Some hotels have been built in less time than it took a California company to reach an agreement with the Government Services Administration to convert the Tariff Building to a luxury downtown hotel.
The GSA announced last week that it had reached an agreement with Kimpton Hotel and Restaurant Group Inc. to redevelop the historic Tariff Building, more than 18 months after selecting the San Francisco company as developer for the project.
Doubtless the delay would have lasted even longer if the GSA hadn't offered to sweeten the deal by agreeing to spend $5 million to preserve the building's exterior.
Under terms of the agreement, which has yet to be signed, Kimpton will convert the Tariff Building to a 172-room hotel and lease it from the government for 60 years. Renovating the building will cost an estimated $32 million but Kimpton won't require any further federal or local government subsidies, according to the GSA. That remains to be seen, however.
The GSA prefers not to call its contribution a subsidy. Kimpton nonetheless had indicated at the outset that it would need some type of government subsidy to redevelop the building. Thus it was widely assumed that the developer would ask the District to issue tax-exempt revenue bonds to help finance the project. But the agreement with the GSA apparently obviates the need to seek a subsidy from the District.
Still, GSA officials might have allowed Kimpton to drag out negotiations even longer had it not been for the dogged persistence of local housing activists, who demanded after a while that the government expedite renovation of the Tariff Building or choose another developer.
"It has now been well over 15 months since GSA selected a developer for the Tariff Building," Charles A. Docter, chairman of the Downtown Housing Committee, reminded a GSA official in July. "Nothing has happened and the property remains boarded and stands idle as one of the major impediments to achieving the full potential of the Pennsylvania Quarter neighborhood," Docter said in a letter to GSA's Arthur Turowski, deputy assistant regional administrator for public building services.
Docter again questioned the GSA's "inaction" a month later as he and Terrance Lynch, executive director of the Downtown Cluster of Congregations, stepped up pressure on the agency. They not only insisted that the GSA expedite redevelopment of the Tariff Building but turned up the pressure in a full-blown letter-writing campaign aimed at members of Congress, District officials and the media.
Indeed, Lynch urged D.C. Del. Eleanor Holmes Norton to seek a congressional investigation into the GSA's handling of the Tariff Building's redevelopment. "It might well behoove Congress to review the award of this site to the selected development team, given the interminable delays in redevelopment of the property," Lynch wrote in the letter to Norton in September.
Docter and Lynch even questioned the need for a government subsidy to develop the hotel. It is "inappropriate to provide government subsidies to facilitate hotel development in the downtown area," insisted Docter, a Washington lawyer and leading proponent of more housing downtown.
"Hotels have been built in other parts of the downtown by private capital over the years without special subsidies," Docter pointed out in an exchange of letters with GSA officials.
Several new hotels have in fact either been built in the downtown area during the past two years or are under construction. Among the newer hotels is the Courtyard by Marriott, a former bank building at Ninth and F streets NW, only a block from the Tariff Building. All of those hotels have been or are being built without benefit of a government subsidy.
That in itself raises a question about the GSA's decision to ease the financial load for Kimpton. Hotel developers have demonstrated their confidence in the strength of downtown Washington -- from the East End to Georgetown and from Pennsylvania Avenue NW to Dupont Circle.
Moreover, the renovation of some hotel properties in the District, including the former Riggs Bank at Ninth and F streets, involved adaptive reuse of existing buildings -- precisely the type of redevelopment proposed for the Tariff Building.
From the outset, Lynch and Docter lobbied to have the Tariff Building converted to housing. But having failed to convince the GSA that the building should be renovated for residential use, they then argued that the unexplained delay in developing the site was hurting the District's attempts to revitalize the area around the Tariff Building.
The continued vacancy hurt surrounding businesses and properties, Lynch contended, adding that the District has lost millions of dollars in tax revenue as a result.
At least now Lynch and Docter can take some comfort in the knowledge that their prodding was pivotal in ending the delay.