Washington Business Journal by Daniel J. Sernovitz
The D.C. Council voted overwhelmingly Tuesday in favor of granting up to $60 million in tax breaks to keep The Advisory Board Co. (NASDAQ: ABCO) in the District, but not without pushback from critics who said the District should get significantly more in exchange for the incentive package.
The 12-1 vote on the first reading of the Local Tax and Incentive Act of 2015 appears to put the legislation on track for full approval later this year. That would set the stage for the publicly traded technology firm to anchor the construction of a mixed-use development near by the Mount Vernon Triangle to be developed by Douglas Development Corp.
The Advisory Board has agreed to create at least 1,000 new jobs in the District and to lease at least 425,000 square feet for a 15-year term in exchange for the performance-based tax breaks, which would be awarded only after the company has met annual hiring goals. The company has also agreed to a community benefits package that includes providing pro-bono work for local nonprofits and to award a portion of its tenant-improvement costs to D.C. Certified Business Enterprise companies.
Proponents of the legislation, including Councilman Brandon Todd, D-Ward 4, argued it's essential to ensuring the District does not lose employers to Maryland and Virginia. Along with the job training and opportunities for District residents, it will generate more in tax revenue over the life of the Advisory Board's lease than the city will be paying out in tax breaks.
"We must ensure that our city remains attractive and remains competitive in retaining high-quality businesses," Todd said.
Councilwoman Elissa Silverman, I-At large, voted against the legislation because of concerns the District is offering a lucrative incentive package to a company that was already planning to create hundreds of new jobs.
Silverman offered up several amendments intended to provide more benefits for District residents, which were voted down. They included a requirement that the company and Douglas Development adhere to the District's living wage law, extending not just to Advisory Board employees but also to subcontractors and the building's custodial and security staff.
The Living Wage amendment failed 10-3. D.C. Council Chairman Phil Mendelson was among those who voted against it, arguing the provision would undercut the District's ongoing efforts to encourage businesses to move to D.C. and give more of an advantage to neighboring jurisdictions that do not have living wage requirements.