One of the companies, Howard Theatre Development Group LLC, received nearly $12 million in District funds to redevelop and reopen the theater but was not paying possessory interest taxes, a stand-in for property taxes applied to properties on public land.
The company is a division of Ellis Development Group, a D.C. development firm headed by Roy “Chip” Ellis, president and chief executive.
Ellis said he had worked out a payment plan with the tax office and that the Howard was on firm financial footing.
“We’re working through a plan and we’re hopeful that we can make it such that it is conducive for the city and conducive for us,” Ellis said. “There is nothing to be worried about.”
Beginning in 1910, the Howard was a thriving center of what was once known as D.C.’s Black Broadway, hosting Billie Holiday, Duke Ellington and many other African-American stars of the era. More recently, Ellis led the redevelopment project, and in 2011 his firm announced a $29 million financing package for the work.
After it reopened in 2012, the Howard led a resurgence of the east end of Shaw and U Street, drawing musical acts such as Lauryn Hill and guests including Michelle Obama. The Howard hosted a viewing for go-go legend Chuck Brown after his death in 2012 and Muriel E. Bowser’s celebration on the night she was elected mayor last year.
In response to a query about the unpaid taxes, a spokesman for D.C. Attorney General Karl A. Racine said that a review of the redevelopment that allowed the Howard’s doors to reopen was underway. “The issues regarding the redevelopment of the Howard Theatre have been brought to our attention and our public integrity unit is reviewing materials related to the redevelopment,” spokesman Robert P. Marus said in an email.
The former treasurer of the non-profit’s board, Zemira Jones, said he raised concerns about the financing of the redevelopment.
“As treasurer I discovered discrepancies in paperwork and reported it to the board and investors and requested that they take action. And that did cause reason for concern and if that’s drama then I did my job,” Jones said.
Ellis said he had not heard from Racine’s office. He said Jones resigned from the board following questions about board volunteers who sought work with the theater. Jones, who said he did marketing work for the Howard, denied any wrongdoing.
When another historic D.C. venue, the Lincoln Theater, ran into a financial shortfall, the D.C. government put operations in the hands of I.M.P., the group that owns the 9:30 Club and operates Columbia’s Merriweather Post Pavilion.
Brian Kenner, D.C. Deputy Mayor for Planning and Economic Development, was noncommittal about next steps for the Howard.
“There’s no one who wants the Howard Theatre to succeed more than the District,” Kenner said in an email. “The city has put plenty of resources behind it, and to date, the theater has been a catalyst for growth in that neighborhood. We hope the Howard Theatre continues to serve as one of the District’s premier performance venues and remains an integral part of our creative economy.”
One of the Howard’s private supporters, Eagle Bank, remains confident in the project. The bank provided a $5 million construction loan to support the redevelopment and Matt Leydig, senior vice president, said building a successful theater business takes time and that the tax issue would be resolved.
“I think like with anything they had some bumps in the road, but it feels like they’re beginning to figure it out,” Leydig said. “People might be uneasy and say, ‘Oh no, the Howard Theatre is in trouble.’ But there is a reason why that happened, they worked it out with the District and and they fully intend to pay what they owe.”
Ellis said the attorney general’s interest in the redevelopment was misplaced. “They’re probably going to spend a lot of taxpayer money for no reason,” he said.
Myla Moss, board chair of Howard Theatre Restoration, agreed, suggesting the inquiry is a formality. “They have to take a look-see at what comes across their desk,” she said.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz