Correction: This column gave the wrong address for land owned by D.C. developer Douglas Jemal that could become part of an eminent domain proceeding. The property is at 1620 South Capitol St. and Half Street.
What could sound more innocuous than the Real Property Tax Assessment Evidence Clarification Act of 2011?
D.C. Council Bill 19-602was introduced in December by Jack Evans (D-Ward 2), chairman of the Finance and Revenue Committee. If the bill becomes law, it couldwind up costing the District millions of dollars, officials say.
How did this come about?
Evans told me this week that he introduced the bill on behalf of area real estate developer Douglas Jemal, president of Douglas Development Corp. Jemal owns land on South Capitol Street that the District might take in an eminent domain proceeding.
Evans said he doesn’t believe he spoke directly with Jemal about the matter but recalled that in December Norman “Chip” Glasgow, a lawyer who handles Jemal’s real estate matters, provided him with language that serves as the basis for this legislation.
I spoke with Glasgow this week. He confirmed that he asked Evans to introduce the bill on Jemal’s behalf.
Glasgow explained that eminent domain procedures in the District allow property owners to introduce a real estate appraisal, but not a property’s tax assessment, as an indication of a property’s fair market value. Glasgow said that Maryland law allows owners to introduce such assessments when they are higher than the state’s contention of a property’s fair market value.
The bill, Glasgow said, would allow Jemal and other developers to introduce tax assessments on his property in eminent domain proceedings.
Now to the back story.
According to the D.C. Property Sales Database, on Jan. 29, 2007, “DC developer Douglas Jemal (in the form of Jemal’s Ballpark LLC, Douglas Development) paid $4.25 million for 1201-1225 South Capitol Street.” The land sits across the street from Nationals Park— and stands in the way of improvements the District intends to make to the South Capitol Street bridge (a.k.a. Douglass Bridge) and to traffic patterns around the stadium.
The District appraisal put the fair market value of Jemal’s South Capitol Street parcel at $12.5 million.
Hmm. Buy for less than $5 million; sell, five years later, for more than $12 million. Not bad.
But the D.C. tax assessments on the land, government sources told me, has increased to more than $60 million. The Evans bill would allow Jemal to introduce the tax assessment into evidence in an eminent domain proceeding. If the bill becomes law, and should Jemal prevail in a hearing before a jury, he could make more than $50 million on this property alone.
The bill was referred to the D.C. Council’s Judiciary Committee, which held a public hearing on Feb. 9.Committee Chairman Phil Mendelson (D-At Large) was the only member present. Jemal’s name was never mentioned during the hearing.
Lawyers representing the Apartment and Office Building Association of Metropolitan Washington and the D.C. Building Industry Association testified on behalf of the bill, along with two advisory neighborhood commissioners who spoke as individuals. The thrust of their testimony was that, by allowing property owners to introduce their tax assessments in eminent domain proceedings, the bill would level the playing field for property owners when they are competing against the government, which is empowered to assess and collect taxes, and to set a much lower appraised value on property it is taking.
The executive branch, represented by William Burk, chief of the Land Acquisition and Bankruptcy Section of the D.C. attorney general’s office, testified against the bill.
Burk said that tax assessments have long been inadmissible in D.C. eminent domain cases, citing judicial holdings that “appraisements of property by tax assessors for purposes of taxation are not reliable guides of market value, and consequently not admissible in condemnation proceedings.” Several states, he said, have similar provisions covering eminent domain proceedings.
The bill, Burk said, would cost the city untold amounts by requiring the District to pay more than the appraised fair market value to acquire land.
Mendelson told me this week that he was not inclined to move the bill forward, especially while action is pending on Jemal’s South Capitol Street land. Evans told me he introduced the bill without fully appreciating its scope. He said he now understands the impact the bill would have on city finances and “will not support it going forward.”
Bill 19-602 may have merit. But it warrants more scrutiny by city taxpayers, who also have much at stake.
A fact: Since 2000, D.C. Office of Campaign Finance records show, Jemal, his development company and top Douglas Development executives Norman Jemal and Matthew Jemal have together contributed more than $60,000 to D.C. political campaigns, including $3,500 to political committees of Jack Evans.