Silverman Responds to Second Audit Confirming Line Hotel Failed to Meet $46M Tax Abatement Requirements
Earlier this week, the Bowser administration released a second audit of employment at the Line Hotel development project which found the level of D.C. resident hiring did not meet the specified requirements for the project to receive a $46 million tax abatement. The second audit was requested by the hotel’s owner, the Sydell Group, after they disputed data in an initial audit by the Department of Employment Services (DOES) released in April 2019.
The second audit reached the same conclusion as the first: Sydell fell short of the legislated requirements in two of seven categories. All seven categories needed to be met, as outlined in legislation passed into law by the D.C. Council creating the Line Hotel’s abatement.
During the Fiscal Year 2020 budget last spring, the Council voted to delay the tax abatement by one year as DOES conducted a second audit, this time with an outside auditor. The Council also allocated $1 million from the abatement instead for public housing repairs in Ward 1.
“We agreed to give the Line Hotel owners millions of taxpayer dollars in exchange for hiring our District residents, and they didn’t meet the clear expectations outlined in the law," said Councilmember Elissa Silverman (I-At Large). "It’s very disappointing. I’m especially disappointed that targets were missed because we have residents eager to work in these great construction jobs, and the District raised concerns that they might fall short long before construction was completed.”
“They didn’t hold up their end of the bargain,” said Silverman. “Therefore they don’t deserve our subsidy.”
Now that the Bowser administration has released the second audit certified by the Department of Employment Services, the District’s Office of Tax and Revenue issues the final determination that the requirements were not met, making Sydell ineligible for the $46 million abatement.