D.C. Mayor Muriel E. Bowser has pitched her plan to create family homeless shelters in almost every ward of the city as an equitable way for the community to share the burden of caring for the neediest residents.
But records show that most of the private properties proposed as shelter sites are owned or at least partly controlled by major donors to the mayor. And experts have calculated that the city leases would increase the assessed value of those properties by as much as 10 times for that small group of landowners and developers.
How much taxpayer money would be paid to a handful of well-connected private landowners, developers and their agents is expected to be a focus of a hearing Thursday before the D.C. Council.
Bowser (D) wants to close the city’s overcrowded mega-shelter at the former D.C. General Hospital and replace it with seven smaller facilities spread across the District.
Her plan calls for spending at least $266 million — and perhaps closer to $300 million — to lease land and buildings over the next three decades, records indicate. Those payments would go to five private corporations, including three tied to political supporters Douglas Jemal, Bryan “Scottie” Irving and Suman Sorg.
The trio, along with their companies and family members, have given a combined $67,000 to Bowser’s mayoral and council campaigns and to a PAC working on her behalf.
That includes more than $22,000 given by Jemal and associates, with $10,000 donated to Bowser’s inaugural party. Irving’s family and company have given over $38,000, including over $15,000 to a political action committee that friends of Bowser created last year but later abandoned. The Sorg family gave the least, at $6,750.
Even in a city with an overheated housing market, the amount the city would pay — mostly for dormitory-style shelter rooms — is eye-popping for anyone familiar with a mortgage.
The District would pay at least $4,500 on average per apartment, per month, each year for at least the next 20 years under Bowser’s plan.
According to one estimate circulating among D.C. Council members, the combined assessed value of all the land the city would lease under Bowser’s plan is roughly $14.5 million. But the market value of those properties would multiply tenfold to about $147 million because of the leases. And when the terms expire,the city would not own most of the facilities it paid to construct.
Rashad Young, the city administrator who helped formulate the shelter plan, said the costs are not out of line with roughly 3 million square feet of space the city now leases, including for office use.
The cost of the leases for the shelters would range from $38 per square foot to $64 per square foot, Young said. Office space recently leased by the city ranges from $47 to $50 per square foot, he said.
The broad range stems from the fact that the administration chose sites suited for families. He also said the buildings would be unique and require costly amenities such as durable surfaces, since families could be moving multiple times per year, and would include cafeterias and play spaces for children.
“There is no facility that is currently constructed that meets the needs of short-term family housing,” he said.
Young pushed back against the notion that any of the sites had been selected to help political allies.
“There is a narrative that is building around motivation, around our motivation, that is grossly unfair because people don’t want these facilities,” Young said. He blamed neighbors who are opposed to sheltersfor trying to upend the plan. “We are not doing popular work here.”
Bowser’s office referred questions to Young. The Sorg family declined to comment, and a spokesman for Jemal said the company intended to respond, but did not before this article was published.
Shortly after the mayor announced her plans, websites and social-media accounts — many of them created anonymously — began popping up with sometimes detailed criticism of the plans.
A group called “We are Responsible D.C.” created dchomelessplan.com, which says the mayor “fails to hold developers accountable for homeless shelter costs.”
Another group created homewarddc.com and said the mayor’s plan put developers before residents.
Several single out Irving, a close ally of Bowser’s mentor, former mayor Adrian Fenty. Irving, who recently traveled with Bowser on her official trip to Cuba, declined repeated requests for comment. He is listed as the registered agent for a limited liability corporation that signed a tentative agreement with the city to create a shelter in Ward 6. The site for 50 units has an assessed value of $2.3 million but could now be worth $43 million because of the agreement with the city, according to the briefing papers under review by the D.C. Council.
In Ward 3, Bowser is proposing to spend $56 million to lease 38 units that would be built on Wisconsin Ave. NW near Observatory Circle. The District would pay an estimated $6,187.26 in monthly rent per unit over 20 years. The average rent for high-end apartments in the ward is $2,973.
Massachusetts Heights resident Malia Brink, 40, volunteers at an existing shelter in her neighborhood but said she and some of her neighbors consider the proposal too large and “egregiously expensive.”
“For that 20 years, this lease costs just over $56 million, for a property that was on sale for $4 million,” Brink said. She suggested reopening the bidding for 90 days to see if there were better deals available. “If by the way this is really the best the District can do, then that will prove it, and you will have answered all of us who are saying it’s too expensive,” she said.
Council member Mary M. Cheh (D-Ward 3) said she is worried about the financial commitment the mayor is proposing.
“The cost is a real concern, and I’m just not sure what to do about it,” Cheh said.
She and 11 other members publicly pledged support for Bowser’s plan before they saw the details. Kenyan R. McDuffie (D-Ward 5) was the only member who did not endorse it.
D.C. Council Chairman Phil Mendelson this week said he would move rapidly and hold a vote on all the proposed leases as a package, as Bowser requested. He said in an interview the vote could come as early as mid-April, in the middle of budget season, when there will be little time for further scrutiny.
Even before the D.C. Council decides the fate of the proposal, Bowser’s plan has benefited at least one player involved in the deals.
Rock Creek Property Group owned a former women’s shelter at 808-810 Fifth Street NW in Ward 2. It purchased the property from Gospel Rescue Ministries for $5.95 million in 2013. It planned to redevelop the site and build more than 50 luxury residential units but did not acquire the needed approvals.
Then the District chose the site for a homeless shelter and signed a 25-year lease worth $43.5 million — the only site for which the District has finalized a lease — requiring some new upgrades but no major construction.
Rock Creek sold it last week for $28.5 million. The buyer, Brian Friedman, sounded almost envious of the deal.
“For the developers that did that, they just scored. They failed with one business plan and pivoted into the next,” Friedman said. Gary Schlager, principal of Rock Creek Property Group, declined to comment.