Not every attempt at crony capitalism succeeds in DC

In DC, some federally owned property has been converted into privately managed commercial income property through long term leases.  These properties generate income for the manager and rental income for the federal government.

While federally owned properties are not normally subject to property tax, DC passed a law which assesses property taxes on buildings used in this fashion.

Today's Post has an article, "Trumps turned down in request for tax relief on Old Post Office Pavilion," about how the city denied the Trump Organization's informal request to get a property tax exemption on the Old Post Office building, which they intend to convert into a hotel.

From the article:

Gray spokesman Pedro Ribeiro said it would be unfair to offer a tax break to the Trumps when they were awarded the project through a competitive bidding process.

“It was never part of the bid proposal that the project would not be subject to the tax,” he said. ...

Federally owned property typically is not subject to local property taxes. In recent years however, District lawmakers — faced with a city filled with un-taxable federal properties — created a possessory interest tax establishing a tax on private entities operating within federal buildings.

The Post mentions Union Station as another property that has tried-unsuccessfully--to get an exemption  from property taxes.

The Post does not mention the Hotel Monaco (pictured right, Wikipedia photo) at 700 F Street NW.  This building is the former main post office for the city, and is owned by the Federal Government.  To the best of my knowledge they do not receive property tax exemptions.

In my previous piece on the Old Post Office issue, "Trump seeks local tax subsidy for conversion of the Old Post Office into a hotel," I mentioned that a recent Wall Street Journal article (Subsidized Hotels: Boon or Boondoggle? Cities Like the Jobs and Taxes Lodging Can Bring. Critics See Oversupply and Unfair Room-Rate Competition) on hotel tax exemptions was seen as a competitive disadvantage for hoteliers paying property taxes in full.

(Surprisingly, the DC government spokesperson quoted in the article used argued a position very much  similar to that from my blog entry.)

Union Station's retail operation is seen as one of the most successful in the city.  Similarly to hoteliers complaining about differential treatment, if the owners of the lease (Ashkenasy Acquisitions, which has purchased similar leaseholds in other cities because they like these types of properties) didn't pay property taxes, this would give them a financial advantage over other commercial property owners leasing out retail space and is unfair.