were to get certified, how close to using up this abatement would we be.

So I think um the what you're gonna see is it increases in years, because remember the abatement is allowed once the um requirements of the program are met.

So there uh you get the abatement when this is certificate of occupancy is issued.

So it's is going to change.

So right now, while it may be at a million next year, it'll be at nine million because we'll be delivering more buildings.

But I mean, you must project out you have 13 buildings that are certified, and if there's 18 that are certified at some point, there's a cap on the abatement in the out years.

Are we getting close to the cap on the abatement in the out years, or are we still have a lot of headroom?

So we we still have quite a bit um to utilize, uh, but we're probably over half subscribed.

Okay.

Thank you very much.

Uh we've been joined by council member Henderson.

Councilmember Henderson, I don't know if you want to do an opening statement or uh and you will have your opportunity for questions right after Councilmember Nadeau.

Councilmember Nado, are you ready for your second round?

Yes.

Thank you, Chairman.

Okay.

Um question about some transportation projects in your budget.

So there's about uh $40 million budget in Dempeds, 40 million dollars in Dem Ped's capital budget related to transportation projects downtown.

It includes 7th Street, South Gallery Square, Historic Green Triangle Roadways, Chinatown Alleyway, and the 800 block of Connecticut Avenue.

Why are these projects in Dempeds budget?

So uh we will it depends.

It can go either in DDOT's budget or it can go in Dem Peds.

For these particular projects, these came out directly from the Gallery Place Chinatown Task Force recommendations as things that would be catalytic for transforming particularly gallery place Chinatown into the entertainment uh district that we want it to be.

So what'll happen is Demped is uh designing uh and working with DDOT, DDOTs on our team, uh designing what the um improvements will be, and then uh we will MOU money over to DDOT once construction will begin.

That is not uh unusual.

We're doing that with Hill East, we're doing that with St.

Elizabeth's, you know, projects where uh we have uh a role in uh working with the property owners or you know, a new initiative uh that would require, you know, a change to how we're currently practicing, uh, or sometimes it's based on you know which agency is best positioned to lead it in the initial phases of design.

Okay.

So um is it being designed by DDOT or by you guys?

It's we are hiring and contracting the design consultant and the engineers, uh, but DDOT is on the district's team.

It's being led by Demped, project managed by Dem Ped with DDOT at the table with us, um, and the engineer is required to follow DDOT standards.

Okay.

The project description for gallery square says this project complements Capital One Arena and is scheduled to be completed the same year as Capital One Arena's F Street Construction, Summer 2027.

Can you explain the scope of the Gallery Square project?

Sure.

So we call it Gallery Square.

I don't know that it's known to many as that yet.

Um but there are if you look at what's called the Smithsonian Rentals Center, which is the American Art Museum and uh the portrait gallery, that building, um, you know, it uh it has a special place in the history of uh Washington, DC as kind of the the heart of Washington.

And so uh where the holiday market currently sets up, the downtown holiday market every year on F Street.

Um there's unusually wide sidewalks in front of the Rental Center, um, and then there's the street bed.

And uh with the improvements that have been made to Capital One Arena, uh there is an opportunity to create what we're calling a festival street.

Uh that has been envisioned by OP for several years now.

It's part of the downtown action plan.

So it would make F Street in between 7th and 9th streets curbless.

And it would still accommodate cars, uh, but uh when we want to shut down that street for special festivals for the downtown holiday market, and hopefully for many other gatherings, it will be much easier to do uh because there is no curb.

Okay.

Um is that in the final stages of um design?

Uh no, we are just getting a contract underway.

Um we will have to catch up and if we're gonna hit the FY27 construction season.

Uh so we may lag a little bit, um, but our goal is to try and approximate that as as as much as possible because we'd love to deliver not only um you know the newly renovated Capital One arena, but also have that exterior uh improvement be made, you know, concurrently.

Um we were told when the street argued platforms were removed from 18th Street and Adams Morgan that they were going to be relocated to Gallery Place.

Is that still the plan?

Uh well, we're relooking that right now because um when we look at 7th Street in between Pennsylvania Avenue up to F, really where all the restaurants are.

Um the National Capital Planning Commission is currently working on something called the Pennsylvania Avenue Initiative.

And we have put some of that on hold uh so that we can coordinate and make sure that we aren't doing anything to 7th Street that will you know fundamentally change or no longer be in line with this much bigger vision for Pennsylvania Avenue.

Remember that the whole idea behind this is to pull visitors off the mall and up into the city.

Um and so the streeteries that were uh located on 18th Street.

Um I need to see what our plan is because we were initially intending on moving them to 7th Street and to pilot uh whether or not that reduction in width of 7th Street was workable or not.

I I think that we may be putting that on pause for a moment, uh, just not to disrupt um, you know, both flow of traffic as well as you know, kind of the activities down there for this year.

So, any idea what we're gonna be doing with those platforms that we spent close to a million dollars on?

Could they be used in other neighborhoods?

Potentially, and we'd be open to talking uh with you and others about that because I do think that those are great platforms.

They were uh well conceived and the notion of supporting our businesses during this time, particularly during the summer months uh when people like to eat outside.

Um we should definitely uh we'd love to collaborate with you on that.

Thank you.

Um do you have data on how the rental act has impacted rental arrears?

Uh well, rental arrears um have grown and not um reduced, right?

They're not being paid back.

Uh what we have seen is that rental collections going forward since the rental act has been put in place have been improving.

Um and so it's slow but it's steady.

Um and I uh am uh you know hoping uh that with some additional changes that it will take us anywhere between two to four years uh to get back to a five percent vacancy.

How are you tracking that progress?

Uh it's usually uh well, there's a couple different ways to do it.

Cone Resnick as well as um the housing finance agency and others who are responsible for tracking uh you know rent collections and the health of the affordable housing portfolio, uh they produce an annual report, and so we'll look at that.

We also hear anecdotally, of course.

Do you have all the data you need from housing providers to actually track the impact of legislative changes?

Um, we're using, I mean, uh I personally uh use uh Cone Resnick's annual report because they're an auditing firm and um it's also complete.

Um so rather than asking individual providers, uh, we're able to get you know all of the providers that participate in the LITEC market.

So it's not all providers, for example, who don't use LITEC.

It's specific to LITEC, but LITEX obviously where the district invests a lot, and so it's a good indicator.

There's been a lot of reaction to the draft future land use map put out by the Office of Planning.

What do you say to those who've expressed that it doesn't go far enough with housing production?

Um well, uh I think a couple different things.

Uh OP uh has done a significant amount of work uh on what population growth estimates between now and 2050 will be.

They're estimating that the district's population, uh, if it followed, and then they had different assumptions for aggressive growth and slow growth of population.

Um, but they have settled on 850,000 residents in Washington, D.C.

Now, we can aim to have more through different programs and incentives, but right now, without a massive change in our policy to incentivize more residents, we are uh I I believe that their projections are correct and reasonable.

So 850,000 uh residents total, that's 150,000 more than today.

Um if you back into how many units is needed to support that amount of growth, I mean round numbers, you're talking about 100,000 units.

I'm doing this off the top of my head, by the way.

So when you look at how we accommodate uh a hundred thousand new units in the district in the next 25 years, uh you can add up all of the projects that we currently have in the pipeline.

You can add up what's coming online with RFK, what's potentially coming online with downtown, and now we have a whole new neighborhood that is southwest DC.

We also have opportunity to keep building along our major commercial corridors because that's where there is already, you know, in the last future land use map proposal and adoption uh more density that can be built along our commercial corridors where there's buses and around transit oriented development.

So I do not believe that it is realistic to think that we can build all of that out that is currently in the plan.

Um I think that that will be more supply than what our population projection uh anticipates.

Um it's always a balancing act when you think about growth of a city, and you want growth to be done strategically.

