Monthly Archives: February 2015

Attorney Charges Foul Play on Hine Project Housing Tax Credits

Attorney Charges Foul Play on Hine Project Housing Tax Credits

Asks HUD Inspector General for Investigation

by Larry Janezich

Attorney Oliver Hall has formally requested HUD’s Inspector General investigate the Hine development “to determine whether it complies with requirements for inclusion in the Low income Housing Tax Credit program [LIHTC].”  In December of 2013, DC Housing Finance Agency (DCHFC) voted to grant a 4% tax credit to Stanton-EastBanc under the federal program to compensate developers for the cost of affordable income housing. The tax credit, when traded to Wall Street investors, generates capital that pays for all of the hard and most of the soft expenses involved in constructed affordable units.  Unlike a tax deduction, the tax credit is a dollar for dollar (or more) return to the developer for every dollar invested.  In the case of Hine, this could amount to a federal grant of $6 to $7 million dollars, and is intended to pay for the entire cost of the North Building.

According to Hall, who says he obtained the Stanton-Eastbanc LITHC application under the Freedom of Information Act:  “Based on a review of Stanton-EastBanc’s LIHTC application, however, it appears that the project fails to meet the threshold requirement for low income occupancy, under either the “20-50 Rule” or the “40-60 Rule”  [20% of the units available at 50% of Area Median Income, or 40% of the units at available at 60% Area Median Income].  The result, Hall claims, is that Hine Developer Stanton-Eastbanc is receiving a full subsidy but not providing the required number of units in return.

Let’s see how this plays out.

The Hine project will include a total of 158 residential units, 46 of which are designated “affordable.”  The project is planned to be two separate structures:  the North building with 34 residential units, and the South Building with 124 units.  The developers have designated 29 units in the North Building as “affordable” at 60% Area Median Income (AMI) and thus meeting the “40% at 60%” LIHTC eligibility rule.

The North Building also has five “affordable units” at 30% Area Median Income.

According to Hall, the Hine project, considered as one development—as it was presented to the city, to the community and is subject to the PUD order—does not meet the threshold for eligibility for a federal grant. (See the full text of Hall’s letter in the Library on CHC’s homepage)

According to Hall, DCHFA declared Hine eligible only because it excluded the South Building in its entirety from its calculations. Standing alone, the North Building complies with the 40-60 Rule. “But,” Hall’s letter states “the North Building and South Building are both parts of the same project, to be constructed simultaneously by the same developer on the same lot, and they are subject to the same Zoning Commission order approving them as a single PUD” – a fact acknowledged by Stanton-EastBanc in its LITHC application.

This action, Hall says, “rewards Stanton-EastBanc for what appears to be a deliberate attempt to evade those requirements by segregating the affordable units of its project in a separate building. Further, it invites any other developer to claim that an ineligible project is eligible for housing tax credits simply by dividing it into parts, and designating a single part as a distinct project that meets either the 40-60 Rule or the 20-50 Rule.”  If considered as one project—and, in light of the fact that the developer is paying $0 for the North Parcel because he is allowed to deduct its cost from the amount paid for the South Parcel, it probably should be—the DC government has given valuable land away to a developer without receiving its fair share of affordable housing in return.

Hall says that the awarding of LITHC tax credits to Stanton- EastBanc raises questions about the process by which DCHFA approved this project, suggesting that DCHFA is not exercising adequate oversight over the LIHTC program.

In addition, the letter notes, LITHC Board of Directors Vice Chair, Leila Batties, voted in favor of granting the tax credits, despite an apparent conflict of interest “that should have disqualified her from voting to approve Stanton-EastBanc’s LIHTC application.”  Batties is an attorney with Holland and Knight, who represents EastBanc in its capacity as developer of the West End Library development.  As a partner in Stanton-EastBanc, EastBanc submitted LIHTC applications for both the Hine and West End projects.

CHC contacted EastBanc’s Anthony Lanier for comment, who refuted Hall’s claim that the LIHTC meeting was not properly noticed and stood by the legitimacy of the separating of the project in two parts in order to render it eligible for LIHTC funding.  The full text of Lanier’s response can be seen in the Library on CHC’s home page.

A spokesperson for the DC Housing Finance Agency , when asked to react to Hall’s letter, said, “We believe that the Agency’s decision to approve the Eligibility Resolution for the Hine’s project (North LIHTC) is grounded in sound legal analysis and that the project’s qualifications fits squarely within the requirements of the tax code.  Ms. Leila Batties’ vote on the project was appropriate and permissible within the parameters and requirements set forth in the Agency’s statue and the Board’s Conflict of Interest Resolution.”

Next:  The tangled web of LIHTC financing and DCHFA’s Conflict of Interest Policy

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ANC On Track to Withdraw Support for Swamp Fox Memorial in Marion Park

Marion Park, on E Street, SE, between 4th and 5th Streets, SE.  In the background is the First District MPD Headquarters

Marion Park, on E Street, SE, between 4th and 5th Streets, SE. In the background is the First District MPD Headquarters

ANC On Track to Withdraw Support for Swamp Fox Memorial in Marion Park

by Larry Janezich

Tuesday night, about a dozen neighbors of Marion Park appeared before ANC6B’s Planning and Zoning Committee to continue their protest against locating a proposed memorial to Revolutionary War General Francis Marion in Marion Park.

​B​y the end of the meeting, the ANC appeared ready to withdraw its support for placing the memorial in the park – known as “Turtle Park” by the neighbors.

