Feeling the Pinch Of D.C.'s Prosperity

Merchants do not dispute that their properties are more valuable. But they say they cannot afford the pace of the increases. The District, they say, should cap how much their payments can grow annually, as is the case with residential properties, which have a 10 percent ceiling.

"I can't argue with the valuation; it's the effect," said Dennis Bourgalt, owner of Chateaux Animaux in Capitol Hill, whose tax payments have doubled in the past year.

Evans, chairman of the council Committee on Finance and Revenue, said he proposed a commercial property tax cap but got little support from his colleagues, who were worried about the revenue loss. The cap would cost as much as $240 million, according to an analysis by District officials. The council is working out how to dole out the $11 million in tax relief funds.

Many property owners seek relief by appealing the District's assessment, a strategy that worked for Jeremiah Cohen, owner of the Tabard Inn on N Street NW, who won a reduction and saved $25,000 in taxes.

But not everyone is successful. The Rupperts lost an appeal of the District's finding that their properties, on a block where developer Douglas Jemal has assembled a number of parcels, had increased in value from $2.8 million to $14.5 million.

The family recognizes that its good fortune is born of Henry Ruppert's decision in 1890 to open a hardware store at 1021 Seventh St., then buy two neighboring properties. The store was in business until 1986, after which the Rupperts opened the theater and gallery, known as the Warehouse.

The family could keep the properties and find tenants willing to pay the necessary rents. But Paul Ruppert said he prefers to sell rather than lease the space to a national chain.

"If the Rupperts move from Seventh Street, it will be sad for our family," he said. "But we recognize that cities change. For us, it's about navigating the changing times."