Uh and right now our strategies are to continue to infill to maximize um the use of our commercial corridors and transit-oriented development, and to re-inhabit uh downtown southwest DC and uh the two remaining developments along the Anacostia, Poplar Point and RFK.

I'm over time, but can I just ask about one of the assumptions for the future land use map?

Um does that assume we currently have enough housing for the people living here?

Right now, and this is anecdotal that I've heard I have not seen uh numbers, but that there is, and by the way, this is by count, this is not by quality.

Um, that right now there is a balance between the number of units available uh and the current population that we have.

I want to be clear.

That does not mean that the units that we have are all, I mean, many of them need to be reinvested in so that they are at, you know, uh, you know, that they haven't been invested in since like 1970, right?

Like we need to uh preserve and rehabilitate a fair number of units.

But in terms of count, we're about balanced at this moment, as I understand it, because our population growth is slower than it has been, and our production has been greater than it has been historically.

Thank you.

Thank you, Mr.

Chairman.

Um Thank you, Councilmember Nadeau.

We've been joined by Councilmember Tran White and Councilmember White.

Um you'll have the opportunity to do an opening statement in your first round after uh Councilmember Henderson.

I'll turn it to you, Councilmember Henderson.

Uh thank you.

Um Chairman Um and good afternoon, Deputy Mayor.

Um sorry for earlier.

I was in the wrong room.

I was looking for city administrator who is upstairs.

Nonetheless, I'm here.

Um I want to ask um about um the supermarket tax incentive BSA subtitle.

Um so you know, obviously, you know, we've dealt with the challenge for years in terms of attracting supermarkets equitably throughout the district.

Um for the first time in a while, you all are proposing to make a change to that particular legislation.

What's the impetus for it and why do you believe that this particular subtitle um would work better for attracting um and retaining retail?

Well, grocery store rather than retail.

Um I think the the primary impetus um, if I'm gonna be honest, is because there are a number of um grocery stores that are now at the end of their lease term and they are making decisions about whether or not to stay and renew.

And we would like to encourage them to renew, uh especially those that are um facing financial hardship, which some of our grocers are.

Um so they are making decisions about whether or not to close or whether or not uh to stay.

And um the current program as designed is a one-time only 10-year tax abatement for the grocers, and there is no renewal option.

So that was the preliminary reason for thinking about if we were to renew or give an option to renew, what would that look like?

How long should it be?

Uh five years uh for a renewal is pretty typical uh for a major grocer, and so that's how we came up with the term.

Uh we also wanted to make sure that the tax incentive went to stores that needed it most, and that's why we put the conditions uh that we identified.

Uh financial hardship that they've already made an investment uh in the store themselves, you know, that they haven't let the store deteriorate over time.

Um and then as we thought about um, you know, this five-year period um and also the opportunity to renew that we could uh introduce more flexibility for uh projects that uh might not need the full 10 years.

Yep.

Um and so that's how we came up with it.

And we think it adds flexibility what we've proposed, and then most importantly, that it gives that extension option if it's required.

Okay.

I the I I hear you in sort of the desires, my concern, which I think is also shared by some folks in the community, of that we would offer an extension to a store that really has not done any investment simply because it is the only one that exists, if that makes sense.

And I I'm talking of one particular store in my head, which you probably know what I'm talking about in Ward 7.

And so from the community perspective, they have been asking for investments from the company, um, which frankly, investments from the company in the store might encourage more residents to actually choose it as an option for their shopping.

But I don't want to provide a tax incentive for us to continue poor behavior simply because you're the only one that exists.

It's those types of monopolistic relationships that I don't think actually benefits residents very well.

I think when you offer an incentive, um it's an invitation uh to the company to come back to the table.

Okay.

It's an opportunity to have a real conversation about how best to serve that community.

Um, and there's nothing that requires us uh to offer an incentive.

And so uh it is um a conversation starter uh and we've started to have those conversations.

Okay.

One of the other things under this is that um some stores like Aldi or LEDL are not eligible because the companies don't accept WIC or SNAP.

Um, my understanding is that DIMPED may have extended this in but this incentive to one of those companies, regardless of the fact that they don't meet all the requirements.

What happened there?

Uh I will need to get back to you.

Let me see if I can get you an answer real quick.

Okay.

Um I I wasn't aware that there was an exemption program in terms of all the various benefit pieces, but perhaps you all have developed some particular agreement.

I just want to understand it further.

Um I'm not familiar with I mean, uh, I'm not familiar with the case that that um you might be referencing.

Okay.

Um what's the status on Capital Gateway?

So uh Capitol Gateway is in sort of a status that it's been in for a while, which is that we're still subject to a lawsuit and trying to resolve that very I mean I am personally uh trying to get that decided um so that we can move on.

Uh Demped continues to recruit business uh to recruit at ICSE as well as through a variety of conversations that we have with retailers, the economic partnership is constantly uh reaching out to retailers about uh Capitol Gateway.

Right now, there's two pads uh at Capitol Gateway.

Uh let's say the lawsuit were lifted.

Uh the current design is for one pad to be a mixed-use development, the other pad is to be a big box store.

Um and so the conversations that we've had, we just have not been able to close uh at the end of the butt what we are doing right now is actually uh what I call uh sort of restudying the two sites to see if a smaller store, because that's what we're seeing the trend in grocery being anywhere between 25 to 50,000 square feet as opposed to 100,000 square feet um with mixed-use development on top so that there's more head count.

Um that is what we're looking to see so that we can have a different conversation with grocery stores that might be interested in that site, and that work Latrina's team uh director Owens team is um is working on uh actively is to to see what a different mix of uses at that site could render.

Um also uh Mr.

Stutz has an answer about the Aldi.

Okay.

Good afternoon, Councilmember.

So just to clarify, uh there was an applicant um who applied for the credit.

Um they did meet the statutory requirement because they do accept SNAP.

They do not um they applied for WIC, but was not approved.

However, meeting the SNAP is allowable under the uh requirements currently.

Okay.

Um sort of in general, sort of on the food access piece, there was a time not that long ago that you know DIMPED had several grants around food access, and I don't necessarily see that as a priority of your office any further uh priority shift and yet priority, the need still exists.

Um have we evaluated the past strategy?

I know that there were a number of investments that were made in businesses that weren't successful in terms of lasting beyond you know one to two years.

There were some struggles.

Um good food markets comes to mind, a couple of other locations.

Um I feel like we could have refined it as opposed to just simply um pulling all the money.

Well, uh so let me just uh say there were two programs uh that DEMPED was able to fund as a result of federal funding, the Food Access Fund and also Nourish DC.

While that federal funding has now coming, it's expiring now.

We don't have it anymore.

We've spent it all, and as a result, we've you know incentivized and created a number of new businesses.

So in our budget going forward, we have three uh sorry, six point five million dollars.

We have learned a lot from the food access fund.

And uh the 6.5 million uh that we are proposing for FY27 uh does not prohibit us at all from investing in uh food access, meaning restaurants, other kinds of uh uh food-related retailers.

And so uh we see that as a continued area of investment.

Um and there's nothing in our Great Streets program or in our other programs that would prohibit us from you know carving out or specifying that uh we're looking to encourage um restaurants and other food providers.

Um the last thing that I'll say is it is no secret to anybody, I don't think that we are going through a time where our restaurants and retailers uh have really taken a hit over the past year.

And so uh in FY27 uh three plus million dollars of that 6.5 is specifically to help stabilize small businesses that are retailers and restaurants.

Okay.

Um I will just say it is sort of like in togetherness a trend.

We were talking about it for a long time, then we weren't talking about it at all.

Add that combined with the proposed entire elimination of the Office of Food Policy out of this budget.

I it I'm getting a narrative.

