Hill Center to Open “Within Three Weeks” – Delay Caused by Sale of Tax Credits
by Larry Janezich
Nicky Cymrot, Chair of The Hill Center Foundation, said Thursday night that the long awaited opening of the Hill Center would be “within three weeks.” The opening, originally scheduled for the summer, has been delayed by the sale of tax credits. The Hill Center’s renovation qualifies for receipt of $2 million in tax credits which the Center cannot use since it is operated by a charitable organization. The credits can be sold to investors, however, and according to Board Member Gary Peterson, the process has taken longer than anticipated. He said closing on the sale could take place this coming week. The tax credits must be sold prior to getting a certificate of occupancy, according to Peterson. Since closing the deal will cost approximately half of the total credit, Hill Center anticipates receiving roughly $1 million as the result of the deal. It has long been the opinion of the Board that the Center needed a reserve fund in excess of $1 million before opening. It is not clear how close contributions have brought the Center to that goal.
A tour of the facility revealed that it is ready to receive tenants. There are nine offices for community organizations on the facility’s third floor and of these six have been rented, according to Peterson. The Carriage House where a café/restaurant will be established has been put up for lease to the restaurateurs on 8th Street, SE, and H Street, NE, but has yet to find an investor/operator.
The Center’s annual operating budget is $750,000. There are four revenue streams anticipated by the Hill Center: rental of the Carriage House (about $50,000 annually) to a café vendor and rental of office space (about $62,000 annually) to non-profit organizations together will cover 15 percent ($112,500) of the operating costs. Among the organizations which have contracted for office space in Hill Center are ANC6b and Capitol Hill Village. One anticipated tenant, the Capitol Hill Restoration Society, voted in July to stay in its present location.
Third party program providers who will rent additional space to expand their programming will provide 60 percent of the funding ($450,000). These will include organizations like CHAW and the Folger Library, as well as other independent operators offering classes in the arts and technology, or physical training classes such as yoga. No contracts have been signed yet; that must wait for Hill Center to obtain a certificate of occupancy.
Rental of space for special events will account for the remaining 25 percent ($187,500), about $15,000 a month. A conference room can be rented for half a weekday for $350, but the largest spaces, such as the entire second floor, will cost $1500 for half a weekday and $5000 for a full day and evening on weekends. The garden will rent for $500 for half a weekday and $1250 for a full day on weekends.
From the business plan sketched by Hill Center representatives, it seems clear that to the extent that the Hill Center is not successful in obtaining the desired number of tenants or programming, the organization will have to rely upon special events more, or charge more for its space.
The prospect of late hours, noise, and parking has generated concern among nearby neighbors. Last summer, a group of neighborhood protestants filed a formal protest with the Alcohol Beverage Control Board (ABRA), opposing the Center’s application for a liquor license.
Last Wednesday, those protesting the Center’s application for a liquor license withdrew their protest. According to one neighborhood representative, “The main reason for our withdrawal was that our motions were rejected by the board, making it impossible for us to proceed. [other reasons were] that it became obvious at the mediation meeting that the board was extremely hostile to our protest and that the Hill Center was totally unwilling to budge.” The group is exploring other options to lessen adverse effects of the Center’s operation on the neighborhood.