DC Zoning Shake Down Dance, Part Two

May 10, 2017

UPDATED!

 

TAKE a quick survey of neighborhood projects in the District of Columbia where developers are requesting a zoning variance, particularly a PUD [planned unit development]; the name that appears repeatedly is Chris Otten. The peripatetic community activist has been in NoMa, allegedly representing artists seeking to prevent development of a warehouse where their studios are located, He has been on Rhode Island Ave. NE. at property where the owner has been pushing to increase the number of rental apartments while decreasing those for large families. He has been at McMillan Reservoir, the West End development, and as reported in Part One of this article, in Adams Morgan, fighting a boutique hotel.

Otten and a group of residents, calling themselves the Champlain Street Neighbors Hotel Study Group, filed a lawsuit appealing the decision by the city’s zoning commission approving the construction of the Adams Morgan Church Hotel on Columbia Road NW and Euclid St. NW. Otten and his compatriots effectively squeezed $2 million from the hotel’s developers who said they feared their project would be hijacked and never completed.

 

While the pay-off the Otten group secured came as a “legal” settlement, it was similar to many coerced community benefits agreements (CBA). Too often these negotiated deals, which frequently serve a small cohort of the politically connected and their allies, misdirect development and pollute the zoning process.  

 

Activists and others have asserted that CBAs are a legitimate method for the community or public to gain trade-offs from developers seeking zoning variances, particularly permitting that related to greater density than originally conceived in the city’s comprehensive plan. They also have argued that too often increased density is harmful, changing the character of a neighborhood, increasing traffic, possibly decreasing diversity and hiking property values, which can lead to higher taxes.

 

“There is nothing wrong with development. It’s what type of development they’re looking for,” Otten said during an interview with TBR earlier this year. “My focus is on what the regulators are doing.”

Except that $2 million didn’t come from the regulators’ wallet or government coffers. What’s more the pay-off came after developers already had committed to providing jobs—temporary and permanent to Adams Morgan residents; establishing a community center within the hotel, and providing grants to select nonprofit organizations.

 

     Technically, advisory neighborhood commissions (ANCs), which are located in each of the city’s eight wards, are supposed to take the lead in negotiating so-called community benefits agreements. Advisory neighborhood commissioners are elected officials whose opinions and decisions are supposed to be given great weight by the mayor and DC Council.

 

Many people TBR spoke with for this series, including ANC commissioners, developers, and DC Auditor Kathy Patterson raised a host of questions about such agreements. They also suggested that placing the responsibility within the ANCs can exacerbate the subjectivity and political nature of the negotiated deals.

 

“The question that should be asked: ‘Who is the public and who is the community,’” said Patterson. ”There should be a better way to do this. We should be consistent in our government approach.  I don’t think we have done best practices research. That is something we really should be doing.”

That seems acceptable, albeit small, first step. Executive and legislative branch officials don’t seem prepared to take it, however.

 

Brian Kenner, deputy mayor for planning and economic development, said “if District land or District subsidies” are not part of a development project, he has no interest in micro-benefits featured in CBAs. “I don’t want to be in the business of articulating for the SW Waterfront, for example, what additional benefits should be requested.”

 

Translation: He doesn’t want to get on the wrong side of certain members of the community, which could mean trouble for his boss—the mayor.

 

Actually, there are very few major projects in the city that don’t receive some kind of subsidy— tax abatements, or a government loan, government approved tax credits or revenue bonds.  There are multiple avenues the deputy mayor could use to rescue both developers and residents from the CBA nightmare.

 

The same could be said for the council. Chairman Phil Mendelson told TBR that he has “found some of the community benefits agreements to be written so loosely not to be of much value.” Yet he said he “doubted” there was anything the legislative branch could do. If there is a shake down taking place, he said, that is something the zoning commission should examine.

 

Developers have long screamed uncle. However, they said, they have become so used to being held hostage that they often incorporate the price of a CBA ransom in their budgets. Residents, on the other hand, have come to believe that only by loading down CBAs can get something out of the process.

 

Ellen Oppen-Weiner, a Ward 6 resident and lawyer, who is currently representing one of her neighbors before the zoning commission, said something has to be done. Without deliberate action, including appointing more qualified staffers and board members, things likely will get worse.

 

“We’ve been a small town here for a very long time; now all of a sudden the District’s becoming special. The residents’ interests must be represented,” she continued. She said she is most worried about unscrupulous developers and ANC commissioners. She has filed a complaint with the city’s ethics board against one commissioner who voted to approve a project without disclosing that he had a business relationship with the developer.

 

“I don’t think the ANC is best suited to get the best results,” said Ted Guthrie, the current chairman of ANC 1C, who noted that he wasn’t on the ANC when CBA with the Adams Morgan Hotel was secured.

