On October 27th of 2020 the Mayor  with the acquiescence of the City Council(with the seeming exception of CM Silverman), and the DC’s Office of the Attorney General (OAG) effectively ceded the planning and development the future of Adams Morgan to two Hedge Funds Friedman Capital (Detroit) and  Wexford Capital via commercial real estate firm Foxhall Partners when they failed to enforce the terms of the $46M Adam Morgan Hotel Tax Abatement.   It’s frightening enough to see a historic neighbor such as Adams Morgan effectively sold-off to hedge funds, but also how impotent our government was when it came to enforcing our laws and protecting our most venerable. 

Hedge Fund – a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.

In 2019, The Atlantic did an article on some of the possible dynamics when a hedge fund buys your neighborhood, “When Wall Street Is Your Landlord”.

Next month our city will again address this matter of effectively selling off larger portions of our city neighborhoods to hedge funds when it takes up the Mayor’s (OPs) proposed amendments to our Comprehensive Plan.    The active ingredient of the Mayor’s amendments to the Comp Plan is something called mass up-FLUMing.  In the context of our Comp Plan mass up-FLUMing effectively turns large areas of our city over to hedge funds to plan and development, as they are the only ones have the capacity to benefit from mass  upFLUMing.   And as we learned from the case of Adams Morgan Hotel once up-FLUMing occurs our city’s political and legal infrastructure WILL NOT be able to project existing residents and provide effective legal oversight, basically ending self-government in these areas.   This is especially true in DC  predominantly Black neighborhoods the primary targets of up-FLUMing.

up-FLUMing – in DC this is the process of modifying the city’s Comp Plan in order to radically change our  city’s Future Land Use Map (FLLUM) to increase development density in city neighborhoods.  Typically, allowing the development of large/tall mix use luxury projects in formally low and moderate density residential neighbors while minimizing or eliminating current resident’s say in the development process.

The Mayor, Council Members such as Cheh, Nadeau and others, developers and many members in the so-called Smart Growth movement argue that these Comp Plan amendments which turn large portions of our city to hedge funds will result in greater numbers of affordable housing and a more racially equitable city.  And will make our city more financially sound as revenues from hedge fund controlled development trickles down residents. We know from the former Donatelli Project at Hill East neither affordable housing or trickle down results, in fact the opposite.

For persons such as myself, the above Smart Growth profeers are ridiculous on their face. As the intent of hedge funds is to capture all the trickle have as much public investment (tax abatements, TIFs, public land dispositions) as possible funned through the coffers. 

In fact, I believe CFO Dewitts’ suddenly announced resignation affirms my view that up-FLUMing large portions of the city for hedge funds via Comp Plan amendments WILL NOT trickle down nor produce affordable housing as the smart growth crew proffers.  So, he is getting out of dodge before the chickens come home to roost.   In short, Dewitt believes the Council will raid the city’s reserves in the coming budget season to force a trickle down that the city’s edge fund focused development policies do not produce. This raiding will cause the city’s bond rating on Wall street to drop down from AAA-ish ratings. And he does not want that on his record and his watch, so he’s getting out of dodge.

The Council unlike the CFO is more vulnerable to citizen up roar given the city had nearly a $600M budget surplus this past year, our Apartheid-like racial, economic, and  social system that COVID-19 exposed and the coming eviction crisis which will occur as edge fund backed projects will need to horde vacant units to maintain prices.  And while our Mayor fiddles with a solution that depends on keeping everyone drunk and high while we can make it through recovery in 2022/3.

To better understand the potential impact of mass up-FLUMing, we can study how a Detroit began consuming Adams Morton in 2010. 

William