Um I want to just ask really quickly about um the uh grants that are sort of moving in between the Greater Washington Hispanic Chamber of Commerce and then also the DC Black Chamber of Commerce.

There seems to be some movement amongst those two.

I want to give you an opportunity to clarify for the record what's going on.

So there's not a different type of narrative.

So the District of Columbia supports a couple different chambers historically.

The DC chamber, the his the Greater Washington Hispanic Chamber, and then once the Greater Washington Black Chamber was created, the Black Chamber.

In last year's budget, I believe that there was a mistake and oversight of uh of not providing grant funds for the Greater Washington Hispanic Chamber of Commerce.

So we had zero dollars in FY25.

Um and the and DemPed is looking to rectify that.

Um so we've normally Dem Ped itself, but there's other agencies that have provided some funding to these chambers as well.

Um, you know, has historically provided grants about 100 to 125,000 per year.

Last year, again, unusually, the Greater uh Washington Black Chamber got a 400,000 dollar grant, uh, which is much higher than has been in the past.

So we're just looking to uh go back to historic levels, keep it um you know uh more evenly distributed rather than favoring one over another.

Thank you.

Thank you very much, Councilmember Henderson.

We we have been joined by Council Board 7, Councilmember Felder, Councilmember Felder, uh Councilmember Train on White is online, and we'll give through the next round and then we'll turn to you.

So councilmember Tran White, when you're ready to go.

Yeah, but I'm ready.

Uh good afternoon, everyone.

Thanks for joining us.

Uh Deputy Mayor Albert, uh, it is of the city's belief that we're going to be facing some economic hardships coming up that may affect uh some of the projects uh around the city.

I have a few questions because I'm concerned about where we are in Ward Eight.

Um, you know, historically, uh residents in War 8 feel forgotten about.

The mayor has made some significant investments in Ward 8, the Imped, uh other government agencies, the council, um, but we've still been facing some trouble as relates to some of our businesses, for example.

Uh in the last decade, we lost uh just a name a few.

And I just heard Councilman Henderson mention a good food market, but also Kitchen Savages, uh Starbucks, Right Aid, Walgreens, Yingin Town, uh, and San Lot and Acastia, Cheers, uh some of the businesses that we uh invested in, some of these we invested government funded in, but still failed.

Um, so I'm concerned about where we are in the future.

I want to turn real quick to some of the areas that have a heavy focus uh from our meeting with you, the mayor and her team, like the St.

Elizabeth East East Campus that has I believe four different uh projects with seven parcels that are in line for development.

I think about Popula Point, and I think about Burray Farm.

So my first question is uh as we think about all of that, uh, can you provide a clear update on administration's timeline for advancing the popular point redevelopment, including the status of negotiations with the proposal from Therma Group and any barriers that you foresee?

Hello, Councilmember.

Um right now we are um continuing to advance the the EA and the NEPA for Popula Point, which is required um to be completed and submitted to the federal government uh for approval before we can post.

Additionally, we are working on a master plan for the site.

Um so we are advancing that as far as Therma, we are um advancing a term sheet with Therma um for our commitment to have them on the site that will be uh submitted to council after recess.

So it will be coming to council in September.

Thank you.

I appreciate that.

Uh Ms.

Owens.

Uh the mayor's budget proposed an additional 28 million and capital funding for popular point.

And there also has been some talks about negotiate with the federal government with the due of the um the police, the the POC police station, the helipad.

Is there an update on that at all yet?

So right now we are um still working on the land swap uh to be able to accommodate the MPS facility.

But I think as yeah, you probably know as a result of getting Popular Point, the district would have to put monies toward the design of a new MPS facility, and the money that you're seeing in that budget will help us to come uh complete the master plan process, the EA process, but also start with the design work as well.

So this is 28 million.

How much more did you all estimate is needed to suffice that's land swap?

Um so it's the 28 mil is not for the land swap, it's for the design, is for relocation.

You know, all of the infrastructure will have to be put at popular point.

So but right now for the master planning piece, um for we're not doing um the the land swap is not a money deal, it's a land land deal that's not gonna require money, but it's to look at the infrastructure, the master plan, the environmental cleanup that's necessary, so the money encompasses that all of those things.

Okay.

Um has there been ongoing conversation with the federal government?

Is there anything because you know we've had uh a fickle relationship with the federal government?

Any particular barriers to that that you can foresee?

Uh no barriers.

We have a great working relationship with the National Park Service.

Um we meet with them weekly, so I don't foresee any barriers with working with them or with moving this project forward.

All right.

Now we've moved uh a 400 plus residents out of Bury Farm with the promise of bringing them back to Bray Farm.

We finished the uh the first building working on the second building.

Um I know there's some potential uh partnership for home ownership with POA.

Uh can you give us an update on how how well we think we're gonna be able to finance that to get the residents back and also to help those residents transition from not just uh being in housing but being homeowners using their vouchers?

Uh so the voucher portion is a DC housing authority portion, but we have seen uh vouchers being converted to homeownership at district towns at St.

Elizabeth's East.

So we know it is something that is possible.

We have a couple of homeowners that have done that.

Um right now, the Barrie Farms Project, the budget that you're seeing in front of you, it's a fully funded project to um for the infrastructure but also the construction.

So right now we have the Edmondson under construction, what is which is due to be completed by the end of the year, and then followed by that they broke ground in January to start work um on Hillsdale's flats phase one.

And as you know, the infrastructure with the streets are are is ongoing, it's ongoing as well as they construct a street, they build a building, and then the streets are turned over um to D DOT at that time.

Um I remember at least about two years ago there was some type of bad gas leak down there.

Did that hinder us from any timelines restrictions in Bray Farm and moving that project along?

Um I'm sorry, I'm not aware of a gas leak, but I can check on that.

Okay, if you can send it to the office, that'll be helpful.

Sorry, council member, I also want to stipulate that we have adequate funding for uh Barrie Farm uh to complete uh the future of their work.

The future of the whole project?

Yes, you see it I would love to see that.

Yeah, and so FY thirty.

How much is how much is that?

Because the infrastructure was about a hundred million by itself.

So the total for Barrie Farms is like ninety-eight point nine.

We did increase it by eight point six million to encompass the work for the infrastructure.

Okay.

What about the construction?

That's inclusive of construction.

Okay.

Now we have at St.

Elizabeth's East, we have uh parcel 789 that's combined for development project, Parcel 13 that's designed for project and parcel 15.

And I think there are a few others.

Uh where are we in regards to those projects?

So for parcel six, seven, eight, nine, and thirteen, they are with the council.

So parcel six, seven, eight, and nine, we're waiting for hearings.

And for parcel thirteen, I think we're waiting um to get it on the agenda for a vote.

What about 15 to 18?

So it's uh so 15 is the uh where you have Sycamore and Oak.

So are you asking about the permanent project?

Yeah, because that's a temporary structure, unfortunately.

I I wish it wasn't, because it's it's uh area where you know we have 13 thriving businesses, potentially 21 um black owned minority community-based businesses that are there.

Uh, but it will in their meeting, it was expressed that all these businesses that are there won't be going to the new construction, which is promised to the community on this when we design the project.

Uh, and that concerns me greatly, as you you know, um, but it's our desire to make sure we help put the tools that these businesses need to thrive in our community.

Um, and I don't uh you know, we gave away these parts of land for a dollar.

Um now we're telling the local businesses that we are unsure if you want to go and that's not sitting well with me.

So I'm just trying to figure out what's the investment into those businesses and uh uh where because 15 is projected to be torn down, but we don't know where and what.

So right now um the buildings can't be torn down, which are buildings that you're referencing are 115 and 116.

They cannot be raised until a final um plan is approved.

So right now that the final design plan has to be approved by historic before any buildings can be raised.

And I just want to address um the education and stuff that you're saying that the buildings need if they're not, I mean the uh businesses need if they're not at this location.

