The Hine Project: Part 1 – How It Happened
DMPED, Stanton/Eastbanc, Local Politics, and Tommy Wells
Editorial by Larry Janezich
The Hine Project has been a case study of how the city moves its development agenda forward,
attempting to provide tax revenues and jobs by granting developers favorable terms while paying lip service to the citizens and residents adversely affected by development. In some ways, it is a study in the failure of the political process.
From the beginning the city-developer public-private partnership on the Hine process has been characterized by manipulation, dissembling, conflict of interest, and a cozy relationship between city officials and Stanton East Banc (SEB).
- The city’s Request for Proposals (RFP) from developers, including the priorities it articulated, served as poor guide to deduce what Deputy Mayor’s office for Economic Development (DMPED) ultimately wanted from the project;
- Stanton Development launched a letter-to-DMPED writing campaign among family, friends, and clients to manufacture the appearance of a community consensus supporting the Stanton East Banc proposal, and DMPED counted this effort as legitimate support, going so far as to cite it as one reason for SEB’s selection (see here: http://bit.ly/1AjyLBE);
- Early in the selection process – at various points – the Stanton East Banc proposal included as prospective components of the project: the Shakespeare Theater, a boutique hotel, a charter school and a large non-profit – all of which ultimately fell away;
- CHRS, disposed to favor the familiar and local SEB (Stanton Development’s Kitty Kaupp is a substantial financial supporter of CHRS), gave SEB its perfunctory endorsement based upon the recommendation of five CHRS board members selected by and including former CHRS President Dick Wolf. The group held one meeting, in private, and the first and primary justification of their recommendation in favor of SEB as stated in the subcommittee report was: “We all know Amy Weinstein will listen to the community and will have a superb design. We should be most comfortable with this team and be able to negotiate with it in the future.” The CHRS Board accepted the recommendation and agreed to it without debate or discussion, and that recommendation was then represented to and construed by the city as speaking for hundreds of CHRS members [editor’s note: I resigned as editor of the CHRS newsletter over this failure in process];
- East Banc brought in former City Council Committee staffer Joe Sternlieb and former member of the Board of Directors of the District of Columbia’s Housing Finance Agency Buwa Binitie (who was made a partner in the Hine project) to steer the project through the bureaucratic process and Low Income Housing Tax Credit process respectively, illustrating the “revolving door” which characterizes and undermines so much in city governance;
- Overlapping membership in local civic and business organizations, including CHRS, EMCAC, Capitol Hill BID, BRMS, and The Capitol Hill Foundation provided a strong coalition of special interest groups which supported SEB, giving the appearance of broad neighborhood endorsement without corresponding substantial grassroots support;
- EMCAC justified their support of the Stanton East Banc proposal by citing the promise of parking for Eastern Market and space for the flea market (both of which ended up much less than originally proposed);
- DMPED endorsed Stanton East Banc as the developer;
- Subsequent negotiations between DMPED and SEB led to a Council Term Sheet and Land Disposition and Development Agreement (LDDA) that favored the developer, providing for a ground lease at bargain basement prices and community benefits paid for by the taxpayer rather than the developer;
- DMPED subsequently arranged a transfer of part of the Hine property as an outright sale – also at bargain basement prices. This north parcel, it was suggested, would be for the construction of townhouses which would allow Stanton East Banc to sell the townhouses outright, an advantage to them in seeking financing;
- Councilmember Tommy Wells responded to requests for his intervention prior to City Council disposition of the Hine site that the place to challenge height and mass issues would be during the Zoning Commission’ Public Unit Development (PUD) process;
- The Greater Greater Washington crowd, waving the flags of “new urbanism” and promoting a “livable, walkable city” with greater density near transportation hubs fell into line, and began their hectoring campaign in support of Councilmember Tommy Wells and SEB, promoting greater density near Metro as desirable without acknowledging that Capitol Hill is, as Ken Jarboe wrote in a comment on a February 29, 2012, CHC post, that the Comprehensive Plan notes the “Hill is already one of the densest areas in the District of Columbia.”
