I knew this “market rate” housing talk as B.S. a few years ago when a developer speculated in the Columbia Heights market with a high end luxury condo project and it crashed. The city steps in with $5.7M in taxs abatements and a few weeks later the building is flipped by the developer for a record $670/sqft. That’s not “market rate” housing, that’s cross between money laundering and a ponzi scheme. But check this sh$t out.

The city just enabled a developer to sell a homeless shelter for $883/sqft..

In 2012 the Gospel Rescue Ministries a faith-based homeless shelter which opened in 1906 and operated with District Government contracts considers filing for bankruptcy but then decides instead to sell the shelter. So in February 2013, The Rock Creek Property Group comes along and buys the shelter for $5.95 million, or $192 per square foot from Gospel Rescue to build high end “market rate” residential units.

In June of 2014 the city comes back and offers Rock Creek a 20 year lease at $1.28 million, or $39.77 per square foot to convert back to a homeless shelter.

Rewind to December 2011, the city gives developer Brian Friedman a $46M tax abatement to build a hotel in Adams Morgan. The deal is rushed through Council claiming a hardship need or the deal with fail. Deal fails any way. In 2013 Friedmen leverages the abatement to find a new partner. The partner comes in from New York takes a piece of the deal from Brian and Freidman Capital.

Fast forward to 2016. Rock Creek signs a new lease for the old now new and improved Gospel Rescuse homeless shelter with the City as part of the Mayor’s “Bill 21-620, Homeward DC Omnibus Approval of Facilities Plan for Short-Term Housing for Persons Experiencing Homelessness Act of 2016”.

On March 10th 2016, Rock Creek flips the shelter and lease to guess who? Brian of Freidman Capital for $883/sqft or about $28.5M.

So did the city effectively pay Freidman Capital $46M to pay $28M to the Rock Creek Property Group so Rock Creek could convert luxury rentals back to a homeless shelter that the city could have bought 3 years ago as a shelter for $3M or so?

Could this be the same city that is supposedly so broke and concerned about the city’s debt cap that it can’t fully fund the New Communities Human Capital programs and acquire build first sites? Instead, everything needs to be funded by converting public housing to “market rate” housing? Of course not, right.

It surely is not the same city that is proposing to send $55M to build a Basketball Practice Facility for billionaires because the billionaires can only afford to pay $5M. What kind of “market rate” is that?

I’m sure it’s me, but what my government calls saving the homeless by closing DC General and fostering economic development, sounds and smells like a tax payer money laundering ponzi scheme. But WTF, we going to but a cap on it.

William

Rock Creek Property Group cuts ties after converting Chinatown site into homeless shelter
www.bizjournals.com/washington/breaking_ground/2014/06/in-chinatown-high-end-residential-is-out-and.html

In Chinatown, high-end residential is out and shelter is in
www.bizjournals.com/washington/breaking_ground/2016/03/rock-creek-property-group-sells-chinatown-site.html?ana=e_du_pap&s=article_du&ed=2016-03-14&u=oSmDycT7fYztxKl8aVEQckJ2JXJ&t=1457984186&j=71395762

Tax abatements, exemptions to face new scrutiny in D.C.
www.bizjournals.com/washington/print-edition/2011/09/30/tax-abatements-exemptions-to-face-new.html

Gospel Rescue Ministries Files For Bankruptcy To Keep Its Buildings
www.washingtoncitypaper.com/blogs/housingcomplex/2012/05/30/gospel-rescue-ministries-files-for-bankruptcy-wont-lose-its-buildings/

UDR closes on View 14 sale
www.bizjournals.com/washington/blog/2011/06/udr-closes-on-view-14-sale.html

Tax break approved for Adams Morgan hotel
www.bizjournals.com/washington/blog/2010/12/tax-break-approved-for-adams-morgan.html