In bid for reelection as D.C. mayor, Gray cites city’s boom but results are mixed on initiatives

Four months into his term, Mayor Vincent C. Gray flew to Las Vegas in need of a win.

On the floor of the city’s cavernous convention center, Gray — with hiring fiascoes broiling and unemployment rising back home — startled Wal-Mart officials in town for a retail convention. He asked that the chain expand its plan for four District stores with a fifth at Skyland Shopping Center in Southeast Washington.

“They hemmed and hawed, and it ultimately came down to, ‘You have a choice. You can do five stores, or you can do no stores,’ ” Gray later recalled saying.

It was one of the mayor’s first and most direct efforts at achieving for his city what he had promised as a candidate: to deliver to some of the District’s less- fortunate areas a share of the new jobs, housing and walkable shopping that much of the city was already enjoying.

Wal-Mart’s pledge to build that fifth store is widely viewed as a win for Gray, who is seeking reelection and is facing a wide field of challengers in the April 1 Democratic primary. Gray sees it as an emblem of his commitment to coax a few of the sparks from downtown Washington’s red-hot economy to catch flame east of the Anacostia River.


There is no Wal-Mart yet at Skyland, but fewer and fewer skeptics question whether there will be. Still, Gray’s overall success in promoting economic growth is more mixed.

He has been an active booster not only for Southeast Washington but also across the city. In addition to real estate deals, he has promoted ventures involving technology, health care and higher education. But he has also been accused by critics of mismanaging city projects and overspending taxpayer dollars — and of taking credit for a boom he had little to do with.

Focus on Southeast

More evidence of Gray’s focus on Southeast Washington sits on the east campus of the former St. Elizabeths hospital site, between Anacostia and Congress Heights. There, Gray is plotting a mixed-use hub, beginning with a 400-foot-long, city-built food pavilion aimed at serving the 4,000 employees of the U.S. Coast Guard, whose headquarters relocated across the street.

Gray added an attraction — a $220,000 ice slide — to draw hundreds of children on weekends to a campus that had been fenced off to the public for decades.

Yet the efforts have not come without costs or missteps.

The campus has attracted tentative commitments from tech firms including Microsoft and the French lighting firm Citelum. But the pavilion cost $8.3 million to build, more than $3 million over its initial budget, and the city initially paid a contractor, Brown & Fried, $53,000 a month to operate it. Victor Hoskins, Gray’s deputy mayor for planning and economic development, terminated the operator after six months over a disagreement.

Oramenta Newsome, who has worked in community development in the District for more than a decade at the Local Initiatives Support Corp., said she gawked at the crowds on the sidewalk recently while driving down Good Hope Road in Anacostia.

“It was a Saturday afternoon, about 4 o’clock, and strolling in with their friends and their kids and maybe stopping for a bite to eat were all these people,” she said. “I could not have imagined this three years ago.”

Similarly, work on a $220 million remake of Skyland, an ailing collection of fast-food, liquor and beauty shops, could begin as early as this summer if Wal-Mart starts acting on its agreement to open a 120,000-square-foot store.

The prospect of redeveloping Skyland has been a priority with mayors for the better part of decade, But even if there is a grand opening in 2016, not everyone thinks the project is worth the $30 million it has already cost taxpayers — with an additional city commitment of $47 million in subsidies pending.

Geographic imbalance

Gray’s focus on Southeast Washington has not come at the expense of the rest of the city. In fact, there remains a massive geographic imbalance of new construction that favors downtown.

An August count found that only two of the 47 tower crane permits in the city were for projects east of the Anacostia River: one for a D.C. Primary Care Association facility in Kenilworth and another for a charter school.

Gray has also retained the support of prominent business leaders in part by broadening economic development beyond real estate to other economic sectors. A year ago he agreed to invest $200,000 in the start-up hub 1776, which quickly attracted 175 companies.

Gray’s team also made a bid to boost the D.C.-based daily deals company LivingSocial. Although the company has since been in a free fall (and never received any city incentives), it’s an example of the kind of business the Gray administration is seeking to attract to the city.

“He’s expanded our definition of what economic development is, to include business development. That wasn’t the case under any other previous mayors,” said Richard Bradley, executive director of the Downtown Business Improvement District, an association of commercial landowners. “The previous mantra was sort of, ‘If we build it, they will come.’ That’s always been the muscle that the city has used. And it’s always been connected to property taxes.”

