D.C. officials say they have paid off $198 million in bonds used to finance infrastructure at the project, including the new sea wall. The city made the final payment June 1 — 15 years before the bonds were set to mature.
The bonds were a form of tax-increment financing, a common economic development tool in which taxes generated by the new development are used to pay off the debt. The increase in property and sales taxes at the Wharf site was pledged to the debt service.
That tax revenue, which the District says totals more than $50 million a year, will now go to the city’s general fund.
The early repayment shows the $3.6 billion project — home to office, retail, multifamily, hotel and entertainment uses — generated more sales tax and a higher increase in property taxes than city officials envisioned. The first phase opened in 2017, with the second phase coming online in 2022.
A true DC success story. And as Mayor Bowser said, “Now, we’re at another moment where we need to invest in DC’s future.”
This is a great read and good explainer on the history of QHTC, provided by our very own Chris Ahn.
The Qualified High Technology Companies program was created in 2000 and has been revised several times. In previous iterations, the program included a five-year exemption from a corporate franchise tax, partial exemption from the personal property tax, exemption from sales and use taxes, capital gains deferrals and new hire credits, according to Ahn.
The program, according to Ahn, helped bring online reviewer Yelp Inc. to D.C. in 2017. It was often paired with the Creative and Open Space Modernization incentive, a tax rebate valued at half a company’s tenant improvement costs up to $5 million.
Bowser’s budget proposal would reduce the capital gains tax rate from 8.5% to 3% for the sale or exchange of investments made in qualifying tech companies to help the District compete with neighboring states. The D.C. Council must approve the changes.
By comparison, Virginia has a capital gains tax rate of 6%, while Maryland’s is 8.25%, but that state provides additional tax credits up to $500,000 for qualifying investments, according to the deputy mayor’s office.
The mayor hopes the QHTC program will attract and retain businesses in need of capital from investors, who, in turn, would score a tax break on the investment, according to the deputy mayor’s office.
“The feedback we’ve gotten from the tech community is that it’s a really attractive reason to stay in D.C.,” Deputy Mayor Nina Albert said in an interview.
Upper Marlboro-based Social Supply has signed a full-building lease for 200 Tingey St. SE, with plans to invest around $2 million to prep the space to host weddings, galas and events tied to Washington Nationals and D.C. United games. The event design and production studio, led by the husband-and-wife team of Jessica Marie and Ryan Ryskamp, hopes to complete the renovations, including adding a roughly 2,000-square-foot mezzanine, in time to open by Jan. 1, if not sooner.
Built in 1919, the structure was marketed as offering up to 22,906 square feet, but much of that was only on paper. As it exists today, there’s a small basement of less than 4,000 square feet and a ground floor with 8,441 square feet, with the potential to add a second and third floor. Transwestern marketed the space’s by-right potential as an auto showroom, retail store or restaurant, with additional use types including a brewery or office approved by variance. The site also includes about 12,000 square feet of outdoor space.
