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| Audit: D.C. hotel failed to meet requirements for $46 million tax subsidy | Audit: D.C. hotel failed to meet requirements for $46 million tax subsidy |
| (32 minutes later) | |
| The developers of a boutique hotel in Adams Morgan failed to meet hiring requirements needed to obtain a multimillion-dollar tax abatement enacted by the D.C. Council, according to an independent audit. | |
| The report, which echoes earlier findings by the D.C. government, concluded that the Line Hotel’s developer employed only 323 District residents, instead of the 342 the developer was required to hire for construction work under the terms of the $46 million abatement. | |
| The audit also found that the hotel failed to meet the requirement of providing all of its apprenticeships to District residents. | The audit also found that the hotel failed to meet the requirement of providing all of its apprenticeships to District residents. |
| Jake Lamstein, a Line executive, disputed the report’s findings, saying in a statement that the auditor, F.S. Taylor & Associates, had used “outdated data” and that the developer had exceeded the hiring requirement, employing a total of 441 D.C. residents. | |
| Lamstein also said the hotel granted apprenticeships to all D.C. residents seeking them. | |
| “We look forward to working with the mayor and the Council . . . in an effort to bring this matter to resolution,” Lamstein said. He described the 20-year tax abatement as necessary to secure the hotel’s future. | |
| District officials contend that the audit is further evidence that the Line did not meet its obligations. | District officials contend that the audit is further evidence that the Line did not meet its obligations. |
| Council member Brianne K. Nadeau (D-Ward 1), whose district includes the hotel, faulted the Line for failing to satisfy “critical components of the abatement,” which were intended to “not only provide good jobs but career pathways for Ward 1 and District residents.” | Council member Brianne K. Nadeau (D-Ward 1), whose district includes the hotel, faulted the Line for failing to satisfy “critical components of the abatement,” which were intended to “not only provide good jobs but career pathways for Ward 1 and District residents.” |
| “Although we cannot turn back the clock to get those jobs back, we can stand firm and hold the developers accountable,” Nadeau said. “They did not earn, and should not be awarded, a tax abatement.” | “Although we cannot turn back the clock to get those jobs back, we can stand firm and hold the developers accountable,” Nadeau said. “They did not earn, and should not be awarded, a tax abatement.” |
| The audit, which was completed in early December, was commissioned by the administration of Mayor Muriel E. Bowser, who sent it to the council earlier this week. A spokesperson for the District’s Department of Employment Services, which oversees the hiring requirements, said the agency’s director, Unique N. Morris-Hughes, was not available for comment. | The audit, which was completed in early December, was commissioned by the administration of Mayor Muriel E. Bowser, who sent it to the council earlier this week. A spokesperson for the District’s Department of Employment Services, which oversees the hiring requirements, said the agency’s director, Unique N. Morris-Hughes, was not available for comment. |
| The dispute over the Line’s tax abatement stretches back several years. As the hotel was being built, Bryan Weaver, a former Adams Morgan neighborhood commissioner who helped craft the jobs requirement, expressed concern that the developer was not meeting the targeted number. | The dispute over the Line’s tax abatement stretches back several years. As the hotel was being built, Bryan Weaver, a former Adams Morgan neighborhood commissioner who helped craft the jobs requirement, expressed concern that the developer was not meeting the targeted number. |
| The Bowser administration reached similar conclusions last year during its own review — findings that the Line’s ownership also questioned. Last April, the employment services agency recommended that the Sydell Group, the Line’s owner, pay a $600,000 fine instead of losing the abatement, saying the hotel had “made a good-faith effort toward compliance.” | |
| Nadeau and council member Elissa Silverman (I-At Large) questioned the legality of the recommendation and sought an opinion from Attorney General Karl A. Racine (D). He concluded that the original legislation creating the abatement — enacted a decade ago — mandated strict adherence to the requirements. | |
| Last June, the council deferred the abatement for a year to allow time for the audit to be completed. | |
| Before the deferment, the hotel waged a campaign to persuade the public that it had met its obligations, creating a website that included a list of what it said were 471 District residents it had hired as construction workers. | |
| The list included designers, architects, preservationists, a development executive and star chef Erik Bruner-Yang, who opened his Brothers and Sisters restaurant at the hotel. | The list included designers, architects, preservationists, a development executive and star chef Erik Bruner-Yang, who opened his Brothers and Sisters restaurant at the hotel. |
| In its own study, made after inspecting workers’ time sheets and proof of residency, the auditor found that the hotel had employed 323 workers who were District residents — 19 below the requirement. | In its own study, made after inspecting workers’ time sheets and proof of residency, the auditor found that the hotel had employed 323 workers who were District residents — 19 below the requirement. |
| “They didn’t hold up their end of the bargain,” Silverman said. “Therefore, they don’t deserve our subsidy.” | “They didn’t hold up their end of the bargain,” Silverman said. “Therefore, they don’t deserve our subsidy.” |
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