Um in the disposition agreement, we did specify that the buildings uh that the business owners would need to be trained, and they would know to be able to know how to run their business, whether they're online or in a brick and mortar rest uh a brick and mortar facility, um, whether they're at Sycamore Oak or they go somewhere else.

And they have honored that, so I think you know that's why they go to the big show in Vegas.

That's why they've been out to LA to visit some of the other business owners and places that are similar to um to where they are at St.

Elizabeth's East.

So they are making the investments so that these so that these businesses can thrive even if they are not as Sycamore and Oak.

As far as parcel 18, parcel 18 is at the Congress Heights Metro, and that is where the DC public library at Congress Heights will be on that surface parking lot.

We are just finishing um our legal documents with Wamata, and we're looking forward to doing a groundbreaking this summer.

Uh thank you.

I'm over my time, so I'll digress back to Chairman Freeman.

Uh thank you, Councilmember White.

Uh Councilmember Felder.

Uh thank you, Chairman Fieldman.

And uh first and foremost, Deputy Nair is good to see you and members of your senior leadership team.

Uh I do appreciate the investments that Demped was able to uh put in Ward 7 when you look at investments around Hill East, RFK, uh Northeast Heights, Dingwood, uh Fletcher Johnson.

Uh so I'm very excited about that.

Now do have a couple questions that I I want to uh get some answers on.

I wasn't uh able to see any investments in Capital Gateway.

I know last year that was a big priority of mine.

Uh could you speak to where, if any conversations are being had about the redevelopment of Capital Gateway?

Yeah, so we currently have in our capital budget still about $30 million for Capital Gateway.

Um so that money has not moved.

Uh we still use uh that funding uh as an inducement or enticement in our conversations with prospective retailers about that site.

Um so right now, as you know, we've uh been working, we continue to work.

I you know, last year we must have spoken with three new retailers that we've never had conversations with before about that site, but at the end of the day, they have not been willing to pull the trigger and and have not made a commitment.

So right now, uh Director Owens and her team is looking at uh a plan for those two parcels to see if we should introduce a smaller footprint of a grocery store because that's what we're seeing trends in and adding more housing so that uh we're replacing what is currently planned for one big box store, um, but instead replacing it with maybe a 25 or 50,000 square foot grocer, maybe some other retail, and then housing above, and hoping that that added density uh might also become more attractive to what the trend in grocery and retail is today.

Could you speak to any specific sites that you guys are looking at in Ward 7?

Specific for growth for grocery stores.

Well, we continue to market Capital Gateway.

Um also uh the developers of Parkside have been interested in introducing a grocery store.

And so, you know, when developers approach us saying that they want to build grocery, we're very quickly uh at the table and trying to make that happen.

Again, um the conversations that we've had have not led yet to a commitment, but these are long-term conversations, you got to keep having them.

And then uh, you know, Northeast Heights is another development that promises um a smaller format grocer.

And so we're working with that developer as well to make sure that that, you know, that we can fill that space as well.

Now, Deputy Mayor, if you look at your FY2026 budget compared to your FY 2027 proposed budget, there's a 21.1% decrease in your funds.

Could you speak to how that deficit will impact the work of DIMPE?

Well, um there are two primary reasons that there is such a big drop.

Uh first is that there are federal grants that will have expired in 27.

So we had a big infusion of money post-COVID, and we've been spending that money.

And FY26 is the last year that that money is available.

So you'll see that drop.

And then the second is uh last year in 26 when the mayor proposed her budget, it was very much in line with what our proposal for 27 is.

Um but there were um about nine and a half million dollars worth of council uh one-time uh enhancements to Demped's budget.

Um for example, uh there was a uh uh a three million dollar grant um for uh a project, Rosemont.

Um there was uh for Capitol Hill, you know, a one-time 150,000 dollar grant to support businesses while there's construction.

So there were these one-time enhancements and uh they've they they are being executed on, but we're going uh but we are proposing once again just uh the budget that we proposed, similar to last year, and that is very consistent with what we had proposed prior to all the federal funds.

Okay.

Now, uh the mayor title this year's budget grow DC.

Now, obviously, DIMPA epitomizes growth DC.

Could you talk about some of your major investments?

It could be specifically in Ward 7 or across the city that really helps achieve that goal.

Well, I that question I'm very appreciative for.

Um, you know, DemPed does uh two primary activities.

Uh the first is real estate development, those development projects are a combination of infill development as well as major campuses that deliver you know much more uh significant mixed-use development opportunities.

Um, and within those bigger uh projects, um, that is really unlocking new parts of neighborhoods.

Um, and so uh that is mainly impacting our capital budget, and this year we have close to a 300 million dollar capital budget.

Um, and we've also uh proposed um a couple TIFFs as well as investments, um, straight up capital investments.

Uh the second uh area of investment that helps the district grow is our business development function.

We have uh three major proposals for business development this year.

One is that we will maintain um the Great Streets grants and other local business grants at the six and a half million dollar level.

But there's two other investments that um are really important as we look to diversify our economy.

Uh the first is close to $7 million for the Vitality Fund and also uh the technology ecosystem fund.

We need to add energy and continue to be at the table when we're talking to businesses about locating in the district because we need to replace those federal jobs with new economy jobs.

Uh the other uh investment that we're looking for is to have dedicated funding for the economic partnership.

Um, the economic partnership, um, just destination DC does tourism marketing so that we fill our convention center and have really uh active tourism industry, uh fill those hotels, get people out eating at restaurants.

The economic partnerships function is to attract new business.

And so as we're looking to diversify the economy, we need a dedicated uh form of funding for the economic partnership.

Those are the three buckets that I'll say um uh, you know, are in our business development economic partnership, vitality and tech ecosystem fund, and then last but not least are local business development funds.

Thank you.

And then Deputy Mayor, as you know, there's been a number of businesses who have either left the district and or some have just shut down, for example, Duffies and Haleys has closed this uh his doors.

Could you speak to what in your budget, if anything, help support small and local businesses uh in areas that have been historically overlooked and underserved?

Well, uh, I think all of our businesses are um being impacted by reduced consumer confidence and consumer spending.

Our retailers and our restaurants are hit the hardest when it comes to consumer spending.

So as demand for you know uh eating out uh drops, then their revenue drops.

The other thing that we have going on right now, and that has been a topic of significant debate is costs going up.

And so not only are the costs of goods going up for restaurants and retailers, but so is the cost of labor.

And so we had a big discussion last year about uh pausing and delaying the implementation of the increased uh wage rate, um, which impacts, I mean, labor is a major part of costs for uh restaurants and retailers.

So you can't have revenues going down and costs going up and expect a business to stay in business.

Um we are asking the council to um stand with us and uh make sure that we manage um the costs and the cost impact to businesses, particularly our small businesses as much as possible by not adding uh additional um expense to them.

Um and then in terms of helping them, uh, because we have had unusual hits this year that are beyond our control, uh we are um uh proposing for FY27 a stabilization uh fund uh again to help we saw that during COVID uh businesses just needed a little bit of help and they needed some technical support so that they could restructure their financing or whatever.

Um and we learned a lot from uh that experience.

And so we're looking at doing a locally funded uh restaurant retail small business stabilization fund.

Now, Devin Mayor, we talked about uh some of the things that help grow DC.

Uh what would you say are some of your top three budgetary challenges uh that isn't reflected in your budget?

Um well, right now uh everybody wants projects to move forward.

Every single council member is asked about a project in their ward.

Um and we've got two things going on uh in the capital markets that are causing budgetary pressures on the district.

First is that capital is not flowing as readily.

Um particularly in our residential projects.

There is a lot of uh concern from the capital markets uh about investing in residential projects right now.

So without that, uh the demands um on subsidization from the city are going up in order to keep projects going.

