Mayor Marion Barry's plan to sell 27 parcels of city-owned real estate to raise money to balance the District of Columbia budget this year and next sailed into heavy weather yesterday at a City Council hearing. City finance officials warned that the only alternative is a tax increase.
Council approval is required before the properties can be sold. Even if the council goes along, the proposal may be aborted by the National Capital Planning Commission. The NCPC, whose approval is necessary, already has notified city officials that several of the sites -- including potentially lucrative tracts in Georgetown and on Capitol Hill -- are protected by landmark and historic preservation regulations.
In a city with an annual budget of about $1.5 billion, the $15 million Barry hopes to raise from property sales over two years appears minuscule. Objections to his plan illustrate the fragile nature of the improvised arrangements he has made to keep the budget balanced and avoid further service cutbacks.
Several council members, led by Charlene Drew Jarvis (D-Ward 4), objected that the sale would sacrifice city resources to big-money developers without any gain in low-income housing or other social objectives. Representatives of community and civic groups that have temporary use of some of the properties complained that useful and popular programs would be wiped out.
Barry's plan calls for raising $9.3 million in the current fiscal year and $5.7 million next year by selling the parcels to the highest bidders, whose use of them would be restricted only by zoning. Jarvis said she was amazed at "the most unimaginative proposal to come out of the executive branch." She said the city should "use its leverage with developers" to ensure that the properties would serve such objectives as moderate-income housing or minority jobs, and without that, I will never support this in its current form, no way."
Carroll Harvey, who as director of the Department of General Services is the city government's chief property manager, told her that the law does not permit the city to place any restrictions on how the property would be used. "Then we need to change the law," she retorted.
Council members Nadine Winter (D-Ward 6) and Hilda Mason (Statehood-At-Large) also expressed reservations about the proposed sales. They said they did not object in principle to the disposal of surplus city property, but they did not want simply to turn over the sites to developers and speculators.
Harvey reminded them that the council already had included income from the sales as a revenue source in the 1981 and 1982 budgets. Edward Meyers, deputy director of Finance and Revenue, said that "without these needed revenues, replacement revenues would be necessary."
To raise the same $15 million through taxes, he said, would require a one-year increase in one of the city's major taxes. The sales tax, for example would have to go up from 6 percent to 7 percent, or a 5 percent surcharge would have to be imposed on personal income taxes.
"Obviously," Meyers said, "none of these tax increases are desirable and none are recommended. Moreover, such tax rate increases would likely be harmful to our economic development."
Harvey, Meyers and Lawrence Schumake, director of business and economic development, said the property sales would bring in revenue, relieve the city of maintenance costs, restore the sites to the tax rolls and produce 719 housing units and 532 permanent jobs.
Disposal of some of the most desirable sites could be held up by the NCPC. NCPC executive director Reginal W. Griffith, in a letter to council members, said the Georgetown incinerator tract, at 31st and Water streets NW, includes the site of the Revolutionary-era Suter's Tavern, a favorite watering hole of George Washington, and should not be redeveloped without a "significant archeological excavation."
The old firehouse at 3212 M St. NW, he said, is "one of the oldest and most historically significant landmarks in Georgetown" and any sale contract should "preclude demolition."