Barbara Lang, president of the D.C. Chamber of Commerce, supported Gray’s first campaign for mayor and donated the maximum allowed, $2,000, to his reelection campaign — and nothing to other candidates.

“I think he’s done, in a little better than three years, what he said he was going to do,” she said. “If you put all the early problems aside — and it was a rough beginning — I think he still has shown that he is the best choice.”

Jobs outlook

Critics, while acknowledging Washington’s boom, say Gray isn’t the one to get the credit. Mostly, they say, he has floated along on the coattails of his predecessors, Anthony A. Williams and Adrian M. Fenty — allowing for the continued progress of big-ticket projects begun before his tenure, including CityCenter DC and the Marriott Marquis Convention Center hotel.

Even if the downtown boom is helping lift up the population east of the Anacostia, that part of the city is still lagging behind. The city’s unemployment rate, 8.1 percent, is at its lowest point in five years, but Ward 8’s jobless rate, while also falling, lingers close to 18 percent. Many of the new tech and professional jobs aren’t likely to employ the legions of unemployed in wards 7 and 8, where illiteracy, low education levels and prison records keep thousands of residents out of the workforce.

The jobs outlook remains a particular point of concern for some residents.

In a January Washington Post poll, 68 percent gave Gray positive marks for business attraction, but only 45 percent rated him favorably for creating jobs for D.C. residents. Before opening its first stores in the District, Wal-Mart said it received 11,000 job applications for 1,800 positions in a week.

Gray administration officials say the One City, One Hire program, in which the city trains and screens D.C. residents and encourages businesses to hire them, has led to jobs for 8,894 people. But the agency that runs the program, the Department of Employment Services, does not track whether people remain in those jobs.

Although he praised Gray for improving some training programs, Ed Lazere, executive director of the D.C. Fiscal Policy Institute, said One City, One Hire appears to be more of a promotional campaign than a new job initiative.

“They’re trying to mostly market existing programs but it’s not clear that the underlying programs have changed. It’s not really clear that that’s a different trajectory than we were already on,” Lazere said.

Cuts in housing subsidies

Meanwhile, affordable housing advocates decry nearly $40 million in cuts Gray made to the city’s main source of housing subsidies.

In each of Gray’s first two years in office — with developers building luxury apartments at a record pace — he and the council cut the city’s main source of housing subsidies, the Housing Production Trust Fund, by nearly $20 million.

At a large citizens summit Gray held in 2012, residents issued a strong rebuke to the cuts, indicating overwhelmingly that bringing down the cost of housing was their top priority.

Gray vowed the next year to commit $100 million annually to affordable housing, which he said would preserve low rents in 10,000 units for seniors, government workers and other medium- and low-income residents.

Peter A. Tatian, a senior research associate at the Urban Institute, said more money is needed if the city doesn’t want to see lower-income residents dislodged. “I think the city is doing a lot, but I think there’s just a huge need,” he said.

Gray’s management of the New Communities initiative has also come under scrutiny; the city has promised for nearly a decade to overhaul four blighted public housing complexes scattered across the city into mixed-income neighborhoods that welcome new investment without pushing out longtime residents. So far, there is little to show for the effort.

D.C. Council member Muriel Bowser (D-Ward 4), who chairs the council’s economic development committee and is a candidate for mayor, said Gray’s lack of leadership of the program was allowing it to fail. “New Communities has just been a series of broken promises to residents,” she said.

Lazere, who advocates for low- and moderate-income D.C. residents, called for the mayor to rethink New Communities entirely — and to be more forthcoming about his intentions.

“We don’t feel the city has been fully transparent with the affected communities about whether their projects are going to move forward or not,” Lazere said.

Hoskins said he and the mayor are studying how to move forward with New Communities.

As the District prepares for the April primary, its economic boom will probably continue so long as the city keeps adding new residents. It is now gaining about 1,100 per month.

Tatian, of the Urban Institute, said it was difficult to assess how much credit to give a mayor for that kind of growth.

“Some of that is driven by factors that are larger than the mayor of a city. I mean, people all over America are moving back to cities,” he said. “I think sometimes mayors get too much credit or too much blame.”

Aaron C. Davis contributed to this report.

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.
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