Last month, Washington developer Oliver T. Carr stood before a coalition of business leaders supporting the Senate's tax revision bill and announced that the real estate industry did not need any special breaks in the tax code and the bill should pass unamended.
On Monday, Sen. Charles McC. Mathias (R-Md.) proposed an amendment to that tax bill to grant a special real estate break to the Willard Hotel, which Carr's company is rehabilitating.
The amendment -- which exempts the Willard from a 1982 tax crackdown on the use of tax credits for rehabilitating historic buildings -- would be worth approximately $2 million to $3 million during the next 15 years for the developers and investors in the Willard. Carr's company would get about 25 percent of that, according to Carr's tax lawyer, John S. Nolan of Miller & Chevalier.
Carr said he stands by his statement of support for the sweeping tax legislation, and said he had not known of the need for the special tax break when he spoke to the pro-bill group. Numerous other interests are asking for "transition" relief in the legislation, he pointed out.
"We would quickly put aside any request for adjustment if there were not requests for similar matters," Carr said. "I would not support any request that compromised our integrity."
The amendment would exempt the Willard from a 1982 tax change that reduced the value of depreciation deductions that can be taken on buildings rebuilt with the assistance of the 25 percent tax credit. The law exempted property that was rebuilt by Jan. 1 of this year, a deadline the Willard project will miss by more than six months. The amendment would extend the deadline to next Jan. 1, but is written so it would apply only to the Willard.
In introducing the amendment, Mathias said the delay in opening the Willard partly had been due to lengthy permit applications and zoning disputes, which he blamed on the District government and the Pennsylvania Avenue Development Corp. The credit was "the essential element" in putting together financing for the project.
Mathias' press secretary, Ann Pincus, said the senator introduced the Willard amendment in his role as chairman of the Senate subcommittee that oversees District affairs.
Besides, she said, "he likes Oliver Carr and thinks it's a good idea."
The fate of the amendment remains in doubt. Republican senators are under heavy pressure from Senate leaders to drop their amendments so the bill can pass quickly.