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Line Hotel ~ continued from July 2018 issue pdf page 1

As The InTowner reported in January, while many Ward 1 residents are happy with the new hotel and the activity it has brought to their neighborhood, many others believe Sydell has been getting a pass on promises it made to the neighborhood and the city — particularly in terms of hiring. They are afraid that a lucrative tax abatement will be given to rich developers who don’t need or deserve the money.

 Sydell Group, in statements issued to The InTowner and other publications, has long insisted that the Line Hotel DC is in compliance with all points of the agreement, including hiring quotas for DC and Ward 1 residents. The company has never provided proof that it has met the stipulated, agreed upon quotas.

Young responded to Nadeau, saying, “DOES is actively monitoring the project’s status and compliance with the abatement requirements and will report the findings to the DC Office of Tax & Revenue (OTR) once the construction and operation phases are completed.” He said the hiring statistics in particular would be substantiated via an independent audit.

However, city officials have also told The InTowner that it is not clear when or how often audits of the agreement are to be conducted over its 20-year lifetime, nor what consequences would apply if Sydell Group fails to comply at any point along the way.

The city is supposed to be keeping records of the Line Hotel’s employment of DC and Ward 1 residents on the basis of Sydell’s self-reporting to the DOES First Source Register. Further, Sydell has been required to file with DOES payroll and other information about its employees on a monthly basis since the start of construction.

Sydell’s tax abatement agreement with the city demands many contributions to the Ward 1 neighborhood beyond hiring. For example, a job training program and 4,000-square-foot community and nonprofit incubator space are also stipulated. The latter amenity was featured prominently in the hotel’s publicity campaign at the time of its opening in January. Community activists have questioned whether the space allotted in the hotel for these programs actually meets the terms of the agreement.

The InTowner requested Sydell’s First Source reports from DOES in January, but has never received the information, nor, after repeated requests, received any response or explanation as to why the department will not release the reports.

OTR officials contend that an independent audit of the hotel’s compliance with the agreement will be triggered once the owners file an application to receive the tax abatement. The abatement itself is to begin in the tax year following the tax year in which the hotel receives a certificate of occupancy.

And that certificate of occupancy is another big bone of contention for Nadeau and Line Hotel critics. She has written to City Administrator Young that she has “recently been made aware of the fact that the Line Hotel has been operating under at least 9 consecutive Temporary Certificates of Occupancy after its opening…. I am concerned the procurement of Temporary Certificates of Occupancy is an attempt to disingenuously extend the construction period for one purpose: to delay when the hotel must begin complying with the conditions of the tax abatement and still receive the abatement in full.”

From virtually any perspective, she continued, “It appears the hotel is fully occupied and functional.”

A spokesperson for Nadeau says, “The official construction phase does not end until a permanent certificate of occupancy is granted, so the councilmember is asking if it’s possible that, by getting temporary certificates, the hotel is trying to count this period as ‘construction’ while it has actually been in operation for many months.”

A key part of the tax abatement agreement requirements are job creation goals, the spokesperson says, adding that Nadeau’s oversight is “motivated in part by the fact that good paying construction jobs for local residents will help put Ward 1 residents who need jobs back to work.”

Nadeau closes her letter to Young, writing, “I am hopeful that the Line Hotel is complying or will comply with the requirements of the tax abatement, however, this money could be spent in many other ways to help District residents.”

A total of 12 temporary certificates of occupancy have been issued to Line DC over the life of the project. Sydell Group must apply for a final certificate of occupancy on or before July 31. Its last temporary certificate of occupancy expires Aug. 1.

Copyright © 2018 InTowner Publishing Corp. & William G. Schulz. All rights reserved. Reproduction in whole or in part without permission is prohibited, except as provided by 17 U.S.C. §§ 107 & 108 (“fair use”).