The Mayor's Advantage

Fenty says D.C. doesn't need an independent development agency. (By James M. Thresher -- The Washington Post)

Mayor Fenty and the D.C. Council are headed for their first major dust-up, over who will be in charge of some of the city's biggest economic development projects.

On the surface, it may look like a relatively minor disagreement over how to move boxes around the organizational chart. The council is proposing that the National Capital Revitalization Corp. and the Anacostia Waterfront Corp. be folded into a single new agency to manage the development of several key parcels of city-owned land. The projects include not only the massive effort to redevelop the Anacostia waterfront but also redevelopment of the old D.C. General Hospital site, St. Elizabeths Hospital and the McMillan Reservoir. In time, other projects could be added to the new authority's portfolio.

The mayor, on the other hand, says there is no need to have any independent development authority. To be successful, he argues, such projects require the close collaboration and cooperation of a variety of city departments, from planning and zoning to transportation and business development. They also need the political support of the mayor and council. For those reasons, Fenty says, those functions are best consolidated in the office of the deputy mayor for economic development.

One thing that both sides agree on is that the current setup isn't working. Although both the NCRC and the AWC were established to accelerate and streamline redevelopment, nearly all their projects have been plagued by seemingly endless delays. Operations have become bureaucratic, while many projects became mired in petty political and jurisdictional squabbles. Turnover in key positions is high, and there have been accusations of favoritism, patronage and downright incompetence. Neither agency seems responsive to -- or responsible to -- anyone.

So it was no surprise when, shortly after taking office, Fenty forced out the executive directors of both agencies. But before he could get around to announcing his reorganization plan, Kwame Brown, chairman of the council's economic development committee, came up with his own proposal that won unanimous backing of his colleagues in a preliminary vote this week.

As I see it, both sides in this dispute are half right.

The council is certainly right that it makes little sense to have multiple agencies involved in project development, each with its own highly paid executives and bureaucratic functions.

And Fenty is certainly right that big, complex development projects require the kind of leadership and coordination that a mayor can provide.

But Fenty's mistake is in thinking that a development agency that is legally independent must be politically independent. In fact, most big cities have just such an authority that operates under the effective control of the mayor. In those cases, the mayor appoints the executive director and a majority of the board. And everyone knows that no major decision is taken without hizzoner's say-so.

The same was largely true in Washington until Tony Williams became mayor. For all his strengths, Williams was inept at imposing discipline on his appointees, particularly those at the so-called independent authorities. He rarely bothered to pick up the phone and tell them when there was an important issue on which he needed their support. And when they took steps to thwart his policy priorities, he rarely criticized them in public or summarily removed them from office in a way that would have sent a warning to all his other appointees.

The new mayor has a chance to change all that. Rather than fighting the proposal for a single Economic Development Authority, Fenty should embrace it and -- like big-city mayors elsewhere -- turn it to his advantage.

He should insist that the council amend its legislation to provide that the agency's executive director serve at his pleasure, like any other department head. And he should make it clear to prospective board members that their political loyalty will be valued as much as their policy advice.

He should ask that the agency be authorized to pay salaries well above those typical for city government to attract experienced talent from the real estate development industry. These are projects, after all, where success or failure can have an impact of tens of millions of dollars on city finances every year. In that context, it's silly to worry about whether the deputy director happens to make $50,000 a year more than the mayor.

At the same time, Fenty should insist that the independent authority be set up to finance its own operations with income from rents, fees and other considerations that it negotiates with developers of its projects. That would make those higher salaries more politically palatable. That revenue could also be used to subsidize projects that include large amounts of affordable housing or other public amenities without ever having to dip directly into the city treasury.

Fenty should suggest that the new agency be freed from the full complement of city procurement and contracting rules that are, at best, cumbersome and, at worst, prevent the city from getting what it needs, when it wants it.

And the mayor could ask that the agency be granted limited authority to issue bonds, create tax breaks, enter into leases or contracts or land transfers -- all powers that now reside with the council. In the past, the process of negotiating such approvals has opened the door for council members to insist on changes to projects or demand favors for constituents and supporters.

But if the council is really serious about expediting these important projects, it should be willing to give up some of its discretionary powers to make it happen.

Steven Pearlstein can be reached atpearlsteins@washpost.com.