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D.C. Council delays vote on 1333 M Street SE tax abatement after debate over $61 million foregone revenue
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Summary
The Council postponed final action on a 15-year tax abatement for 1333 M Street SE after members raised concerns that the Chief Financial Officer’s analysis estimated $61,000,000 in foregone revenue over the abatement period; proponents said the project requires the abatement to proceed and would provide public benefits and affordable units.
The Council of the District of Columbia on May 6 postponed consideration of a proposed tax abatement for 1333 M Street SE after extended debate over its fiscal impact and community benefits.
Councilmember McDuffie, sponsor of the measure, said the abatement would cap certain property taxes for the development (a 2.9-acre site in the Navy Yard, Ward 6) in excess of $150,000 per year for 15 years beginning in 2029, and that the project would deliver public-space improvements, waterfront amenities and more affordable housing than required by inclusionary zoning. McDuffie emphasized that the project has struggled to secure capital and that the abatement was a necessary inducement for development.
Chair Mendelson and others noted the Chief Financial Officer’s Tax Abatement Financial Analysis (TAFA) showing an estimated $61,000,000 in foregone revenue over the life of the abatement; several councilmembers said that magnitude required more analysis. Councilmember Robert White and others requested more time to understand the net gain in affordable units (after accounting for inclusionary zoning) and the long-term fiscal effects. Councilmember Pinto urged the Council to adopt consistent standards for evaluating abatements during the upcoming budget process.
After discussion, a motion to postpone the matter to the next legislative meeting carried on a roll-call vote (7 yes, 5 no). Several members explicitly asked for additional information and time to review the TAFA and the net affordable-unit calculation before final action.
The Council’s action pauses final approval but leaves open the option for the sponsor and committee to provide additional materials and return the measure at the next legislative meeting.
