The Central Washington Activation Conversion Program (Office-to-Anything Program) is a new program that will further catalyze Downtown recovery in the District. The program would encourage the repositioning of office space into new, activated commercial, entertainment or retail spaces via a 15-year temporary tax freeze. The Activation Program is designed to complement the District’s Housing in Downtown program, and therefore is not available for properties converting to residential use.
Mayor Bowser’s Comeback Plan, the recently released Office of Planning Public Realm Plan and the Downtown Action Plan released by the Golden Triangle and Downtown DC Business Improvement Districts call for a more vibrant, mixed-use Downtown. Downtown is currently overdependent on office space – which makes up 87% of real estate. Fostering a more livable Downtown requires not only housing, but a mix of destinations that can attract visitors, support new residents and produce activity and revenue.
Details of this new, competitive program are available in the FY2025 Budget Support Act, HERE.
Key Definitions and Eligibility
Eligible Area – Central Washington Planning Area
The eligible area covers all downtown, portions of Noma, and Southwest, and is informed by the Office of Planning’s Central Washington Planning Area, the eligible area includes 1,750 linear feet in any direction beyond the planning area boundaries.
Eligible buildings for repositioning include the construction, alteration, or renovation of a property with a minimum of 50,000 square feet that results in the conversion of the property from a primarily office use to a use that is not residential, or to a Trophy (Class A) office building.
Tax Freeze Structure
The program will offer a 15-year tax freeze; an approved tax freeze shall begin in the year the certificate of occupancy is issued for the property. The program would effectively “freeze” a property’s taxable value in the base year and abate the difference between base and actual assessed value for a period of 15 years. The tax freeze will be calculated using a base year of 2025 or the year before the property’s repositioning is complete in which the property taxes are the highest. Therefore, the improvements made to the property would not be incorporated into the taxable assessed value. At year 16, the tax freeze would expire, and the taxable assessed value would reset to the actual assessed value.
Resources Available
The program is competitive, with available funds limited to the set by program caps:
- FY25 and FY26 – $0 total
- FY27 – Total cap increases to $5M
- FY28 – Total cap increases to $6M
- FY29 – Total cap increases to $8M; and
- Future Years – The prior year's cap, with 4% annual escalation in each successive year.
Next Steps for Implementation
DMPED will promulgate regulations and launch the program in FY25, in coordination with District partner agencies.