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Gary Imhoff
Five Reasons Not to Pass the Convention Center Financing Bill
Testimony to the City Council’s Committee on Finance and Revenue and Committee on Economic Development
May 29, 1998




Dorothy Brizill
Bonnie Cain
Jim Dougherty
Gary Imhoff
Phil Mendelson
Mark David Richards
Sandra Seegars


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Good afternoon, members of the Council and Council staffers. The testimony that was just given by Dorothy Miller reminds me of the suggestion by Sam Smith that, since the know this Convention Center will be obsolete in ten years, we may as well just skip building it, and go directly to planning the third convention center.

I shall avoid the temptation of speaking today about the siting mistake that has been made with the convention center, and instead speak just about Bill 12-379, the financing bill that is the subject of this hearing today. I have only five points to make in response to the earlier testimony today. First, however, I would like to parenthetically answer Ms. Mason’s [Councilmember Hilda H.M. Mason] earlier question about the possibility of private financing for the convention center.

When the existing convention center was being build, there were two offers to privately fund and build the center — one by Donald Trump and the other by John Hechinger. These offers were never seriously pursued by the Mayor of the City Council, and no one has seriously pursued any possibility of private financing for the convention center now being planned.

Now, the five points that I mentioned.

One: we have frequently heard today that “The hospitality industry has agreed to tax itself,” or that “hotels and restaurants are paying for this convention center.” The pretense that the hospitality industry supports this project financially is a canard. The special interests that wrote this financing bill wrote it to protect themselves from taxes. Mr. [Terence} Golden’s Marriott Corporation and Mr. [Bill] Edward’s Hilton Corporation are not going to contribute a single dime in additional taxes to fund this center. This bill levies no corporate taxes, no corporate income taxes on these industries to fund this center. All of these taxes are consumer taxes. They are levied directly on consumers and are merely collected and passed on by hotels and restaurants.

Two: the phony flexible price that the Washington Convention Center Authority substituted here today for a guaranteed maximum price provides no reassurance. This maximum price does not fulfill the minimum requirement for the actual cost cap that this Council claimed it wanted. The WCCA and Clark Smoot [the building contractor] can continue to negotiate this proposed price between them for the entire length of the construction period, and neither has any interest, incentive, or discipline to keep this cap down. Any Councilmember who would vote for the Convention Center financing bill on the basis of this phony flexible price would march confidently into a field of quicksand.

Three: Mr. [Terence] Golden [chair of the WCCA] again repeated his threat to the Council today that if you don’t approve the Mt. Vernon site that is demanded by the special interest groups that he represents, that they may very well not support any other site. This is a fatuous threat, and you need not feat it — it is a bluff, and an empty bluff. If Mr. Golden’s loyalty was to this city, and if he represented the interest of this city’s residents, he would not make it. If Councilmembers had any backbone, they would never accept it from him.

Four: the Chief Financial Officer’s certification is insufficiently support by fact and was weakly, very weakly, defended in the testimony today. The Council cannot rely upon it, and must demand further elucidation and documentation for why this bill supposedly has no fiscal impact.

Five: Mrs. Ambrose [Councilmember Sharon Ambrose] and Mr. Catania [Councilmember David Catania] have amply demonstrated today, through their incisive questions, that this Council does not have firm answers for any of the financial questions that must be answered before it votes on this bill. Mr. Golden and his cohorts were certainly unable to provide answers, and Mr. Smith [Councilmember Frank Smith] has shown by his reaction to Ms. Seegars’ question that he certainly does not have them. [Councilmember Smith had refused to answer a financial question from Sandra Seegars].

The aim of supporters of the Mt. Vernon site is to start digging, to get us into a hole, deeply into a hole and irrevocably committed, and then to reveal slowly the real costs and present the bills, and demand payment. If the Chairs of these committees really want answers to these questions, they will demand that the scheduled Council vote be delayed. On the other hand, if this hearing is just a pro forma sham, and if this hearing was not intended to get answers to these questions, then the vote on this bill will take place on Tuesday, as scheduled.

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