- The City Council rushed approval of the deal through in the final days before the August 2010 recess – with then-Chair Kwame Brown saying that the CHRS endorsement was a deciding factor for him, citing the endorsement of the full 1,000 strong CHRS membership;
- HPRB – openly deferential to Stanton East Banc architect Amy Weinstein (a former HPRB Board Member) – approved the massing, height and design dismissing the objections raised by ANC6b in public hearings and despite serious reservations expressed by a new HPRB board member – respected architect Graham Davidson – who called for taking a floor off the project and a redesign of the Pennsylvania Avenue façade;
- When prodded again by residents to intervene on behalf of the community in the case of Hine, at a meeting of over 200 residents and one of the largest community meetings in recent memory on Capitol Hill, Councilmember Wells turned over responsibility for negotiating details of the Public Unit Development (PUD) on height, mass, benefits and amenities on the project to ANC6b, saying he would endorse whatever they approved;
- Stanton Development again launched a letter writing campaign on behalf of the project when the plans went before the Zoning Commission in 2012, with most of the letters of support for the project coming from those who had some business relationship with the developer (see here http://bit.ly/1nW4SyP);
- The Office of Planning assured interested civic organizations during meetings to explain the PUD process that hiring counsel was unnecessary to successfully press their interests;
- On June 13, 2012, a divided ANC6b endorsed the Hine Project’s PUD agreement by a vote of 6-4, with Commissioners Brian Pate and Ivan Frishberg – the two ANC6b Commissioners who represented the Commission before city agencies and who negotiated the final design and public benefits package on behalf of ANC6b – supporting the project;
- CHRS gave up the fight to improve the project early on. Despite having spent $20,000 to fight the addition of a comparatively trivial third story to the Heritage Foundation building at 227 Pennsylvania Avenue, SE – (spearheaded by then CHRS Historic Preservation Committee Chair Nancy Metzger, now a board member of HPRB) – CHRS didn’t spend a dime to improve the design of the Hine project or even ask for party status before the Zoning Commission despite registering strong reservations and insisting on design changes for the project when testifying before the Zoning Commission;
- The Zoning Commission approved the Hine PUD process after a public review which was remarkable to this observer for revealing commissioners who were ill prepared, ill informed, and ready to defer to the judgment of other city agencies;
- Super-lobbyist, Hine partner, and Jeffrey Thompson-associate David Wilmot pressured the Mayor’s office to close quickly with SEB on the Hine project, despite reservations from the Mayor’s office regarding departure from routine procedure;
- The Hine deal was closed and the land transferred to SEB on July 12, 2013, after DMPED agreed to separate the land closing from the financial closing, and delay the latter until financing could be obtained;
- On June 28, 2013, the Hine Coalition, a group of Capitol Hill residents appealed the Zoning Commission’s approval of SEB’s plan for the Hine project to the DC Court of Appeals, on the basis of incompatible scale and density and as being inconsistent with the DC Comprehensive Plan – which states that mixed use buildings in areas such as the Hine site “generally do not exceed five stories in height”. The group’s attorney, Oliver Hall, attempted to require DMPED to fully comply with the Freedom of Information Act regarding documents related to the Hine project. Such documents as were finally made available by DMPED at the order of the Mayor’s office revealed the extent to which political pressure was brought to bear on DMPED to expedite the closing process to avoid the necessity of the City Council extending (again) the closing deadline;
- On August 14, 2014, the DC Court of Appeals affirmed the decision of the Zoning Commission. The decision seems to legitimize the Zoning Commission’s decision to defer to other city agencies, minimize careless inconsistencies in the Zoning Commission’s report, and reaffirm the court’s practice of not considering questions which have been raised for the first time in the appeal.
One question which the decision seems to open up is whether developer can convert the affordable housing in the project’s North Building to market value housing after 40 years – assuming the project lasts that long. The developer’s plans anticipate exemption from some of the restrictions in Inclusionary Zoning (affordable housing) Program, but the court decision seems to indicate that the exemption is contingent on the affordable housing being maintained for as long as the project exists. Finally, the decision endorses the ZC’s contention that the ZC has no responsibility to rule on whether the project is a good deal for the city.
City agencies define the city as “city government” – which in the District appears to mean the elected officials and the financial interests that make it possible for them to get elected. To the bureaucracy, the city does not mean the communities, neighborhoods, and residents of which the city is comprised.
When astro-turfing replaces grassroots and when the voices of residents who invested here before it was fashionable are dismissed by city officials and lost in the chorus of those calling for greater density, more economic development, and greater opportunities for high end consumption, disequilibrium is the inevitable result. And when progress is defined in these terms, it comes at the expense of community values, its integrity and connectedness, and the sense of place that too many of us have taken for granted.
Next: Part 2 – The Hine Project: What We Lost – DC as A Developer’s City