New Documents Show Developer Pressed City to Close on Hine to Avoid Bowser Hearing

New Documents Show Developer Pressed City to Close on Hine to Avoid Bowser Hearing

David Wilmot – Lobbyist and Hine Partner – Pressured Mayor’s Office

by Larry Janezich

A slew of new documents released in response to a Freedom of Information Act request

(FOIA) filed for records related to the transfer of the Hine site from the city to the developer

reveal that the developer for the site, Stanton/Eastbanc (SEB), made a concerted effort to go to closing quickly, in part to avoid appearing before Muriel Bowser’s Committee on Economic Development.

The records also show the difference between the city’s public presentation of its decisions and the private deliberations carried on with the developer.  The documents were produced by the Deputy Mayor for Economic Development (DMPED) only after the General Counsel to the Mayor ordered the office to be more forthcoming in response to the FOIA filed by Oliver Hall, attorney for residents who are appealing the Zoning Commission’s approval of Hine project.

The City Council’s latest extension of the original closing deadline would expire on July 13.  As closing on that date became increasingly questionable and the city was anticipating extending the deadline again, the Hine partners began maneuvering to close by the July 13 date.

On June 12, 2013, Eastbanc’s mostly-silent partner on the Hine and West End projects, David Wilmot, the director of Autopark (as well as lawyer and powerful local lobbyist who Washington City Paper has recently tied to Jeff Thompson, the former city contractor now a target of  a federal corruption investigation in the District http://bit.ly/1egvbiW), weighed in with the Mayor’s office.  In a 5:51am email to Janene Jackson, director of the Mayor’s Office of Policy and Legislative Affairs, Wilmot says, “Yesterday, we met with DM (Deputy Mayor for Planning and Economic Development) Victor Hoskins who indicated that he supports our proposed solutions and needs to confer with the Mayor before providing an answer to our requests.”  He went on to say that an appearance before Bowser’s committee for an extension should be a “last resort, only to be exercised in the event that we are unable to close…Quite frankly, the last place we should want to visit on these projects is the Council.”  (City records show that in January, 2014, Wilmot contributed $2000 to the Gray campaign.)

Janene Jackson responded with an email later that same day at 5:47 pm.  Jackson told Wilmot:  “I must admit, I am concerned that we’re not following the usual process of extension because I think it will blow back negatively on the Mayor but I’ll defer to the DM.”  Wilmot’s reply said, “Let me be clear that the DM supports our position.”

Part of the “solutions” referred to by Wilmost was the proposal to split the Hine closing into two components – the land closing, and the financial closing at a later date.  Although presented to the public as unremarkable, the proposal to split the Hine closing and the rush to closing in order to avoid appearing later before Bowser’s committee for a progress report, appears to have worried the Mayor’s Office.

In a June 17, 2013, Jeff Miller, Director of Real Estate, DMPED, emailed Eastbanc President Anthony Lanier saying “The Deputy Mayor has consulted with Mayor Gray and his advisory team on the alternatives to legislation that you have proposed, specifically bifurcating a closing into a land closing and a subsequent financial closing upon a favorable decision of each appeal.  Such a process, as you have described, would eliminate the risk of taking the project to Council for renewal of the surplus and disposition authority.”

Miller cited five concerns standing in the way of moving to closing: public space encroachment, no financing raised for the development, tenant agreements still under negotiation, the in-flux status of the PUD during litigation, and differences between cost estimates and actual costs.  Miller goes on to say, “Under the weight of this uncertainty the District is reticent about closing ahead of resolution of each of these items, and will abide by the original LDA terms of conditions precedent to close.  We also feel that the risk of Council action unfavorable to this project is slightly less than for that of the West End project.  Toward this end we plan to move forward with extension legislation, which we will introduce to Council by June 26th.”

The same email discusses the city’s reservations regarding Eastbanc’s West End project, which, at the time and as discussed in the same email, was also under litigation.  Yet the city did not enumerate financing as one of the concerns regarding the West End Library.

As the July 13 closing date approached, SEB continued to press for early closing, warning that the Hine project could fall victim to campaign politics.  However, with some of the outstanding issues still unresolved it appeared that it would be necessary to extend the closing date.

On June 28, Anthony Lanier, president of Eastbanc and managing partner of SEB, pressed the city to move to closing quickly and avoid the possibility of going before Bowser’s committee for an extension.  In an email of that date, Lanier expresses his concern for “the voting dynamics of citizen support for Bowser v. support for Hine.”

The concerns regarding the politics of Hine came up again on July 1.  In an email to Lanier on that date, Miller states that he and Hoskins had met with the DMPED internal team and the Office of the Attorney General regarding early closing.  “The internal recommendation was that even if the outstanding business issues are put aside the risk to the city of a closing followed by the PUD remanded to the Zoning Commission is too great.”  He goes on to say “the city is best served by waiting to close until the PUD process has concluded….  The email indicates an about face for Hoskins, saying that the Deputy Mayor supports this and is unwilling to close while the PUD litigation remains outstanding.  It goes on to say ‘We have taken the necessary steps for the extension…. ‘”

Later that day, at 3:07pm, an alarmed Anthony Lanier, responded to Miller’s email with a quick note to say “not good, bordering on disaster.”

At 3:42pm the same day, another Lanier email to Miller, reads in part: “An extension, if it actually succeeds, is a lateral move, transferring future decisions into a volatile political arena fraught with risk.  The Ward Councilmember as well as a political favorite of the opponents are running for Mayor with distinct political goals which are not necessarily symbiotic with yours and ours…in the meantime, the financial commitments we have obtained will be suspended.”  (It is unclear to which financial commitments Lanier refers to here: the West End, or federal affordable housing tax credits for Hine and West End which are routinely purchased by Wall Street banks looking to improve their Community Reinvestment rating).  Lanier requested a meeting “ideally prior to the end of the day” between SEB “and all parties in order to come to the most sensible conclusion.”

In this particular exchange between Lanier and Miller, several of the emails have been blacked out by DMPED, raising the question of whether these emails meet a legal threshold for exclusion, or are merely embarrassing to parties involved.

On July 9, ANC 6B voted unanimously for a one year extension of the closing deadline, citing two issues that in its view made this necessary:  a surveying discrepancy and the appeal to the DC Court of Appeals of the Zoning Commission ruling filed by neighbors, which the developer and the ANC contended has delayed financing for the project.  The letter stated that the city and developers were pursuing an alternate route to the settlement that will allow the development process to continue. Though lack of financing has routinely been connected to the on-going litigation by the developer and the ANC, the city did not relate the two in Miller’s email of June 17, and did not cite financing as a concern with the West End project, which was also under appeal.

On July 10, the City Council extended the deadline for closing by six months.  Mayor Gray had requested a one year extension, but Councilmember Bowser offered an amendment providing for six months (January 13, 2014), and the Council passed it unanimously on a voice vote, with Councilmember Barry recusing himself citing a standard excuse that he may or may not know principals involved in the project (Wilmot has been tied to Barry, and that is one possible explanation for his recusal).

None of the documents obtained under the FOIA indicate what happened in the meeting requested by Lanier, or even if such a meeting occurred.  But if it did, the developer must have been persuasive.  The city closed on the deal and transferred the land to SEB on July 12.