Robust Core Bodes Well for Future
The DowntownDC Business Improvement District (BID) has released its 2011 State of Downtown report, which shows Downtown and DC ended the year on a strong note, generating employment and population growth, positive office space absorption, record hotel results, and increased property values.
Overall, DowntownDC and the Golden Triangle BIDs contributed an estimated $846 million in local tax and other revenues to the city, a net fiscal benefit which pays for the city's traditional public school budget and other social programs.
"The year was remarkable," said Steven Jumper, director of corporate public policy for WGL Holdings, and chairman of the DowntownDC BID. "Two capstone projects—Phase I of CityCenterDC and the Marriott Marquis convention center headquarters hotel—were well underway as of year-end. Both developments will transform Downtown and DC in ways never before seen, create 4,600 permanent jobs and add multiple millions—about $50 million this year—to the city's coffers."
The State of Downtown report is published annually to update public and private decision-makers on the historical, current and projected performance of the major sectors of the DowntownDC BID area and DC economies: development, employment, office, green buildings, population, housing, hospitality, tourism, culture, entertainment, restaurants, retail, and transportation.
Some 2011 report highlights:
• DC employment grew by 15,900, or 2.2%. BID area employment grew by 1,000, or 0.5%, thanks primarily to LivingSocial, which plans to add another 1,000 employees over the next five years.
• DC added 16,000 new residents last year, while the BID area's population grew by nearly 100. All told, 674 housing units are now under construction in the BID area, versus 6,100 in Central DC.
• Office absorption was 150,000 SF in the BID area and 1.9 million SF for all building types throughout DC, compared to negative absorption for all building types in Suburban Maryland and Northern Virginia.
• BID area hotels set records in occupancy, room rates, revenue per available room, and revenues, while DC set records in all categories except room rates.
• Downtown's retail strength was highlighted by its first $200-plus per SF retail lease signing, and interest in CityCenterDC's 185,000 SF of retail space.
• Despite cuts in federal funding, Downtown theater attendance was at its second highest level in eight years.
As stated in the report, DC's commercial property and income taxes and tax rates are substantially greater than its regional competitors. In addition, Downtown, the Center City and DC face significant regional competition as Suburban Maryland and Northern Virginia make investments to create "urban places" that compete with Downtown and DC on amenities as well as costs. Furthermore, based on current regional development capacity, the region could grow by 15-20 million SF a year for 25 years without any growth in DC.
"The near- and long-term regional competitive threats are real," said Richard Bradley, executive director of the DowntownDC BID. "Although DC has many competitive advantages—including proximity to the federal government, excellent public transit, and numerous cultural, entertainment and dining amenities— the city must continue to invest in Downtown, Center City and other key projects such as St. Elizabeth's East Campus, Skyland and McMillan Reservoir—to continue to attract and retain businesses to grow employment and population, which are needed to increase tax revenues to fund the city's progressive social agenda."
DowntownDC BID is a private non-profit organization that provides capital improvements, resources and research.
(Read more about this story and the report at washingtoninformer.com. You also can visit the DowntownDC BID website at www.downtowndc.org/state.)