(Washington, DC) Mayor Adrian M. Fenty today announced the District closed on a $111.5 million in Payment-In-Lieu-of-Taxes (PILOT) financing package leveraging new taxes created by the Department of Transportation’s (DOT) new headquarters building along the Anacostia River.
“We’re going to use this money to pay for world-class waterfront parks and infrastructure,” said Mayor Adrian M. Fenty. “This is a great example of how the District can work with the private sector to find creative ways to finance great projects without dipping into our general fund. It is also important that we recognize Delegate Eleanor Holmes Norton who worked so hard to initiate this project as well as my former colleague retired Ward 6 Councilmember Sharon Ambrose who guided this legislation through the DC Council.”
Instead of paying property taxes at the 11-acre site, the Bethesda-based JBG Cos., which built the DOT’s 1.3 million-square-foot headquarters building, will make annual payments to a fund that will finance eligible waterfront projects. In the past, the DOT site never generated tax income for the District because it was owned by the federal government, which does not pay taxes on the land it controls in the city.
Under the terms of the deal, the District will issue $111.5 million worth of bonds, which will be purchased by Wachovia Bank. The District will use the proceeds from the sale for waterfront parks and infrastructure and the debt service on the bonds will be covered by JBG’s payments.
The PILOT funds will be used to pay for a significant portion of a number of the following projects:
- The Southeast Federal Center Waterfront Park, a five-acre waterfront park that will be designed and built by Forest City Washington, who is building a 5.3 million-square-foot, mixed-use project next to the Washington Navy Yard.
- Diamond Teague Park, located between the new ballpark and the Anacostia River, is named after a young Earth Conservation Corps. member who was a victim of gun violence.
- Kingman Island, which will include the introduction of new trails, restored wetlands and potentially will include a new environmental education center.
- Marvin Gaye Park, the former Watts Branch Park, will include new biking and walking paths as well as stream restoration throughout the linear park.
Funds could also be used to finance parks and infrastructure at Poplar Point, the Southwest Waterfront, the Southwest Waterfront Fish Market, along South Capitol Street and a pedestrian bridge connecting the Parkside neighborhood to the Minnesota Avenue Metrorail Station.