You know how you walk around DC and see all of those "Douglas Development" signs in empty retail windows? If you think you're seeing a whole lot of that, and that Douglas must be sitting on a great deal of vacant properties, you're quite right. But it's probably worse than you think.
According to a recent tweet from WCP's Housing Complex reporter Lydia DePillis, 50% of the square footage owned by Douglas is vacant. This amounts to over 5 million square feet of empty space. To make matters worse for the city, Douglas is failing to pay property taxes on much of its vacant portfolio.
This news came up in a discussion at last night's ANC2C meeting, where two new potential Douglas projects were discussed, both in the Mount Vernon Square neighborhood near 6th and New York: a 200 unit apartment building, and a massive 300,000 sf office building with ground level retail. One of the reasons Douglas executive Paull Millstein was before the ANC last night was to request relief on the "blighted" designation of one of their Mount Vernon Square properties, which under the District's blighted property tax rate would cost Douglas $92,000.
According to Millstein, Douglas could incur costs of up to $30,000 to renovate the property to the point where it was no longer blighted, but with redevelopment of the parcel "imminent," he was requesting an exemption altogether. Millstein argued that the lack of development on the site was a result of the ongoing economic turmoil, and thus Douglas shouldn't be faulted for that. The ANC agreed, voting 2 to 1 to support a one year tax relief for the site.
That's fine and dandy, but with 5 million square feet of vacant space spread throughout the city, I would not hold my breath for either of these developments to break ground anytime soon--in spite of assurances from Millstein that they will. And Mount Vernon Square residents will be forced to contend with a blighted property for at least another year, while the District continues to fail to collect on unpaid property taxes from properties among Douglas's holdings.
The wheels on the bus go round and round...