Council votes on 1333 M Street tax abatement with projected $61M revenue loss

In a recent legislative meeting, the District of Columbia Council discussed a significant tax abatement proposal aimed at facilitating a major development project in Ward 6. The bill, which had already passed its first reading in April, seeks to provide a real property tax abatement for the property located at 1333 M Street Southeast. This abatement would cap taxes at current levels for 15 years, starting in 2029, and is projected to result in a total of $61 million in foregone revenue over its duration.

The proposal has sparked a heated debate among council members. Some, like Chairman Phil Mendelson, expressed concerns about the financial implications of the abatement, arguing that while it may be justified for the initial phase of the project, it is not warranted for the entire development. Mendelson highlighted the substantial revenue loss to the district, which he estimated could reach tens of millions of dollars.

Conversely, supporters of the abatement, including Councilmember McDuffie, emphasized the necessity of the tax relief to ensure the project's viability. They argued that without the abatement, the development—which promises to deliver affordable housing and various public amenities—would likely not proceed. McDuffie pointed out that the project has faced challenges in securing capital and that the abatement is crucial for its success.

The proposed development is expected to include 900 multifamily units and 45,000 square feet of retail space, along with public space improvements such as walking paths and bike trails. Councilmember Allen noted that this site has been a focus for redevelopment efforts for over a decade and has garnered support from the community and local advisory neighborhood commissions.

As the council deliberates, some members, including Councilmember Robert White, expressed a desire for more time to consider the implications of the $61 million figure and its impact on the city’s budget. White raised questions about the net benefit of the project, particularly regarding the number of affordable units it would provide.

The discussion reflects a broader challenge facing the council as it balances the need for affordable housing with fiscal responsibility. As the legislative process continues, council members are urged to establish consistent standards for evaluating tax abatements to ensure equitable treatment across different wards and projects. The outcome of this proposal will be closely watched, as it could set a precedent for future developments in the District.