A recent Washington Post poll showing D.C. Council member John Ray as the front-runner in the race for mayor among Democratic candidates is instructive for what it reveals, not only about voters' ambivalence, but about their feelings toward the District's real estate industry.
Even though 33 percent of the Democrats interviewed in the poll said they prefer Ray, compared with only 17 percent for D.C. Council member Charlene Drew Jarvis who placed second in the survey, most of them said they are concerned about huge contributions from the real estate industry to Ray's campaign. Developers and others associated with the real estate industry have contributed more than $600,000 to Ray's campaign, prompting sharp criticism by Ray's opponents, primarily D.C. Del. Walter E. Fauntroy, also a Democratic candidate for mayor.
The implications conveyed in the criticism of Ray for accepting the largess of the real estate industry are unmistakably clear: Through its heavy financial support, the real estate industry hopes to be in position to exert a major influence on a Ray administration.
Voters apparently share that concern. Results of The Post poll show that most voters are concerned that the local real estate industry has already exerted too much influence on the campaign leading to the Sept. 11 primary.
That is as much a disturbing commentary on the District's business community as it is a criticism of Ray and his financial backers. It further raises important questions about the city's private sector.
Why, for example, haven't other industry groups taken as much interest, publicly at least, in the outcome of the mayoral race as the real estate sector? The answer perhaps lies in the fact that few major business groups in the District are controlled by purely local interests. What's more, no other major business sector has played a more dominant role in the District's economy and government affairs in recent years.
Commercial real estate construction has emerged, albeit by default, as the primary source of economic development in the District. It is the only constant in an economy that has been radically reshaped over the past two decades by acquisitions, mergers, flight to the suburbs and management from remote corporate headquarters.
Just over a decade ago, there were nearly 20 savings and loan associations in the District and almost as many commercial banks -- all controlled by local interests. A decade-long shakeout in the troubled thrift industry has reduced the number of S&Ls in the District to just five. In addition, all but one of the leading banks in the District are controlled by bank companies with headquarters in Maryland and Virginia. Thus, the nonbanking interests of key decision makers for the District's leading financial institutions lie elsewhere.
The same is true of the retail sector. Leading retail firms that once were owned by local families or local investors are now the properties of corporations and individuals in remote locations such as Troy, Mich., Chicago and St. Louis. The arrivals in recent years of retail giants like New York's Macy's and Seattle's Nordstrom's capped the dominance of outside ownership.
It used to be said that the District's private sector consisted primarily of the three A's: attorneys, accountants and trade and professional associations. That's as true today as it was 15 years ago, perhaps even more so. Indeed, the three A's today account for most of the demand for office space in the District, which has the lowest vacancy rate among area jurisdictions.
The strong presence of local law firms notwithstanding, however, the interests and policies of the three A's are decidedly national in scope.
Even with tremendous growth in the services sector during the decade of the '80s, the District still lacks a strong locally based private sector. Except for the public utilities and a few others, the District has no corporate sector with roots in the city. Corporations pay rent in the city and their executives worry about traffic and the quality of life in the suburbs. The District has no Mobil Corp. Neither is there a Martin Marietta Corp., Marriott Corp., Giant Food Inc. or a significant high-technology industry in the city. Even Woodward & Lothrop and Hecht's have moved their corporate offices to the suburbs. Most of the printing industry moved there long ago.
Legal, health, management and computer services companies and those that provide personal services continue to generate the bulk of new jobs in the District, although at a slower rate than a year ago. What's left besides government, transportation and public utilities as major employers?
No wonder the real estate industry has been able to flex its financial muscle unchallenged in District politics. No other industry in the District is as concentrated or has the kind of vested interest as does the real estate industry in the continuing development of downtown Washington. It has been able to exert its influence in a vacuum created by the absence of any other major industry or substantial numbers of companies with strong ties to the District and more than passing interest in its economic, political and social well-being.
The Greater Washington Board of Trade, to be sure, still plays an important role in District affairs, even though it became a regional chamber of commerce some time ago. The Board of Trade's political action committee, careful not to show any sign of political partisanship or endorsement of an individual, recently voted to contribute $500 each to the five Democratic candidates and Maurice Turner, the only Republican running for mayor.
It's unrealistic to expect that all elements of the private sector will be as even-handed in making contributions to political campaigns. District voters can, however, demand that the next mayor not only stand up to special interest groups but that he or she make the city a more attractive place to do business -- all types.