Um I would say right now, as you know the I believe that we have sort of hit the bottom, if you will, and that we're stabilizing.

Um, but the question is, how do you help businesses then come back?

And so um that's what the stabilization fund is for is to make sure that we preserve uh the businesses that are here already, invest in our existing local businesses, and that is putting budgetary pressure on us.

And then last, in order to grow, we need to uh and to grow quickly so that we can replace those lost jobs.

Uh we need to invest in marketing, business attraction, and in incentives.

So all three of those pieces uh put budgetary pressure uh on our ability to grow more fat more quickly.

Thank you, Deputy Mayor, Mr.

Chairman.

Thank you very much, Councilmember Felder.

Um during performance oversight, go back a little on the grocery stores.

Uh you testified that key challenges to attracting full service grocers in high need areas are available land, appropriately sized retail spaces, uh, population and income diversity.

How do the proposed changes in the supermarket incentive program address those things, or what kinds of things can we do to address those things?

Well, the supermarket tax credit um is uh not designed to address those three specific things.

It is intended to be uh a conversation starter with a grocer and um additive to uh their bottom line so that any risk that they might perceive uh from being in a high needs area is um you know mitigated.

Uh and so that's what I I think that the supermarket tax credit is a way to have a conversation, introduce them to the area and what the opportunity is and hopefully induce them to come.

Despite the other hurdles.

Yeah, I mean, a lot of times, you know, this is kind of a silly thing, but um, you know, other jurisdictions uh have incentives, and um when especially national businesses are looking at locating to the district, they'll just ask out of the out of the gate, oh, what incentives does the district have?

So you have to have something to respond to that to even begin the conversation.

Um the district has historically been very supportive of recruiting businesses.

We usually do it on a one-off customized basis.

Uh but it's important in this day and age to package it so you have something off the shelf and that you can bring somebody to the table and not be starting from behind.

And that's what the incentives do.

Okay, I hear you.

Um I think you referred to this generally, but how how many of the supermarkets in the geographic areas covered by the abatement would you estimate are operating today at a substantial loss or and are at risk of closing?

Uh I don't have that data.

I mean, I would need to pull the um businesses.

I mean, we certainly have heard from a handful of um grocery stores and retailers that uh they are either subsidizing uh that store, you know, or at risk of closure.

And then what are what other tools do you have to help them in that setting?

I mean, I suppose the five-year extension is one of them, but what are what are the tools that you feel like you have?

Trevor Burrus, Jr.

In certain parts of the city, um the predominant um impact on the store is theft.

And so the work that the council did last year on retail theft was incredibly important.

Um we need to continue to make sure to work with MPD and all of DMPSJ and they've been a fantastic partner coming to the table when our retailers uh are stating that they are losing product and inventory to theft, um, which again reduces revenue.

It also leaves the consumer dissatisfied because they don't have full access or easy access to the goods that they're looking to buy.

Um so we got to keep working on that.

Okay, hear you.

The FIST for the site title anticipates that it will reduce revenue by 640,000 in FY27 and roughly 6.6 million over the financial plan.

What are those cost projections based on?

Are there specific supermarkets that you anticipate will apply and qualify for abatements?

How do you come up with the projection of the amount of abatement that will be used and therefore not a lot of people?

I will need to get back with you and give you details.

I think it is a I think it is a combination of sites that we continue to market as well as the CFO's uh trend analysis of number of store openings over there historically.

Okay.

So let's do circle back on that.

Restaurants and retail stores are eligible under the supermarket tax incentive.

I think that you've said that a couple of times, is that right?

That's not true.

It's only for grocery stores.

Or people selling Okay, sorry, I apologize.

Uh for the record, we do have the authority to use the tax uh abatement for restaurants, but we have not historically done that.

And so you that you haven't done it before, but has it always been in the authority or has it been added to the authority?

Always been in the authority.

And at this point, I think that you talked about the challenges that restaurants are facing and retail.

Are you contemplating using the authority going forward, or is it just a historic remnant that it's included in that?

Uh it's a historic remnant.

I mean, we could consider it, but we had not anticipated using it.

Okay, let's uh want to go back to office to anything for a short while.

Let me see.

Um is it is it still correct that there have only been two or three projects that have projects that have expressed interest in office to anything?

Uh that's correct.

And to what what about the changes that you're proposing to office anything would encourage greater usage of it?

What why should we think it the uptake on this has been not much?

And I get it why we would want to do it, but what what makes you think that the future is going to be brighter for this program?

So we've gotten feedback, direct feedback from the market.

Those two applications that you referenced, uh or three, um, were you know were working it.

They they wanted to do it.

Um at the end of the day, um, they had tenants that they were building the project for.

So here are, you know, real tenants, real employers uh that were ready to fill these buildings, um, but there was significant uh confusion by the prospective tenant about how first source and CBE applied to them as a tenant versus the developer.

And so um at the end of the day, uh the tenant said that they did not want to move forward because they were not clear on what their obligation was.

And so that is uh one of the proposals that we're uh making is to clarify how first source and um CBE applies to the tenant improvements and to the tenant hiring.

And let me just give an example.

Uh when you have like we have uh a company uh that is moving wholesale from New York City to Washington, D.C.

They employ about a hundred people.

When there is a first source agreement that says you know that you will attempt to hire 51 percent of your uh new employees.

Now these are new employees to the District of Columbia, um will be district uh residents, and that employer has a hundred people that they are relocating.

They already have employees.

That becomes an area of confusion.

Um obviously there is an exception that they can work through with uh DOES to kind of carve things out appropriately.

But most tenants that are coming uh to the district, you know, that that's this is their first introduction to business in the District of Columbia is a negotiation with multiple parties.

And so um uh, you know, in in these cases, uh it was just too confusing.

Uh and for CBE to apply to the tenant improvements, um, that was also confusing for the tenant who uh in one of the cases was going to fund those improvements themselves.

So they were putting up the cost of construction versus the developer that was doing the base building.

So all of those things, we want to remove that friction.

It's more important for the district to bring people to create new jobs, and more jobs will be beguette for uh DC residents and contractors once a business is in place.

Can I just add also, um, council member that we did relaunch this program in March of this year?

And as at March Madness, and as the deputy mayor said, um, we've heard you know real-time feedback from the community, and that people are really interested.

And this is a pilot, and what we're looking for is refinement in this legislation that we're putting forward so that more people would be eligible and interested in the program.

There's oh sorry, there's one other change that I think is important for people, um, which is that we've expanded the eligibility to be from any commercial use to another commercial use.

So if you recall it was office to anything, um but the Hotel Harrington as an example is a hotel.

And um it needs um some uh financial support in order to be able to redevelop.

Um and uh so we've broadened the eligibility to be any commercial use to any new commercial use.

Anything to anything?

Except residential, except residential.

Yeah, you had me puzzled what you succeeded in uh in filibustering for long enough that I didn't get to another question.

Filibustering sounds bad, but uh let me I didn't mean to do that.

Uh let me turn to uh councilmember Tranline.

Is that Felder?

Oh, I'm sorry, Councilmember Felder's next.

Uh thank you, Mr.

Chairman.

Uh picking up uh Deputy Mayor, where we left off.

Um you talked broadly about some of the uh large-scale development projects happening across Ward Seven.

Uh could you speak to specific uh budget items that help corridors, commercial corridors?

Oftentimes you hear about these major development projects.

However, when we look at some of our uh emerging corridors, sometimes they need a uh a financial push.

Could you speak to how your budget priorities reflect support to helping commercial corridors?

Well, great streets uh right now is our primary way of supporting uh commercial development around corridors.

Um but for corridors to be uh successful, you kind of need bookends.

You need anchors along the way.

Um so um I'll give the example of Northeast Heights, which you know well.