Guthrie said that the direct beneficiaries of the CBAs often are individuals or groups who have longstanding relationships with certain commissioners. “Who you know makes a difference in what you get.”

 

The deal the ANC IC negotiated seems to underscore Guthrie’s observation: Money was provided for two schools and an arts center, among other groups. The Patricia Sitar Arts Center, while a reputable institution is blocks from the hotel site as is H.D. Cooke Elementary School, said critics of the deal.

 

     In fact, Otten, who has argued that he was not a member of the Champlain Street Neighbors but rather the group’s “representative,” also didn’t live in the immediate vicinity of the hotel. His home was blocks away at 20th and Belmont. NW., according to published reports reviewed by TBR.

 

That raises questions about how the zoning commission establishes standing. Otten frequently has effectively insinuated himself in development deliberations by getting affected citizens to identify him as their representative so that he may testify during public hearings. That gives him greater credibility and influence when he moves to the next development project. 

 

Otten later moved to Champlain St. NW. Asked about the relocation, he told TBR it was not done to improve his odds of collecting a portion of the cash paid by the hotel’s developers.

 

“He’s a charming guy; I think that’s why he has had so much success,” said one former ANC commissioner who spoke on the condition of anonymity. “He can be almost charismatic.”

 

Otten traveled a winding path to the nation’s capital. He said he grew up in Long Island, NY and spent time on Wall Street. He arrived in this region through an assist from Deborah Gist. (Some DC insiders will remember her as the city’s first State Superintendent of Education.) Otten said he and Gist first met in Florida. He said Gist learned of a position in Alexandria and told him he should apply, which he did. 

 

In 2006, he ran for mayor as a Statehood Green Party candidate. Then, according to an article in the washingtonpost.com, Otten listed himself as “founding organizer of the DC Community Action Network.” In a 2016 City Paper article, he referred to himself as “co-facilitator of DC for Reasonable Development,” which he described as a network of residents and groups who work against “modern day colonialism and displacement at the hands of banks, developers and unethical government actors.” This year, he has helped to persuade the Champlain St. Neighbors to dissolve and create the Adams Morgan Forget Me Not Fund, a nonprofit, tax-exempt organization.

 

 “[He] preyed on the worst fears of the community-- particularly the Latino community,” said one of the partners in the hotel development project who requested anonymity because he was not authorized to speak on behalf of the group. “Chris told them ‘The ‘hotel is going to kick you out of your homes.’ “

“Nothing could be farther from the truth,” added the developer.

 

Otten countered:"We were fighting for families who lived right across the street, who live next door to that massive mausoleum.”  He is unapologetic about the group’s cash haul: “If that means we’re extortionists, so be it,” he said. “Frankly $2 million is nothing. It’s pittance, comparatively speaking, to what developers are going to make.”

 

Is that the barometer that should be used: How much cash a developer can or can’t pay to determine whether a project goes forward or whether it actually benefits the public, the community?

 

     Don’t think Otten the only activist in DC negotiating orthodox or unorthodox community benefits agreements. There are dozens of such people jostling with developers. Sometimes, the aspirations of some of those activists result in them fighting their own neighbors, including those who are most vulnerable.

 

Deputy Mayor Kenner isn’t bothered by that, however. “Unfortunately, residents talking at odds against other each other about a development project happens every day,” he told TBR.

 

Are the activists battling just over a development project or are they focused on scoring a crate of personal goodies?

 

Consider the actions of Anthony Muhammad, chairman of Advisory Neighborhood Commission 8E.  His jurisdiction includes St. Elizabeths Hospital and property that private developers and city government agencies are attempting to reshape into a high-end residential, retail and entertainment center.  

Muhammad and several residents, including Sandra Seegars, became involved in negotiating with developers, including Sanford Capital and Geoffrey H. Griffis, a former member of the Board of Zoning Adjustment and a principal with CityPartners. They had proposed a mixed use project near the Congress Heights Metro Station.  At one point, Muhammad, Seegars and others appeared before a DC Council committee hearing, held because there were documented claims that tenants in Sanford apartments were living in deplorable conditions; the company was violating the city’s housing codes, according to reports from the Department of Consumer and Regulatory Affairs. 

 

During that public hearing before the council Muhammad and Seegars lambasted the tenants. TBR was baffled. Why would these civic leaders trash their neighbors? Some reporting led me to the CBA.

Muhammad recently told TBR that he had negotiated a deal with Sanford and CityPartners that he said was valued at $6 million “over 15 or 20 years.” He described CBAs as nothing more than “giving you crumbs from the rich man’s table.”

