Washington City Paper by Jeffrey Anderson
D.C. Council Chairman Phil Mendelson will introduce an emergency bill today to waive a competitive bidding requirement in the Procurement Practices Reform Act of 2010 as it relates to the 2 million-square-foot mixed use project at the McMillan Sand Filtration Facility.
If approved, the bill would restore a repealed exemption and allow master developer Vision McMillan Partners—a consortium of Trammell Crow Company, EYA and Jair Lynch Real Estate Partners—to prepare the century-old site, which is listed on the National Registry of Historic Places, for vertical construction.
The bill also revives a controversy over the 2007 selection, by the Deputy Mayor for Planning and Economic Development (DMPED), of VMP as master developer of one the city’s largest, most historically significant sites, based on a 2015 review by D.C. Auditor Kathy Patterson, who recommended last year that the city go back and put the project out to bid.
Nine of the council’s 13 members must approve an emergency resolution to vote on the bill itself, which then would require majority approval. On Monday, Patterson reiterated her concerns over the lack of competition in selecting a developer for the McMillan site: “The Council put a great deal of time and thought into a sweeping rewrite of the District's procurement law in 2010—it's a serious matter to waive portions of that law. It's also a serious matter to spend taxpayer dollars without competition and my office has been raising concerns about the lack of competition in contracting in several areas. I realize there is strong support for the McMillan project on the Council, and I hope they give the emergency legislation the kind of serious consideration it merits.”
In an email to the council, Mendelson explains that the District is paying VMP for demolition, infrastructure and other pre-development work needed to develop the site. (The District has already reimbursed the firm more than $9 million in pre-development costs for architectural, legal and consulting services.) Once prepared for vertical construction, VMP will purchase the decommissioned water filtration site and develop the property. The firm recently released a request for qualifications to select general contractors to bid on the construction of the project, which will consist of residences, retail, medical offices and a park.
“This emergency is necessary to restore an exemption from the District’s procurement laws that until recently was thought to still exist,” Mendelson wrote to the council secretary on March 31. “Without this emergency, there exists ambiguity in the law related to competitive sourcing of contracts that allows VMP to enter into contracts with the District to perform the pre-development work on behalf of the District.” Accompanying the emergency resolution is the bill itself, which states, “any contract between DMPED and a developer for the development of [the site] shall not be subject to the Procurement Practices Reform Act of 2010.”
In seeking emergency approval, Mendelson, who once publicly opposed the project on historical preservation grounds, has now become its steward. On Monday, activists who have demonstrated and testified against VMP's plan for years, based on the VMP/DMPED arrangement, and concerns over design, density and respect for preservation, also reacted.
“Because this Resolution concerns an important and controversial public asset, and because it would set an unfortunate precedent for overturning government-transparency reforms when they are inconvenient, I ask that the Council not consider it until it has enjoyed a full public discussion, including a public hearing with 30 days' notice,” wrote Ward 4 resident Andrea Rosen, in a letter to Mendelson and the council.
“The emergency cited here merely attempts to quietly fix, in an unethical way, what we have told you is broken about this project for the past few years,” wrote Kirby Vining, president of the McMillan Advisory Group, a city-sanctioned organization of concerned citizens, and a member of the Committee of 100 of The Federal City. “I think the people of the District and their tax dollars deserve better than this ex post facto fix of a very serious legal problem that has been perpetrated by DMPED for many years now.”
A draft of Mendelson’s emergency resolution, obtained by City Paper, contains clues as to why its opponents are upset. The resolution states that “after a competitive solicitation,” the National Capital Revitalization Corporation, a quasi-government agency in charge of developing public properties, selected VMP to develop the site, in 2007. “NCRC was largely exempt from the District’s procurement laws, at that time the Procurement Practices Act of 1985,” the resolution states. That July, it continues, the city transferred NCRC’s projects to DMPED, and provided that they “would continue to be exempt from” the 1985 law. After the council passed the 2010 reform law, however, the exemption from District procurement laws “was not updated to reflect the new body of procurement law.” The result, the resolution states, is that “there is ambiguity as to whether there is legal authority for the District to move forward with the necessary contracts between VMP and the District to complete the work…Providing an exemption for the McMillan project from the [2010 reform law] will clarify that DMPED and VMP may still move forward with the contracts as contemplated, which because of the nature of the development agreement do not allow for competition in the contract, because VMP is performing the work associated with the pre-development costs paid by the District.”
Mendelson’s emergency request appears to fly in the face of Patterson’s review of public records, released last October, in which she wrote: “Although in its early stages that plan included a competitive process that resulted in the selection of VMP as the land development team, it ultimately resulted in a greatly expanded role and exclusive rights for VMP, all without the benefit of a competitive process. Just as it is common knowledge in the construction industry that government practice is to re-bid a project if there is a material change to the scope of work, certainly, the change to VMP’s role and giving it exclusive rights are material changes that warrant a new competitive process.”
The draft resolution also overlooks key facts in the McMillan saga. A review of the public record on McMillan shows that, in 2006, NCRC chose VMP from a field of five other firms as a "Land Development Partner" to come up with a framework for developing the site. The solicitation of those bids—the Request for Qualifications—explicitly called for additional rounds of bidding to select the actual site developers.
Although at the time VMP also sought development rights for the site, a July 26, 2007, email to DMPED from outgoing NCRC Development ManagerMcClinton Jackson III, reiterated that the solicitation called for further competitive bidding “after the master plan has been designed and approved.” In December 2007, however, after DMPED took control of the NCRC real estate portfolio, it signed a Letter of Commitment with VMP and the McMillan Advisory Group, then represented by land use lawyer Tony Norman. The agreement specified that, conditioned on compliance with the agreement, VMP would take over as master developer “without further bidding.”
Norman, currently the board chair for Pacifica Radio, which owns local station WPFW, tells City Paper that DMPED and VMP, with Mendelson acting on their behalf, are “trying to cover up for the fact that’ve operated in a gray area the entire time.” In an email to City Paper, he detailed breaches of the 2007 agreement he signed, along with Jackson, on behalf of DMPED, and a consultant for VMP, Tania Jackson, who now serves as chief of staff to Ward 1 Councilmember Brianne Nadeau. Norman claims that VMP denied his group the opportunity to conduct independent studies and to review the project’s master plan before it went before the Historic Preservation Board or the Zoning Commission, and feasibility studies or mitigation plans related to traffic, sewer/storm water and environmental impacts;
He also says VMP did not implement recommendations from the Office of Planning in 2002 that were reiterated in the Letter of Commitment, and that it terminated its relationship with a historic development partner that had been a key factor in his group’s initial support for VMP to develop the site.
“They think this thing is too big to fail,” Norman says. “It involves a lot of contracts and a lot of money. Every mayor, once they became mayor, has been addicted to it.”