Another thing to be concerned about in terms of developer subsidies

An early morning waking follow on thought to my reaction to this article from the Washington Business Journal, "D.C. Council votes to expand tax relief for small biz," which mentions a $7 million subsidy for parking (!!!!!) for the Constitution Square development at 1st and M Streets NE.

Subsidies, if proffered, should be designed to maximize the value of extant private investment, already developed areas, reduce automobile load, increase transit use, and leverage previous government investment.

Ironically, by subsidizing a supermarket at 1st and M Streets NE, on a development site with as much as 2 million s.f. of developable area, the City has made it that much more difficult for Steuart Investment to attract a grocery store to the 300 block of H Street NE. (In fact Harris-Teeter played Steuart Investment off the Stonebridge group to get the best deal.)

Now, DC has spent more than $100 million already on H Street, between HUD funded projects out of the urban renewal plan (including Hechinger Mall and the bridge over the railyard) and almost 20 years of rent payment to the H Street CDC for offices on the 600 block for DOES and the Dept. of Human Services. Plus there is the $30 million streetscape improvement about to break ground and a minimum $30 to $60 million investment in streetcars (which won't only travel on H Street, but on Benning Road and eventually to Georgetown via K Street).

The difficulty of landing a supermarket to a development is that these stores demand and receive below market rates for rent, with the justification that a supermarket is an anchor, attracting thousands of customers to a commercial district, customers who patronize other stores, not just the supermarket*.
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* Note that Safeway's practice of closing neighborhood stores in favor of larger "regional" supermarkets on Kentucky Avenue SE, at 4th and Rhode Island NE, at Hechinger Mall NE, and in other locations helped to destroy many neighborhood commercial districts for many decades including Brookland (two stores closed) and H Street NE (two stores closed).

By locating the stores some distance away, customers were forced to drive rather than to walk, and the primary reason for patronizing local commercial districts frequently and on foot--buying food to eat at home--was elminated.
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A developer gives the sweetheart lease rate, and in turn charges more money for the other space, especially to other tenants attracted to the proximity of amenities such as supermarket. It's a lot easier to do this over a development with over 2 million s.f. to spread out the increase over the average, than it is to do within a single building.

This is what makes landing highly attractive retail tenants so difficult, and is a justification, generally, for incentives, as overall improvement in a commercial district spread out over a variety of tenants and property owners will yield higher property and sales tax revenues in the long run.

But DC needs to have a policy promoting investment in extant places, not the equivalent of greenfield development. By continuing to encourage new development in new places, the economic value of agglomeration is reduced, transportation efficiency is reduced, and the cost to the city to develop and support new infrastructure is higher.

Note that I missed an article on a $23 million subsidy for the development at the Howard Theater, for Radio One. See "D.C. Council OKs $23M for Radio One HQ," from the Business Journal. Arguably, you can make the case that this is a positive investment, reviving a property that has been vacant for decades. In any case I think it is possible to set priorities for incentives along these lines:

1. Investments in extant commercial districts, to strengthen the district and its competitiveness
2. Investments to reverse significant decline/disinvestment in historic properties and sites
3. Investments to support transit oriented -- not parking oriented -- development, to leverage billions already invested in the subway and bus transit system
4. Investments in commercial districts where DC Government has already invested millions

Seattle subtitled one of their reports (cited below) a "Coordinated Transportation Investment Plan."

DC needs coordinated land use and transportation investment plans too!

I hate to "promulgate" overarching rules, but one such rule ought to be no parking subsidies for developments within a 2 to 3 block radius of transit stations.

And this should mean that proposals to utilize city land to do something, when it doesn't meet the priorities as set above, should be rejected, i.e., a hotel at Irving Street and Michigan Avenue NE rather than located on or adjacent to the Brookland Metro station.

Note that in Seattle, they recently changed their zoning requirements to eliminate parking requirements in the areas around transit stations (I don't know the exact distance) to promote transit ridership and to maximize the billions invested in light rail. See Transit Service, Transportation Demand Management, and Parking Program Improvement Concepts, a report from Seattle about the changes coming in a particular development area as a result of light rail service, and how to respond.

OH AND I FORGOT ABOUT THIS, how about instead of subsidizing parking at grocery stores, requiring transportation demand management planning, including the provision of delivery service of groceries by the supermarket.