You know, adding uh density at Northeast Heights right on Minnesota Avenue, right on Benning Road, uh will help the development along both of those corridors.

Um what are other examples?

Uh uh Bryant Street on Rhode Island Avenue, uh right across from the Rhode Island Avenue Metro, being able to add more density there in combination with uh the plan that Office of Planning uh did for the revitalization and kind of a visioning um project for Rhode Island uh and in combination with uh councilmember Parker's adding, I think uh 250,000 in FY26 uh to so to you know focused on uh small businesses at Rhode Island Avenue, all those things contribute to development along our major re our major corridors.

Uh speaking of uh great the Great Streets Fund, as you know, there's uh several commercial corridors in Ward South and whether it is Pennsylvania Avenue, Minnesota Avenue, Bennaroe, Danewood.

Uh I noticed that there was a 1.4 percent reduction in your gray streets program.

Deputy Mayor, could you speak to how that reduction will significantly impact the work happening within those corridors?

And what was your thinking behind that reduction?

Well, uh there are a couple.

We are uh retailers and restaurants in particular right now.

Um we need to prioritize stabilizing the businesses that we have rather than necessarily uh incentivizing new.

Um and so we felt comfortable uh with a modest reduction uh to that program so that we could continue to support uh businesses, but uh not over-index on growth.

Uh Deputy Mayor, um Chairperson Fieldman asked your question in you about the economy and how is you guys seem to be stabilized, right?

Like from a uh a budgetary standpoint, like at what point do you feel as though we would start to see an an uptick in like your strategy, like growing the economy?

How do you know it's working?

Well, uh some of the things that um we track, obviously, are GDP, actual economic activity.

Um we should track housing starts, um, new business starts.

Um those are all of the kind of typical job growth uh right now.

We are at a pretty high unemployment rate, so we need to track employment numbers.

Um then once you start getting more granular, you start looking at household income and whether or not it's equitably distributed.

Um those are all of the types of indicators.

Uh I would suggest that um in a uh revenue environment where we're all managing across all parts of our budget uh to continue the programs that matter most to people, but recognize the time that we're in, that Demped's budget uh as it's currently crafted, is designed to support existing businesses and stabilize.

That is what we're gonna be experiencing over this year and next year at minimum.

We need to keep growing the economy by attracting new business.

Um and then third, we need to keep stabilizing our housing market.

And I cannot underscore how incredibly important this is, that we stabilize our housing market and get back to market norms, because right now investors are very skittish.

And uh we have enjoyed growth for 20 years in a row, and we've done it because we've had policies that support that growth, and we need to keep at it.

It's very important.

We all desire to have more production of housing, and in order to meet that goal, we need to make sure that our market fundamentals are good.

Uh thank you for that.

Deputy Mayor, you talked about growth, right?

Um I will say that in last year's budget and this year's budget, I applaud the work of the mayor and your team for investing in Ward 7 projects that have historically been uh stalled or under budgeted.

Uh with that being said, I noticed that within the real estate development division that there is a 824 uh $824,000 reduction leading to three FTEs.

Uh my question, Deputy Mayor, how can the community be assured that these personnel cuts won't lead to further delays in delivering uh large-scale developments, affordable housing, especially when I look at places like Skyland or AOEs.

Uh could you speak to that uh thank you for the question, Councilmember Felder?

Uh so there's no uh net loss of staff in Demped, it's a shift of funding sources.

Um so we have the same amount of uh folks for our real estate uh projects.

Thank you for that.

Uh now, Deputy Mayor, you talked earlier about the tech ecosystem fund.

Uh I know that $2.2 million uh was allocated to this fund.

Now historically, when you think about tech, you think about wards like two and six.

Could you speak to, if any, how are you looking at this tech ecosystem fund?

How can Ward 7 be a place for uh startup companies?

So the tech ecosystem fund is specifically designed to uh broaden the people that can participate in technology and technology opportunities going forward.

So the money is uh earmarked, if you will, or designed around creating accelerators and incubators.

And I always like to give this example, which is uh in the city of Berlin, which I uh went and studied for a little bit, they have they're about the same size as DC, and they have 25 incubators and accelerators, and we have two.

And so if we want to be uh the startup hub that we aim to be, we are already we're already um indexing, you know, as top 10 uh in the country and in the world.

But if we really want to lean into that, uh which I believe is ours to get, uh, then we need to grow the opportunities and um help entrepreneurs that are looking to get into this space with technical assistance, with events, with networking opportunities, so they can meet new venture capitalists, they can meet their peers, and they can grow their business.

Uh thank you, Deputy Mayor, for that.

Uh I'll spend the last two minutes of my uh round asking about the hottest project in the city right now, which is RFK.

Uh could you speak to um the budgetary oversight process that your office plays in partnership with the PMO?

Well, uh I don't I wouldn't I don't want to say that it's budgetary oversight.

We are partners.

Um, a lot of the RFK funding was initially placed in Dem Ped's budget.

Um and so uh as there is required movement of those funds to DDOT to DGS, we do that in conjunction with the PMO.

Um you have to remember that uh some of Dem Ped's staff works directly uh on RFK, and so uh it's a one-team approach, a one government approach, and uh the budget that's that is dedicated to RFK that's in Demped's budget uh is fully coordinated and directed by the PMO.

Um I had an opportunity to uh ask questions to the PMO team doing my oversight doing the oversight uh process.

And uh my question for you, Deputy Mayor, you've had an opportunity to look at a number of projects across the city from different scales, different magnitudes.

Do you think with a project of uh such magnitude talking about RFK that uh the PMO needs to be a separate entity with its own uh budget item?

Um I think those are two different questions.

Um I do think that there uh could be uh you know and I think that it's starting to be this way that RFK is having you know its own budget uh line item.

That's the case in Demped's budget.

Um so yeah, I mean, obviously, budgetary and financial management uh is gonna be very important for a project of this scale.

Um but in terms of creating its own entity, um, at this point I would not recommend that.

Um Demped has delivered uh, for example, Audi Field being, you know, and that being managed inside of Demped.

I look at St.

Elizabeth's and the scale of that development, which is 230 acres, um, and the fact that that is managed uh out of Demped.

And so I'm not concerned uh with and at this point we need to open by 2030.

Uh trying to stand up a separate organization will be a distraction and slow us down rather than get us to uh that very important milestone.

Uh thank you for that, Deputy Mayor.

Thank you, Mr.

Chairman.

Thank you.

So you're very popular, Councilmember uh Crawford has also joined online and she uh councilmember Tran White is next, and then Councilmember Crawford, we will turn to you after Councilmember Tran White.

So Councilmember White when you're ready.

I'm in an out of this here, Renchem.

I do have some questions in which we'll be sending them by email, but I'm just listening at the moment, Jim.

Uh okay, wonderful.

Thank you very much.

Okay, Councilmember Crawford when you're ready.

Good afternoon, everyone.

Can you hear me okay?

Uh yes, yes, we can, but I I don't think I can we can see you.

I am going to try to pull over at some point.

All right.

So if it's a choice, it's a choice.

Thank you.

Okay, okay.

Uh good afternoon, Deputy Mayor Albert and your team.

I want to first start with the well, thank you for your testimony today.

Um we heard from a couple witnesses who were asking about the Chinatown lease incentive grant program.

And I just wanted to hear your perspective on any changes to the program.

And I wasn't sure whether there's any structural changes to qualify.

Can you just talk a little bit about that particular program?

Sure.

Um, first of all, we just uh recently released the FY26 funding um availability, um, and we have not made any significant changes to the program.

Uh the way that we have prioritized um the distribution of funds and the awardees has really been based on either the opportunity to recruit a new business to Chinatown, um, but more than anything, uh we've been able to use the funding to support businesses that have long-term leases that are already in Chinatown.

So uh seeing take up, you are seeing take up with the program.