 

He said when he began negotiating the agreement with Sanford and its partners, he “eliminated as many people from the negotiating process as possible.”  He wanted to deter people who would “run and start this or that little nonprofit. All they know is getting some money.”

 

Not unlike Muhammad, the group of negotiators was mostly the politically connected like Phinis Jones, for example. He was a major contributor to Muriel Bowser’s 2014 mayoral campaign. He also played a key role in LaRuby May’s special election win in 2015 to the DC Council.

 

Seegars said Jones “was working with Malcolm X School.” He also appeared to be angling to acquire ownership of a separately owned vacant building adjacent to Sanford’s property. The value of that building surely would have increased subsequent to completion of the development proposed by Sanford and CityPartners.

 

 “Phil Pannell wanted a scholarship program,” continued Seegars. “I wanted to fund my domestic violence program.”  Seegars said the group had negotiated for tenants on Sanford property to move out and then return to the renovated complex. “The fools didn’t want to move. I was like move the hell out. It’s not your property.”

 

Griffis said he and the development team acted in good faith. According to zoning commission documents, they had agreed to “provide all the current tenants the absolute right to return, within eight months of the issuance of a certificate of occupancy for the residential building in the new project.” The developers also pledged to set aside “affordable residential units;  promote employment opportunities for local residents during construction and with employers within the development; create two paid internships for community members;  provide ANC 8E office space; provide two street level retail spaces for local and/or small businesses; and hold periodic meetings with community members.”

 

Cash grants to favored organizations like those advocated by Seegars and others were additional. Those concessions bought the developers a roving cheerleading squad that spoke on the developers’ behalf before the zoning commission and that assaulted low-income tenants at the council hearing. Before any money could actually be distributed, however, Attorney General Karl Racine took up the tenants cause; he filed a lawsuit against Sanford and asking a court to put the apartment complex in receivership.

 

Disappointed but seemingly undeterred, Muhammad and his community benefits crew turned their attention elsewhere. They became involved with hammering out a multimillion CBA related to the practice facility for the Wizards and Mystics basketball teams being constructed by Events DC, a quasi independent city agency. The “sports and entertainment arena” as it has been called is being built at St. Elizabeth’s Hospital campus not far from the Congress Heights Metro Station.

 

“Monica Ray was lead person telling each committee to name 10 things they wanted,” said Seegars.  Ray, another political operative, worked with Jones. Like him she has been involved in several campaigns including Bowser’s and May’s.

 

“Then at the eleventh hour there were organizations that had not been involved that were suddenly part of the agreement,” continued Seegars. She claimed the changes were instigated by the newly elected council member Trayon White. White defeated May last year to win a full four-year term in the legislature. He did not respond to TBR’s request for comment, although his chief of staff had promised that she would make him available for an interview.

 

Gregory O’Dell, head of Events DC, told TBR that he did provide an opportunity for White to review the community benefits proposals. O’Dell also said he started the CBA process for that project by forming a steering committee, headed by ANC commissioners Mary Cuthbert and Muhammad. Subcommittees were then created. Ray, acting as an outreach coordinator for EventsDC, got residents to create a list of priorities. “We whittled down that wish list to 14 different things,” said O’Dell

 

There are two community benefits deals being developed, explained O’Dell. One package would be funded by Monumental Sports and Entertainment, owners of the Wizards, Mystics and Washington Capitals. It is expected to invest $10 million over 19 years. Events DC has a separate deal it is working on, said O’Dell. “Our benefits agreement will be no where near that. It probably will be funded on an annual basis and probably will come out of our budget.

 

“We’re providing this benefit with no expectation,” continued O’Dell, noting a governing committee will be established to receive the funds to “enforce and ensure” they are spent as originally designated.

 

Events DC should be commended for establishing a tracking system. It’s been difficult to learn the outcome of other benefits packages. For example, neither Kenner nor O’Dell could provide any information about whether the CBA negotiated around the Washington Nationals stadium was fully honored. Walmart agreed to a “community partnership” which involved the payment of $21 million over 10 years. “What has been happening is that Walmart has been self-reporting to us at least up until 2014,” said Kenner. “I don’t know where they are in the process.”

 

If no one is following the money it’s hard to determine who is really benefiting from these Community Benefits Agreements other than the handful of politically connected folks who negotiated them. It’s equally difficult to measure the broad impact of the deal like the one parlayed by Otten and his group.

 

Meanwhile, one thing appears clear: This process appears to be having an adverse affect on developers. Patterson said she spoke with a couple who “refuse to do business” in the District because of things like the CBA. Muhammad said he was involved in a previous attempt to negotiate a Community Benefits Agreement with developers involved in a project on Wheeler Rd. and Barney St. SE. Negotiations with them fell through. “They did not want to give us what we were asking.

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