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|Executive Summary||A Report of the Committee of 100 on the Federal
September 18, 1997
This is the text of the Committee of 100's report. The printed report also includes architectural renderings, tables, and appendices that are not included here. The printed report is available from the Committee of 100 on the Federal City, P.O. Box 57106, Washington, DC 20037.
Something is wrong with the finances of the proposed convention center at Mt. Vernon Square. The project was supposed to cost $450 million. Then it was $550 million, according to the Environmental Impact Statement. Now the Washington Convention Center Authority says the cost will be $650 million, not counting a marshaling yard or the value of the land.
When Orlando completes its latest expansion to 1.1 million feet of exhibit space in 1998, its convention center -- with 50 percent more exhibition space than D.C. -- will still cost $591 million -- way under D.C.'s budget. (Appendix A)
What's wrong with this picture?
The Mt. Vernon Square site is causing costs to spiral upward, while candor about the project's finances continues to decline. Federal and local officials, advocacy groups, and many citizens have asked the Washington Convention Center Authority to be honest about the numbers, to explain the cost escalation, and to further explain why the WCCA's first alternative, the Union Station site, was never seriously analyzed from a cost-benefit point of view. As a federal panel recently wrote, "the [Union Station] site would be far less costly, would eliminate problems associated with managing truck and tour bus traffic in an historic residential neighborhood and the need for an off-site marshaling yard, and would include significant opportunities for future expansion not available on the Mount Vernon site." (Appendix D)
Maybe the Mt. Vernon Square proposal would not look good under a bright light, compared to Union Station. Or maybe it would. The Washington Convention Center Authority doesn't want to know. And doesn't want taxpayers to know. This should make financial authorities demand to know.
In this report, the Committee of 100 on the Federal City offers the first substantive, public look at the costs of the Mt. Vernon proposal, including contributed land values not previously discussed in cost estimates by the Washington Convention Center Authority. The report examines why projected costs have skyrocketed, and why the Mt. Vernon Square convention center would be obsolete several years after its opening day. The Committee estimates that the actual cost of the Mt. Vernon convention center would be at least $740 million, not including the most recent reports of further escalations. The report estimates that construction, land and other costs of a convention center at Mt. Vernon Square are $270 million greater than the same costs at the Union Station site -estimated at about $465 million.
This premium cost of $270 million, extra debt, would take about 20 years of the center's total annual tax revenues of $13 million to retire, as estimated by the Environmental Impact Statement.
This report also includes a proposal for a residential/commercial development at Mt. Vernon Square called "Straw Village," a development in keeping with the zoning of surrounding neighborhoods. Revenue estimates associated with such a development are also included.
The findings of this report are based on estimates by industry analysts as well as on current D.C. tax formulas. The findings are limited, due to the almost total lack of information made available by the Washington Convention Center Authority on these critical matters. The Committee of 100 on the Federal City urges relevant authorities not to rely only on the findings of this report, but to commission a full, independent study comparing the costs and benefits of the Mt. Vernon and Union Station sites before final action is taken toward building a new convention center in the District of Columbia.
City officials are set to make the same mistake at Mt. Vernon Square that they made with the old convention center in 1983: there is no room to expand. When the old convention center was built 14 years ago, it was the 6th largest in the nation. The proposed Mt. Vernon center, the Washington Convention Center Authority estimates, would also be 6th largest when opened, but it also has no room to expand.
At the same time, other cities are planning much larger convention centers. Industry analysts expect attendance at trade conventions to increase at five percent per year for the next two to three decades. First tier convention cities are now expanding to over 1 million square feet of exhibition space and leaving room to double and triple that number -- all on one floor.
San Diego will have 554,000 square feet of exhibition space by 1998, with approval to build another 625,000 -- all on one floor.
But the site for the proposed Mt. Vernon convention center -- at the heart of the historic Shaw residential neighborhood -- is too small to allow for any further exhibition space expansion. It is landlocked underground. This is not smart planning.
The largest building ever proposed for Washington, D.C. -- the convention center -- doesn't work on the Mt. Vernon site for other reasons as well:
Meanwhile, construction costs of the Mt. Vernon plan continue to spiral upward. The project was supposed to cost $450 million. The EIS stated the cost had increased to $550 million (EIS 1-15). WCCA now says the cost will be $650 million; and that's without counting the marshaling yard. It also does not count the value of contributed land.
The reason, primarily, is the excavation and expensive construction needed to shoehorn the oversized-building into an undersized site. The Washington Convention Center Authority says at least 80,000 dump truck loads of dirt must be dug up and carried away before the construction of the actual building can take place. WCCA plans to build a 1000-foot tunnel under 9th Street for trailer trucks, with truck ramping from the bottom to the top of the building. These are the elements that are driving Mt. Vernon's costs skyward. WCCA has not released an itemized version of the $650 million budget, despite repeated requests.