Uh well, we awarded three businesses last year, and uh we will find out about how many applicants there are for this year.

Okay, thank you.

It was a modest, by the way, it was a modest amount of money.

Um, so it was 125,000 per year for three years.

I remember.

Okay, thank you.

And then shifting to the supermarket tax intensive program in your prior performance oversight responses.

You noted that since the fiscal year 2022 budget amended this program.

Only one participating grocery store has opened, and that was Whole Foods Market and Ward 4.

Considering that development and that there was only one market, one supermarket that opened after the last change.

Why do you think this incentive has not been successful with attracting more supermarket supermarket development to ward seven and eight?

And do you believe that the latest changes will actually uh bear fruit there?

So um if everybody remembers uh the supermarket tax credit is um has defined areas in the city that it can be used.

Um it's portions of ward uh five, seven, eight, and now downtown.

We expanded it to downtown.

Um we're hoping for an announcement for downtown, but haven't had one yet, confirmed.

Um, and then as for wards five, seven, and eight, um, you know, I think that the cost profile uh and the profitability profile for many of the grocers that we've spoken with uh is has not been there.

That the revenues expected compared to the expense of running those stores does not meet the threshold for a new grocer.

Having said that, we continue to work at it, and we I think that we really just need uh we just need to keep working at it.

We just need to keep working at it.

And we're doing that.

We've had positive conversations with new types of grocers that um, you know, groceries changing quite a bit now.

There are some people that are moving towards a combination of bricks and mortar stores with the delivery uh option and Instacart, for example.

Um, and then that can be an additional revenue source for grocers.

And so we're seeing just that shift and turnover and continuing to talk to uh folks that uh previously we didn't either know about or hadn't had an introduction to.

But I don't want the track record of the recent past for attracting grocery stores to those areas to deter us from uh either offering the supermarket tax credit.

That would be a mistake to remove that tax credit because it is uh an invitation for a conversation and a negotiation.

And it's also a tool that we have to support the opening of a grocery store.

So let's not use that as a deterrent from keeping it on the table.

I agree with you.

I wasn't saying eliminate it.

I'm just trying to make sure that we see some results in Ward 7 and 8.

I know during your performance uh hearing you also mentioned innovative approaches to opening or I guess increasing food access.

And I recently visited Dreaming Out Loud grocery store on Barry and Berry Avenue.

So I think there are some creative things that we can do in this area.

And I would love to partner with you on that too.

We are totally open and absolutely want to bring more food and fresh food options to Ward 7 and 8.

Great.

Let's switch to you probably already talked about this, but I missed it earlier.

Office to anything.

Some of the changes in the BSA subtitle are interesting.

So I wanted to ask you about you in the BSA, the subtitle provides developers with a period to cure ineligibility.

Why was this period to cure and ineligibility important to include?

What is the rationale there?

Well, uh look, I mean, everybody needs a chance to improve and fix you know if there's an issue.

So this is something that uh is not unusual for any of our um programs that you know, if there's either a default or if there's um, you know, sort of a uh a hiccup that um that business or that developer can can cure it and fix it.

So um I'm not sure if it's not related, it's not related to anything you've learned while office to anything has been in place.

I'm just trying to see where because it wasn't originally in the legislation in prior years.

Uh we'll need to get back to you.

I'm I'm not exactly sure.

I mean, I didn't think that we introduced that into our BSA proposal.

Um, it might be in our regulations uh versus in uh the law, but um let me I'd like to get back to you on the specifics.

But I think council member, with anything you allow um due process, um, especially when the amount of money has been expended.

So just to say we're gonna take something wouldn't let have developers feel comfortable about a program if they know you can take it uh after they've expended so much money and don't have a right secure.

Okay.

Thank you, Ms.

Owens.

Uh Director Owens.

And then additionally on office to anything, the subtitle is also making it more flexible by not just requiring office conversions, it could be non-office, it looks like, to any non-residential use.

What outcomes is DIMPED prioritizing with this broader flexibility?

Is it jobs?

Is it foot traffic?

Is it the tax base?

Um, and how will you measure success?

Really, what we're trying to do is take underutilized assets and bring them back to vibrancy.

And the example that I used uh earlier was the Hotel Harrington.

Here's an existing hotel uh that has been vacant for a couple years now, and it's in a critical part of downtown, you know, and it's really at our front door on Pennsylvania Avenue.

Um so to be able to support the redevelopment of that building and have it be uh occupied again uh is just as important as converting an underutilized office building uh to something new.

Thank you.

And then on I see I have a minute and 50 seconds.

Okay, so I missed your opening testimony and most of the rounds before me.

So I just wanted to hear a little bit more about Zimped's vision for the central Washington area development and anything that you want to share around the federal property development tax incentive and tax funds.

Um I love this question because I think the opportunity for downtown DC as we know it is to really uh become more like individual neighborhoods that have their own character.

So if you look at uh from Union Station uh all the way down to the West End, so from the East End of downtown to the West End of downtown, you have really different experiences.

Gallery Place Chinatown uh is where all the arts, culture, and entertainment is, and it's pretty concentrated, and that should have its own brand.

We're already seeing that universities and young people want to be there because of its access and its dynamicism.

And so that should be branded and designed and promoted as a as a as a neighborhood that offers something unique.

When you get closer to the Wilson building and the White House and these historic properties, you could see something where that's really more about institutions and you know tenants that want to be right near the center of power.

When you go towards the West End, that's really where a lot of our global community is, as well as our corporations that want to connect to places like the World Bank or GW or other kinds of the assets that are there.

So the vision for our central business district.

Oh, and last but not least is Southwest.

What is Southwest?

It's south of the mall, north of the wharf.

This is in essence a new 230-acre uh neighborhood that also could have its own distinct feel because it's new opportunities.

And I can already imagine with the wharf being to the south, the spy museum being in the middle, and then uh along 10th Street up to all of the Smithsonians that are along Independence Avenue, more uh a combination of public and private museums, entertainment, and a whole new district emerging around that area.

So our vision, the mayor's vision for downtown is vibrancy first.

That requires a mix of uses, getting away from 90% office to more of a 40% residential, 50% residential, maybe 60% residential, depending on what part of downtown you're at, and distinct neighborhoods with unique character.

Because how we compete as a city in the future is that our downtown is vibrant, and that lots of different the things that make us unique are that we are a city of communities, and downtown has to reflect that same ethos and set of opportunities where regardless of who you are or where you come from, you can find a place that feels like home.

Thank you.

Thank you for that.

Uh thank you, Chairperson Fruman.

Those are all my questions for now.

All right, thanks.

Will you be staying for another round?

I'll be listening, but uh I'll be in transit.

Okay, great, great.

Uh well, building off of that, uh I was about to start asking about uh the federal property development tax incentive, but before that, stepping back, and you started to talk about this about Southwest DC and how you envision that working.

It was interesting.

Kevin Clinton was here earlier, and we talked about how do we digest all of this, and he was saying it takes it's gonna take a while, and that we should have a plan.

I believe Shalom Baronis had an article, I don't know if it was in the post or the Washington Business Journal, where he sort of said the opposite, I thought, or at least that's why I interpreted it that we should let the market drive the evolution.

But how are you seeing how how's the administration seeing the approach on Southwest generally in terms of the pace of the federal government turning over buildings and the need for planning or not?

How are you seeing that dynamic?

Well, um, I'll just give a couple quick, easy stats.

The area that we're talking about is south of Independence Avenue, north of 395, uh from 14th Street over to 4th Street.

That's approximately uh, well, uh 230 acres.

There's currently 40 million square feet built.

18 million is owned by the federal government.

Um, and it predominantly is already kind of a federal enclave.

So even the private offices that are there are occupied by federal agencies under a lease.

So as uh the federal government uh disposes of buildings, uh you have to remember these are significantly large buildings.

