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D.C. to determine whether Adams Morgan hotel deserves $46M tax break

The Line Hotel received its final occupancy permit last week, clearing the way for an audit of its jobs numbers

Inside the Line Hotel
The Washington Post/Getty Images

D.C. officials will finally decide whether a major hotel project in Adams Morgan has earned $46 million in property-tax relief under the terms of a community-benefits agreement that lawmakers approved eight years ago.

Originally negotiated by neighborhood activists, the agreement requires the developer of the 220-room Line Hotel to hire District residents for most of the construction hours on the project and most of the permanent jobs at the hotel. The agreement—enacted as law—also requires the developer to fund a job training program for residents and provide “community and nonprofit incubator space,” among other provisions.

But for the past two years, the project has been caught in a controversy over whether the developer has been meeting the terms of the deal for the $46 million tax break. Now, with the issuance of a final occupancy permit by the city, officials can begin assessing whether the developer has kept up its end of the bargain. If the city finds the project in compliance with the law, the tax break would be distributed over the next 20 years.

Brianne Nadeau, who represents Adams Morgan as the councilmember for D.C.’s Ward 1, says the Line Hotel notified her late last week that it has received its permanent certificate of occupancy. This means the D.C. Department of Employment Services (DOES) and the D.C. Office of Tax and Revenue (OTR) can audit the hotel project’s job numbers and other performance, according to the councilmember.

“I will be watching the verification process closely,” Nadeau said in a statement on Friday. “District taxpayers demand that we are good stewards of their tax dollars, so I will be using my oversight authority to monitor the agencies as they determine whether the hotel is meeting the requirements of the abatement.”

In June, she raised concerns about the Line Hotel in a letter to Mayor Muriel Bowser’s administration, writing that the hotel had been operating under several temporary occupancy permits since its December opening. Nadeau said she worried that this scenario was “disingenuously...delay[ing] when the hotel must begin complying with the conditions of the tax abatement,” given that the issuance of a permanent occupancy permit was the trigger for the city’s review.

Later that month, Bowser’s office said the administration had given the hotel until Aug. 1 “to address all outstanding issues,” and that it would not receive temporary occupancy permits any longer. The New York-based Sydell Group built the hotel and has said it is confident that it is “in compliance and in good standing with the community.”

During a D.C. Council roundtable on DOES in June, lawmakers reviewed jobs numbers provided by the hotel that showed 51.7 percent of the total construction hours on the project through March 2018 had been filled by D.C. residents. But some public witnesses suggested that “a significant piece of hours included should not be included”—as a local hotel union leader put it—because they did not appear to relate to construction.

In a statement on Monday, OTR said that although it has contacted the hotel’s legal team, “there has been no recent response.” The office said it would start its audit when the hotel got in touch, and it would review employment certifications from DOES.

“OTR will verify compliance of the community and nonprofit incubator space requirements by performing an on-site inspection of the property and review of the site drawings,” added the office.

Curbed DC has also reached out to DOES for details about its audit and will update this post should the agency provide comment.

The hotel is located in the former First Church of Christ, Scientist building at 1770 Euclid St. NW and contains several restaurants.

The LINE DC

1770 Euclid Street Northwest, , DC 20009 Visit Website