But the real costs of the Mt. Vernon proposal are even higher. Unlike municipal authorities in other cities, WCCA has not included the value of the land at Mt. Vernon Square in its cost estimates. At Mt. Vernon, properties necessary for construction of the proposed center include 5 and 1/2 squares and rights-of-way totaling 17.1 acres of land area. The site carries an assessment of approximately $90 million dollars. That brings the real cost of the Mt. Vernon proposal to about $740 million without the marshaling yard. (Appendix B)
WCCA's number-one alternative, the Union Station (Northeast No.1) site, solves many of the problems plaguing the Mt. Vernon proposal. [Plates 1 & 2] As described in the Environmental Impact Statement, the Union Station convention center could be built entirely above ground, the preferable convention center layout, according to the Washington Convention and Visitors Association. Costs would be substantially lower, because there would be (1) no need to excavate 500,000 square feet for below-ground exhibition space, (2) no need for an expensive underground system of truck ramps, bays and tunnels, and (3) no need for truck ramps to upper and lower exhibition floors. Industry experts estimate the base building cost of an equivalent convention center at Union Station site to be $312 million, $187 million less than at Mt. Vernon. Related costs, such as financing and "soft costs," are estimated at $91 million, compared to about $150 million for the Mt. Vernon proposal.
Additional savings would accrue at the Union Station site because of the difference in land values. The assessed value of the 17.1-acre Mt. Vernon site is $90 million, while the assessed value of the Union Station site -almost 10 acres larger than Mt. Vernon -- is assessed at $62.5 million -almost $30 million less. WCCA has never taken into account the real value of the contributed land. (Appendix B)
Thus, the estimated savings of building D.C.'s convention center at Union Station is estimated at $270 million. This figure does not include the additional savings due to the lack of need for a truck marshaling yard at Union Station.
In addition, the Union Station site:
The next plates summarize the characteristics of the Mt. Vernon and Union Station sites. Plates 1 and 2 summarize costs and site aspects. Plates 3 and 4 describe access to both sites.
Lost in the controversy about the building of a mega-convention center at Mt. Vernon Square is a question so sensible that it has dropped out of the discussion: Is this project really the highest and best use of a six-block area, directly adjoining downtown?
The area was leveled in the 1970s to build a university for our city. Adding a university, with its many small-scale spin-off retail and commercial job opportunities, as well as diverse housing needs, seemed to be just the right community budding medicine for the beleaguered Shaw neighborhood, which surrounds this land on three sides.
But when Congress squashed that idea, the powers-that-be never looked back and, without further study, replaced the university with a far less appealing alternate, a huge convention center, larger than the U.S. Capitol, sitting in the midst of a struggling, small-scale, mixed-use neighborhood.
A higher and more productive use of this site would be to construct a medium-density, mixed-use urban neighborhood, a prototype for what "Living Downtown" was always meant to be, and should be in the future.
Shaw Village is this place. The prototypical concept presented here, in plans and sketches, is a different kind of economic development for ~ downtown. It is based on the idea that over 1700 new tax-paying citizens, living, working and playing downtown are part of the solution to D.C.'s most serious fiscal problems.
Mt. Vernon Square would be a popular area for residential and commercial development as new downtown housing near Pennsylvania Avenue has shown. Shaw Village would contain, under current matter of right zoning, 3.1 million FAR feet: 1.7 million of commercial; 2.4 million of residential. As Appendix C shows, this could be the home of approximately 1,750 households, 300,000 FAR feet of hotel space and another 300,000 of groceries, eating, drinking and shopping.
This influx of new life would enliven the downtown core, as well as surrounding close-in neighborhoods. But what this potential development would bring in tax dollars to the City is over $27.6 million annually -more than twice what WCCA's convention center at Mt. Vernon would produce. And D.C. could build the convention center at Union Station, producing about $13 million more per year (EIS 4-36, 3-64). Thus, the return to the District would be $40 million in tax dollars each year, rather than the current proposed $13 million. This is the kind of economic development D.C. needs.
NCPC's Monumental Core Plan, Extending the Legacy, calls for new development precisely at the Union Station North site in order to encourage development along the North Capital corridor to New York and Florida Avenues. (Plan pp. 12-15). The convention center is the largest construction project ever in Washington. How can NCPC turn a deaf ear to the first and biggest opportunity before it to do just what its own long-term plan recommends?
Moreover, with the proposed development of New York Avenue (the Mayor's New York Avenue Development Task Force Report, 1996) and with the recent D.C. bailout legislation ordering the sale of air rights over the tracks at Union Station, a new convention center at Union Station North would be physically joined with these new developments.
We should realize our mistake now and, at least, ask for an independent financial analysis of the Mt. Vernon site vs. Union Station, instead of falsely assuming, as does the EIS, that "construction costs of the proposed facility would be the same at any alternative site." (EIS 1-15) Moreover, we should ask what the District would lose by constructing the convention center at Mt. Vernon (i.e. Shaw Village -- worth $27.6 million in annual tax revenues) vis-a- vis the loss at Union Station (storage lots, abandoned buildings).
The Committee of 100 echoes what the President's Advisory Council on Historic Preservation said on September 12,1997 after studying this matter for five months: "The Council urges NCPC to ask for a thorough analysis and comparison of the costs and benefits of constructing this facility at the Northeast No. 1 (Union Station) site before reaching its decision and to include the views of the Council on this matter in this analysis."
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