So the Department of Agriculture, for example, is over a million square feet.

So it's huge.

Um and let's assume that the federal government is going to be consolidating so that they have a smaller footprint.

They're not getting rid of 18 million square feet.

Maybe they're getting rid of half of that.

So nine million, I'm just making up numbers.

Nine million square feet.

So our challenge as a city is to figure out um who's gonna buy those buildings, how much is it gonna cost for them to redevelop them, and what are they gonna redevelop them into?

Planning is a fundamental when we start conceiving of a new area.

And Southwest is no different.

So I do believe that planning is important.

There are some things that are kind of obvious if you really look at urban plans that Southwest DC could kind of be envisioned in three neighborhoods.

One could be a really dynamic residential community near the portals.

There's already been a federal office building conversion to residential.

It's called the Cotton Annex.

And that is a brand new residential development.

Can I just ask, were you referred to the portals?

I should know, but where is that?

The portals are a couple different buildings around or near the salamander off of 12th Street.

And they're a mix of residential buildings and office buildings.

Last year, uh the developer had they are currently doing an office to residential conversion.

So I would say that between 12th to 14th Street, those federal buildings, their historic 1920s buildings, tall ceilings, lots of light, you know, those are great residential conversions, but you have to put the zoning in place.

You have to make 14th Street more hospitable, because right now it's you know a big, it's kind of a freeway.

Um if there if you're really gonna have a residential area.

So planning is needed.

If we are to convert 10th Street, which is a connector from the Smithsonian Castle down to the wharf, uh right now it's straddled by the four-stall building, the Department of Energy.

The Department of Energy recently announced that they're gonna be moving out of four stall.

And so when GSA is ready to sell that building, we'd like to partner with them and talk about demolishing it and opening it up so that we can get that great connection down to our beautiful waterfront.

Um, and we want to remain home to the federal government.

We are home to the federal government.

And so we want to make sure that wherever the federal government relocates, that they have a great community with food amenities, access to transit, safe communities, so that their workers uh can continue to enjoy DC just as they have done for over a hundred plus years.

So that was uh two areas, 12th to 14th, then the 10th Street area, and you said you had said it was you could conceive of it as three areas, I guess.

What are you thinking about?

Closest to closest to um Capitol Hill, so from let's say 7th over to 4th, um, that's where a lot of both private as well as federal office buildings are.

Um, there is desire on behalf of federal agencies and private sector people to be close to Capitol Hill.

Like that proximity, I think, you know, is desirable.

And so I could see that um having mix of uses integrated, but that that remains predominantly an office marketplace, uh, just like I conceive of um the area around Metro Center that is closest to the White House, uh, you know, having some of our highest concentration of office when uh you're looking at north of north of the mall.

Okay, and then specifically on the the uh federal tax abatement, you heard the testimony earlier about the date uh that it's October 1, 2026, and there are two projects that are moving now, and so one of them was represented asking, suggesting that maybe we should be changing the date to January 1, 2026 so that those projects could be included.

What was what's your reaction to that testimony?

Uh I think that that um is a fine reaction.

I mean, I I don't have uh any issues with that.

It's the the design of this tax fund is intended to support the redevelopment of uh federal buildings when they're privatized, and so um if that makes it viable for the two buildings that are currently well, one just recently closed and sold, the other one is still on the market, um, you know, that would be fine.

Okay, and then you may have heard the testimony in there's uh I think we've had a little bit of back and forth on this.

So the funds generated by the trans the abatements in certain areas can be used in a broader area.

And somebody uh with a dahlion person testified, shouldn't that be limited to the bid?

I mean, that's one geographic area, but uh to the bid in which the project occurred and the funds were generated.

What was your reaction to that?

Um I don't agree with that.

Um right now we have two programs, as you know, to revitalize downtown or to convert underutilized spaces.

Um but downtown's gonna need more than that.

And I say downtown to include Southwest, by the way.

I know we don't we haven't talked about it that way, but our central business area includes all of the offices that are south of the mall.

So in order to convert downtown to be more mixed use, we're gonna need to invest in green space.

We're gonna need to invest in, like I said, pedestrianizing uh certain kinds of streets so that it can accommodate more of a neighborhood feel.

Um we're gonna need to invest in civic uses.

And umtown north of the mall is very important to us, just like uh Southwest is south of the mall.

And so uh I think that having flexibility for the city to invest in catalytic projects that uplifts all of our central business district, we need that flexibility, and I would not geographically constrain it beyond roughly what I would call downtown DC bid, golden triangle bid, and southwest bid.

That covers kind of the areas.

Okay.

And so you want to keep it so that whatever happens anywhere in those places could be used any in any of that part of what you're thinking of now is a broader definition of downtown.

Yes.

Okay.

Um the Wamada joint development properties tax abatement, it would create a 20-year property tax abatement for properties owned by Wamada and subject to a joint development agreement with the district.

The FIS highlighted Tacoma, Friendship Heights, Fort Taunton, Dean, and the Deanwood Metro Rail Stations as potential eligible development sites.

You've also talked about market conditions generally and the challenge of market conditions generally.

And what you don't have a crystal ball, but what is your assessment of the likelihood that a development agreement for each of these locations could be signed within the next five years?

Or you know, what put another way, how likely is this abatement to catalyze development at Metro sites in the near term given current fiscal and market conditions?

So again, I think that our job is to put all of the structural programs in place now so that when market conditions are better, then the developer can get going right away.

Um this program uh is conceived for a couple different reasons.

Uh let's put market conditions aside.

Uh under a normal joint development deal with Metro, one of the primary requirements that adds cost that most private developers cannot absorb are the need to maintain transit operations 20, you know, all the time.

Like you still need to access the metro station when you're under construction, and the developer has to find that accommodation.

The second is very often you need to replace those transit facilities.

I'll use Fort Totten as an example.

If you're gonna develop uh Fort Totten, you need to maintain or move those bus bays and or consolidate the parking, what is right now surface parking into a garage.

That is extraordinary cost to the developer that is only getting profit on the building that they build.

So the tax abatement is necessary at Metro properties anyway, regardless of what the market is doing, so that those properties can get going, which is why we haven't had that much development.

We have a joint development agreement at Deanwood, for example, and it can't get going without additional inducement.

And so this uh abatement would support the development of Deanwood.

Same thing with Tacoma Metro Station.

There's already a joint development agreement signed, um, but for additional resource would not be able to deliver the new uh homes that it promises.

So uh that's needed in all cases, um, but I would just say generally to market conditions.

We need to put plans in place so that uh investors see that there's a serious commitment by the city, see that there's a financing solution for these extraordinary costs, um, and then uh all of that is in place for when they're ready to go.

Okay.

Um a different thing, and we have talked about this and you've spoken about it that makes it challenging can be inclusionary zoning requirements.

And in this context, you have uh 10 percent at 60 percent, and I think 10 percent at a different level of AMI.

Uh as I focus on Friendship Heights, there are zoning changes that are in the queue that actually would have higher levels of inclusionary zoning.

Which do you see as taking precedence, the this abatement or the zoning that is done through the current process?

And if it's a lower IZ requirement, how do how do we defend that lower IZ requirement?

So as I just mentioned, the cost of developing at Metro stations is already is very high.

So any time you add more affordability requirements, the cost of the project or the cost of subsidy goes up for the district.

So it depends on what you're balancing.

Are you trying to get development?

If you want development and more housing and net new affordable units, then you want to make sure that the numbers work.

Um so for metro properties, we're providing this tax abatement to just compensate or deal with the fact that transit facilities cost as much as they do.

Um so I think it's important to have inclusionary zoning at 20 percent, which is what we are uh uh I think it's 10 percent.

Yeah, it's 10 and 10.

10 at 60 percent of AMI and 10 at 80 percent of AMI.