Last week, we saw big headlines as the District of Columbia agreed to two economic development deals. One, with Wizards and Mystics owner Monumental Sports & Entertainment, will bring an entertainment complex to Ward 8. The other, with the Advisory Board Company, will see the relocation of the company’s headquarters to Mount Vernon Triangle and create at least 1,000 new jobs.
While the costs to the District were widely reported, the details — and ultimately the long-term benefits — are perhaps the more interesting parts of the deals.
The Ward 8 sports and entertainment complex will finally bring the job-creating investment that has occurred in many other parts of the city to the St. Elizabeth’s site in Congress Heights. This is the fulfillment of a promise made long ago.
Additionally, while news stories have focused on the city’s contribution of approximately $50 million, $27 million is coming from Events D.C., our local tourism bureau, which consistently runs an annual surplus in the tens of millions of dollars from hotel and ticket taxes. The remainder is coming from a dedicated capital fund that the Council approved several years ago to improve and invest specifically in the St. Elizabeth’s site.
These two accounts were created to fund projects just like this, to promote tourism in the District and spread prosperity to Ward 8.
The St. Elizabeth’s deal will create approximately 600 construction jobs and 300 permanent jobs to operate the facility. It will begin the process of development of hotels, restaurants and other mixed-use projects in the heart of Ward 8 and continue to build bridges of engagement across the District.
The agreement with the Advisory Board Company will likewise continue to build a strong, diversified economic base in the District.
The Advisory Board Company is a technology and consulting firm that works primarily in the health care and education sectors. The company regularly hosts events that attract a high number of visitors to the District. Its new headquarters will be well-located, just blocks from the Walter E. Washington Convention Center.
The important details of this agreement are that the company will receive a $6-million property tax abatement each year from 2019 to 2029, if and only if they employ an additional 100 District residents that year. If the company doesn’t add a cumulative 100 new resident workers in a given year, they receive less or even none of the tax abatement.
Because of a provision in our Home Rule Charter, the District receives no income tax from workers who live outside the District. We are the only jurisdiction in the country with such a limitation. This agreement is specifically intended to ensure that the District is reaping benefits from these tax abatements.
Additionally, the office will be the company’s headquarters, meaning business taxes will be paid to the District.
The company has also agreed to a community-benefits package that will require it to partner with the Department of Employment Services or a nonprofit to provide skills-based training to at least 250 District residents. It will participate in the D.C. Summer Youth Employment Program and provide 25,000 hours of volunteer services each year to District nonprofits.
These two agreements, robust public-private partnerships, are designed to create jobs for D.C. residents and strengthen our communities. Beyond increased tax revenues and greater economic opportunity, these economic development plans will help to maintain the District’s position as the most dynamic city in the country.