The Fiscal Year 2020 Budget and the Line Hotel Tax Abatement
Earlier today, the D.C. Council took the second and final vote on authorizing language for next year’s District budget, which includes provisions regarding a $46 million tax abatement for the Line Hotel in Adams Morgan. The Fiscal Year 2020 (FY20) budget will redirect a little more than $1 million from the abatement to the D.C. Housing Authority for the repair of public housing in Ward 1, a move that was certified by the District’s Chief Financial Officer. The rest of the abatement will remain in place, contingent on the Line Hotel meeting all the requirements in its tax abatement law.
In an April 19 letter, the Department of Employment Services (DOES) informed the hotel’s owner, Sydell, that the hotel did not meet two of the seven requirements in the tax abatement law. DOES also sent a letter to the Office of Tax and Revenue (OTR) stating that a “good faith effort” was made by the hotel, and the agency decided upon an alternative compliance to the requirements in the law. D.C. Attorney General Karl Racine later informed DOES that the agency did not have the discretion to diverge from the abatement’s legislated requirements.
In reaction, DOES has said the determination in the April 19 letter was not final, and their audit to evaluate how many District residents were hired by the Line Hotel remains open.
The Budget Support Act approved earlier today keeps the Line Hotel’s abatement—roughly $1 million a year—in place until a final determination of eligibility is reached. Until that final decision is made, today’s budget also directed the abatement’s FY20 funding to the D.C. Housing Authority. The Council chose to have that money benefit Ward 1 residents this year through the repair of public housing and will encourage the Authority to hire Ward 1 residents for the work.
Councilmember Silverman also moved an amendment directing DOES to make public any documents related to the audit numbers cited in the April 19 letter to Sydell, as well as clarify to the Council what will be considered the agency’s final determination of the hotel’s hiring. The amendment was passed unanimously and will be included in next year’s budget.
“I look forward to continuing to work with DOES, the Line Hotel, my Council colleagues, and the administration to ensure that District residents are benefiting from taxpayer investments, and that requirements under District law are being met,” Silverman said.