D.C. Mayor-elect Janeese Lewis George (D) faces serious fiscal challenges. The city already has a bloated budget, and the significant tax increases she and her allies on the D.C. Council have proposed would undermine the local economy.
Luckily, the incoming mayor has a promising opportunity that wouldn’t break the bank. Much of the District’s downtown area is occupied by underutilized federal properties and crying out for redevelopment. Lewis George has a chance to create a vibrant new neighborhood if she works with willing federal partners.
Diane Sullivan, the acting executive director of the National Capital Planning Commission, recently unveiled details of a master plan by federal and city officials that would reimagine the economic dead zone south of the National Mall where many agency headquarters are located. The idea is to remove or adapt those structures, making room for a new residential community along the Tidal Basin, an entertainment district and other mixed-use developments. The plan is expected to be ready for review early next year.
The project could be a boon for everybody involved. For D.C., it could help expand the city’s housing stock and help generate growth, which is essential to managing its long-term finances. For the federal government, it’s a chance to consolidate agencies into properties that are better suited for their needs and off-load aging properties, which have crushing maintenance costs.
Such a large-scale project, however, would be difficult to pull off. It would require enormous private investment over many years. The master plan is thus essential; it will help give investors confidence that there is a coherent vision for the roughly 230-acre area.
Just as important are mechanisms to execute that vision, which is where Lewis George’s incoming administration will be essential. She has already indicated her goal to create a “downtown development corporation” that would help facilitate Southwest projects. This could be a good idea, though its success will depend heavily on the details.
Cities have been using development corporations for large-scale redevelopment for years. Typically, these quasi-public bodies can buy land, secure capital for projects and negotiate deals among developers to achieve their broader goals. They often have bonding authority, meaning they can borrow money cheaper than private developers, and can pursue creative ways to pay for needed infrastructure, such as tax-increment financing. Crucially, they rely on the private sector — not the city’s budget — to generate the bulk of the capital needed.
D.C.’s past experiences with development corporations have been mixed. Two such bodies, the National Capital Revitalization Corp. created in 1998 and the Anacostia Waterfront Corp. created in 2004, were both tasked with revitalizing neighborhoods in the city, but they were plagued by poor management and bureaucracy. Both were dissolved within years.
Lewis George might instead borrow inspiration from cities that have had better experiences, such as Cincinnati. Its development corporation, a fully private nonprofit called 3CDC, is heralded for successfully redeveloping its downtown and adjacent neighborhoods. The essentials of its success: top management talent, focused mission and long-term independence from political whims.
Replicating that model would be difficult in a city as complicated as D.C., where the dominance of the federal government adds a layer of complexity no other mayor must navigate. Still, if Lewis George manages to get this right, it could be a defining element of her legacy as mayor in the nation’s capital.
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