The Download: D.C. Council tech bills show sector has matured, garnered attention

Three bills pertaining to the District’s technology sector came before the D.C. Council last week as council members pored through a bevy of agenda items before adjourning for the rest of the summer.

The tech bill with the biggest sticker price — a $32.5 million tax break for daily deal purveyor LivingSocial — passed with unanimously. A separate measure to reform taxes for techies and their investors was punted until September.

While advocates had hoped to see both measures get the green light, the fact that the tech sector has landed on the city’s radar was trumpeted by some as a sign of the local industry’s continued maturity.

(The third item was an amendment to taxi regulations that would have set a minimum fare price for luxury car service Uber, which is popular among local entrepreneurs. That debate was postponed until later this year.)

The bills also reflect a conscious effort by city economic development officials to craft policies that bolster the burgeoning sector, which Mayor Vincent C. Gray (D) has said will be critical to the city’s economy as federal agencies and contractors face budgetary pressures.

The Office of the Deputy Mayor for Planning and Economic Development appointed a dedicated staffer, Jenifer Boss, to focus exclusively on the needs of the tech sector.

But even as many agree the bills are a welcome sign, their content has been a matter of dispute. Some local entrepreneurs and economic development enthusiasts question whether they will deliver the greatest possible impact.

Chief among them is Ken Archer, a blogger for Greater Greater Washington and chief technology officer at Tysons Corner-based Telogical Systems. He has criticized the city for offering too steep a tax break to LivingSocial rather than adopting policies that benefit a wider array of tech firms.

The legislation provides LivingSocial with corporate and property tax abatements beginning in 2015. By then, the company expects to generate taxable income, add 1,000 local employees and consolidate its local workforce into a single office.

Tim O’Shaughnessy, LivingSocial’s chief executive, is the son-in-law of Washington Post Co. Chairman and CEO Donald E. Graham.

Funding for Sonatype

Silver Spring-based Sonatype raised $25 million in venture capital from New Enterprise Associates and other financiers last week as the company looks to bulk up its product development and marketing efforts.

Sonatype manages a repository of open-source code that developers can piece together to build software. The company also provides insight about the software, such as licensing requirements or security concerns.

Existing investors Accel Partners, Hummer Winblad Venture Partners, Morgenthaler Ventures and Bay Partners also participated in the round. The latest deal brings the company’s total funding to $35 million.

overlys@washpost.com

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries. Steven graduated from the University of Maryland’s Philip Merrill College of Journalism. He resides in the District.
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