D.C. Auditor Otis H. Troupe's report on Gallery Place has the familiar look of so many reports in which his office has exposed waste, inefficiency, incompetence and irregularities in government.
Troupe's latest report on the District's handling of a prime city-owned development parcel in downtown Washington is an instructive account of a public policy charade. The auditor "finds it alarming that ... years have passed and no noticeable development has taken place on this tract of land."
Troupe has good reason to be alarmed. The District's Redevelopment Land Agency, which has responsibility for disposing of city-owned land, awarded a business partnership the right to develop the site more than 10 years ago. After holding the right for six years, the partnership informed the RLA that it was unable to obtain the financing it needed to proceed. In the past, the RLA has withdrawn development rights when a developer failed after a reasonable amount of time to obtain financing.
Some developers obviously are alarmed because that hasn't been done in this instance. Taxpayers and city officials should also be alarmed.
After all these years, Gallery Place is but another blot on the sorry history of the RLA. The partnership to which it granted development rights for Gallery Place has built zilch on the site. Zero. Nothing. And that's essentially the amount of tax revenue that this effort has produced for the city.
Even worse, the dilatory RLA failed to set a firm deadline for the partnership to come up with a firm development proposal and failed to renew the process that would allow other developers to bid on the site.
While the lengthy delay in this case has confounded Troupe and others, it is nonetheless fairly typical of the dawdling and chicanery that has marked the history of the RLA -- an agency that outlived its usefulness long ago.
Nearly 20 years have passed since the RLA first tried to dispose of five parcels in the heart of downtown, including Gallery Place, which is bounded by Sixth, Seventh, F and G streets NW. The other sites have since been developed or are in various stages of development. In fact, millions of square feet of commercial space -- office, hotel and retail -- have been built in the old central business district since the RLA offered the five sites for development in 1975. Most, if not all, of the redevelopment in that part of the city occurred in just the past 10 years.
One of the more regrettable aspects of redevelopment in that area, however, is the failure of the RLA and two city administrations to recognize the value of District-owned property as leverage to shape development on those sites. The record is replete with lost opportunities. The District failed miserably in not using public intervention to guide the development process. It could have stipulated, for example, that in return for the right to develop city-owned property downtown, a developer would be required to devote a certain amount of space to retail stores or to housing or to some other use that would benefit the public.
Instead, the RLA has been permitted to proceed with little or no real public policy direction other than one that requires would-be developers of city-owned land to include minorities on their development teams. That, too, has been a charade, governed more by politics than any interest in supporting the development of minority-owned business or in fostering economic development for the benefit of all District residents.
RLA hearings to consider developer proposals seemed on occasions to be little more than contests among major developers to prove who could list the most influential minorities as members of their development teams. Thus, politics has had a greater role than public policy in the agency's deliberations.
Indeed, public policy has had to take a back seat to other considerations in the case of Gallery Place. The District "made several significant concessions to accommodate" the Gallery Place partnership, Troupe pointed out.
In 1975, when a developer failed to come up with the financing he needed to build a $100 million commercial project on what was then city-owned property at 12th and G streets NW, the RLA withdrew the exclusive right he had been given two years earlier to submit a final development proposal.
In the case of Gallery Place, the RLA has been considerably more patient, to say the least. Six years passed before the partnership would even acknowledge that it couldn't come up with the money needed to turn the first shovelful of dirt. Ten years, now going on 11, have passed and the seemingly moribund RLA has yet to twitch a muscle to set a deadline or select another developer for the property.
"We ... believe that the citizens of the District of Columbia should not have to wait 10 years or more before this section of the city is redeveloped," Troupe asserted in his report.
He's absolutely right, but the real issue goes beyond the fact that citizens have had to wait more than a decade. The issue really is the failure of the District government to use its resources wisely, objectively and creatively to stimulate development in a way that would benefit most citizens and not just a few.
Troupe has recommended that the District impose a time limit on negotiations for future development projects "so that developers would not be able to purchase urban renewal properties and 'sit on it' till the time is appropriate to develop."
According to a recent article in The Washington Post, the Gallery Place group has formed a new partnership with Oliver Carr Co., one of metropolitan Washington's biggest developers. Carr's entry represents a "significant change," according to Troupe, who pointed out that the original Gallery Place partnership was chosen by RLA because it was controlled by minorities.
Troupe also noted that the District hasn't met a legal requirement that it hold a public hearing to consider Carr's role. As noted in previously published accounts, RLA officials said a hearing will be held before the Gallery Place development receives final approval.
Presumably Carr's role and the status of the project will be clarified at that hearing. In the meantime, however, there is no getting around the fact that the RLA's handling of the Gallery Place matter, with apparent approval from the District Building, cost the city millions of dollars in carrying charges and lost tax revenue and made a mockery of public policy.