Last September, when approached by the National Park Service (NPS) to voice a preference for siting of the memorial, ​the ANC voted 4 – 3 with 2 abstentions in favor of locating ​it ​​in Marion Park, though commissioners complained at the time about the N​PS​’s presumptuous process and lack of consultation.  That vote was conveyed to the National Park Service in a letter detailing a list of attached conditions related to consultation with the neighbors of the park.  ​Neighbors at that meeting complained that they had been blindsided, with virtually no notice that the park was being considered as the location of a memorial which they said was not only inappropriate for the park, but which would interfere with the public’s recreational use of it. See previous CHC post here: http://bit.ly/1wzFEQs

As of now, according to NPS’s Glenn DeMarr, who attended Tuesday night’s meeting, the project is on hold – the seven year Congressional authorization is set to expire on May 8, thus not allowing enough time to complete site approval or funding.  The South Carolina sponsor of the memorial has so far garnered only $50,000 of the $1 – ​​$2 million in contributions which must be raised during the authorization period.  According the DeMarr, the South Carolina Congressional delegation has introduced a bill to extend the authorization for an additional three years.  Nothing can happen until the authorization is extended, but sources indicated that passage of the bill is likely.

Neighbors opposed to the project said that last​ September​’s​ ANC vote was being represented as community approval of siting the project in Marion Park, and that the conditions attached to that support were being dis​regarded​.  They said that the first thing that city representatives want to know when opponents seek their aid in opposing the memorial’s siting is “Where does the ANC stand on this​?​” and that as long as the letter is out there it will be cited as ANC support for locating the memorial in Marion Park.

The committee might have recommended rescinding the letter Tuesday night, but former ANC6B Chair and current Vice Chair Brian Flahaven said he was opposed to withdrawing a written recommendation of a previous ANC.  Flahaven said he agreed that the NPS had misconstrued the ANC vote as community support for locating the memorial in Marion Park and hoped that next week the full ANC would find a way to withdraw its support for the memorial without rescinding the letter.

Only seven members of the ten member ANC were present Tuesday night, plus one resident commissioner.  When the vote came on language offered by Commissioner Hoskins rescinding the letter, it failed on a 4 – 4 vote, with Commissioner’s Samolyk, Hoskins, Krepp, and resident commissioner Chris Alexander voting for rescinding.  Commissioners Flahaven, Hagadorn, Burger and Oldenburg opposed.  Commissioners Loots, Chao, and Jayaraman were absent.

A vote on language offered by Hoskins to simply oppose any further action on the Marion Memorial also failed on an identical 4-4 vote.

Given the strength of the opposition among neighbors it seems virtually certain that the ANC will vote to oppose any further action on siting the Marion Memorial in Marion Park.  Whether that will have an impact on the final outcome, or whether the NPS will prevail in its seeming preference for siting the Swamp Fox memorial in Marion Park, thus continuing its long record of riding roughshod over the wishes of DC residents remains to be seen.

DeMarrs had no comment after the meeting other than to reiterate the project is on hold and nothing will happen until Congress reauthorizes it.

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The Week Ahead… Now Rose’s Luxury Wants Sliding Glass Roof – And, Swamp Fox Back on Agenda

The 300 block of 7th Street, SE, soon to by the new home of the Hine  Weekend Flea Markets

The 300 block of 7th Street, SE, soon to by the new home of the Hine Weekend Flea Markets

The Week Ahead… Now Rose’s Luxury Wants Sliding Glass Roof – Also Swamp Fox Back on Agenda

by Larry Janezich

Monday, February 2

CHRS Historic Preservation Committee meets at 6:30pm in Kirby House, 420 10th Street, SE.

Tuesday, February 3

ANC 6B Planning and Zoning Committee meets at 7:00 pm at St. Coletta of Greater Washington.

Among items on the agenda are the following:

639 Pennsylvania Avenue SE, (formerly Remington’s and soon to be 7-11) storefront alterations (ANC6B wants another look at proposed facade alterations)

1401 South Carolina Avenue SE, variance from lot occupancy requirements to allow conversion of church into flat, BZA hearing – March 3, 2015

1023 East Capitol Street SE, (P&C Market) appeal from October 29, 2014, decision by Zoning Administrator, Department of Consumer and Regulatory Affairs, to issue Certificate of Occupancy to allow first-floor retail establishment in R-4 District, BZA hearing – March 17, 2015

Rose’s Luxury, 717 8th Street SE, informational presentation regarding proposed retractable roof for existing roof patio

National Park Service Francis Marion Memorial Project National Environmental Policy Act Environmental Assessment.  Peter May of the National Park Service has been invited to provide an update on the siting of the Swamp Fox Memorial.

Tuesday, February 3

North Lincoln Park Neighborhood Assn. (NLPNA), 7:30 – 8:30 pm. at Maury Elementary School, 13th Street and Constitution Avenue, NE (Note new location)

Wednesday, February 4

Transportation Committee meets at 7:00 pm in Hill Center.

Among items on the agenda are the following:

Petition on widening Water Street, SE, from 18 feet to 24 feet between 11th & M Streets, SE

Virginia Avenue Tunnel Project Draft Construction Protection Plan

Fiscal Year 2015 sidewalk repairs list

Thursday, February 5

ANC6B Alcohol Beverage Committee meets at 7:00pm in Hill Center

Among items on the agenda are the following:

Banana Café & Piano Bar, 500 8th Street SE, modification of Settlement Agreement to permit extended hours on special occasions & New Year’s Eve

The Ugly Mug Dining Saloon, 723 8th Street SE, substantial change request for expansion of second floor & addition of 144 seats, changing total capacity to 242, ABC Board protest hearing – Wednesday, February 25, 2015

Thursday, February 5

Police Service Area (PSA) 107 meeting 7 p.m. SE Library, 403 7th St. SE

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