How to recompense the Foggy Bottom Association for attracting Trader Joes to DC now they have plans for five stores
Last week, Trader Joe's opened its third store in the city in the Eastern Market district of Capitol Hill ("Capitol Hill Trader Joe's is open," Capitol Hill Corner).
Meanwhile a fourth store is slated to open on Florida Avenue NE in the Union Market district (a concept I opined about in 2009 in testimony to the Zoning Commission, see "Retail planning and the Florida Market") and a fifth TJ's has been announced for Glover Park on Wisconsin Avenue ("JBG Smith lands Trader Joes to anchor Glover Park development," Bisnow). Almost three years ago, the city's second TJs opened on 14th Street NW.
But it all started in the early 2000s when the Foggy Bottom Association made a major incentive payment of over $1 million to the company to open their first DC store in the redeveloped project at the old Columbia Hospital for Women. (Some specifics are discussed in a comment by an FBA leader in the comment on this past blog entry, "Pay an incentive fee and Downtown Los Angeles will get a Trader Joe's.")
Before the payment, TJs argued that DC didn't have the demographics they seek ("Trader Joe's Shopper Insights and Demographics," InfoScout; "Quirky, cult-like, aspirational, affordable: The rise and rise of Trader Joe's," FoodNavigator USA), even though even then the company had plenty of urban locations on the west coast sure but also in east coast cities like Philadelphia.
When I saw the report about the agreement to open a fifth store in DC, I thought, wow, each of those neighborhoods ought to provide a "progress payment" back to the Foggy Bottom Association, in recognition of how that additional incentive agreement and payment--paid by the association NOT the city government's economic development apparatus--led to today's situation where the city will have five TJs stores, instead of zero.
Labels: commercial district revitalization planning, retail planning, supermarkets-groceries, tax incentives and abatements
posted by Richard Layman @ 8:46 AM&Permanent Link
7 Comments:
This is more of a testimony of how important neighborhood associations are in developing neighborhoods. I remember that the Logan Circle neighborhood assoc. did a lot of work to get the Whole Foods to come to 14th & P.
Unless someone wants to bring in lawyers, Foggy Bottom won't get any money back. It's not so much that the other neighborhoods got off scott free it's that TJ believes DC isn't a risk anymore. Before TJ's in Foggy Bottom, were there any million dollar houses for sold that weren't mansions? Remember the city still stunk of Marion 'Mayor for Life' Crack Berry. By the time the 4th TJs rolled around the city had turned around.
yes-- mari (as usual) is correct.
I remember people yelling about corruption at the time. I might have been one. After all, FB was always a pretty decent place after 1995.
But sometimes these incentives work.
Advisory Board deal -- somewhat similar -- and down the street. Not so great in terms of salaries. But the hotel and tourists money the advisory board brings in -- several large meetings a week -- is also very valuable.
I just wish more of the bribe money from developers went to useful projects.
Richard, off topic you might enjoy:
https://www.bloomberg.com/gadfly/articles/2017-10-04/the-china-bike-rental-money-cycle
I was joking about the $.
But yes, very good to remind us of the Logan Circle efforts, which really started off as U Street efforts.
U Street (pre-Main Street) tried to get a Whole Foods, really Fresh Fields, first, but soon into the process, FF realized that P St./Dupont Circle was then a superior opportunity.
So the U Street people saw their efforts dashed and poached by Logan Circle/Dupont Circle.
There was a whole training on this case in the Main Street world. Abdo helped too. Carol Felix was seen as the primary mover.
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/17/AR2010011702214.html
How does an association come up with that kind of money? Did the extort it from other prior development projects?
No. They held an easement restricting development on the Columbia Hospital property. To extinguish the easement, they rec'd a payment.
WRT the things charlie said above about "community benefits" with long term benefit, FBA put the monies into long term improvements. A big chunk was the payment to TJs.
And yes, I wrote a lot in the past about "community benefits agreements" and structuring the process to favor and yield structural, long term improvements.
But I've argued that the city leaves the process pretty open in order to reduce the total outlay by developers.
Of course, these days it's really gotten out of hand in terms of non-structural, non-orderly process kind of approaches.
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will read the article, thanks.
I don't know what you describe is, but certainly not an easement. Some sort of covenant maybe.
yes, an easement. It restricted development. The Hospital got a dense zoning put through and in return they agreed to limit the use to the campus to medical only.
For that easement to be extinguished, FBA accepted a payment.
Read the comment in the previously cited blog entry. The person who wrote it was involved in those negotiations.
.... I didn't know that at the time. A couple years later I mentioned the amount of money provided "for community benefits" as an example to another developer and that developer was familiar with the situation and very clear that the situations were different, that there was an easement on the Foggy Bottom site and it had to be "extinguished" and that's the only reason that the amount of "community benefits" in that case was so high.
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