D.C. seeks to attract more applicants for retail financing program
Given the frigid funding climate, you'd think real estate developers and owners would be jumping at government money. But $11.5 million in available retail tax increment financing continues to sit untouched in the coffers of the District's Office of Planning and Economic Development. David Zipper, the agency's director of business development and strategy, is trying to change that.
Last week, he invited some 40 retail brokers, property owners and developers to the offices of the Washington, DC Economic Partnership for a presentation on the Downtown Retail Tax Increment Financing program. "There's never really been a concerted effort to make sure that everyone has heard of [the program] and knows the basic parameters," said Zipper. "Retail is a huge sector for job creation in the District."
The program, launched through the Retail Incentive Act of 2004, provides financing to attract stores and restaurants located within 15 blocks of 9th and G streets in Northwest Washington. Property owners can receive up to $5 million to reduce the cost of tenant improvements. Tenants and landlords often wrangle over such expenses, making the incentive attractive for both parties.
But broker Bill Miller of Transwestern suspects people are turned off by the bureaucracy involved in pursing the funding. "It's a very complicated process to enact," he said. "It could take up to six months to get the TIF paperwork through. And if you want to do a deal, that might not track with the deal."
Interested parties must advance through about four levels of approvals to access the money. Level one: applicants must be either a restaurant or business that sells apparel, home furnishings or general merchandise to specialized customers. In other words, the city is looking for what Zipper termed "unique" retailers: those with distinctive offerings for the area.
Level two: applicants are scored based on their uniqueness, proven ability to generate foot traffic, potential for job creation and capacity to attract desirable tenants. Here, size does matter; the city would prefer major anchor tenants to bait other retailers. Level three: a retail committee mulls over the application and gives the thumbs up, or down. And then on to step four: mayoral approval.
To be sure, many souls have braved the financing process and triumphed. Trendsetter H&M tapped into the funds for its store on F Street, as did Spanish retailer Zara for its digs next door. More than two-thirds of the program's overall $30 million has been spent. Yet Zipper is eager to see the remainder doled out to help the District maximize its retail potential. Most major cities average 24 square feet of retail space per capita, but the District averages a paltry 8 square feet, according to the planning office.