WASHINGTON, DC Anacostia Waterfront Corporation

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1 WASHINGTON, DC Anacostia Waterfront Corporation Synopsis The Washington, DC Anacostia Waterfront Corporation experience provides an excellent learning case for the process of local economic development planning and implementation. In 2003, the city drafted a development plan for 2,800 acres of land along the waterfront, and then formed a quasi-public agency to manage its development. The reasons for the establishment of the agency were similar to those often used to justify the creation of development authorities in developing countries independence from government bureaucracy, human resource capacity, streamlined procedures, etc. After about three years of operation, the newly elected Mayor of the city submitted a bill to the City Council to dissolve the agency and bring all of its powers and assets back under the umbrella of the traditional local government structure. Was this decision purely political or was it based on agency design and mandate deficiencies? Rationale for the Establishment of the AWC In 2000, the Washington, DC Mayor brought together the twenty Federal and District agencies that either owned or controlled land along the Anacostia River to sign a Memorandum of Understanding that created the Anacostia Waterfront Initiative (AWI). As an area of potential development, the Office of Planning was tasked with creating development scenarios for 2,800 acres of land along the river stretching nearly seven miles from the Potomac River to the Maryland border. AWI produced the Anacostia Waterfront Framework Plan in 2003, in cooperation with citizens and community stakeholders, to guide the revitalization of the Anacostia Waterfront over the course of the next several years. The Framework Plan estimated that the waterfront would accommodate 4,600 units of new housing, over 600,000 square feet of new retail, and over 3,000,000 square feet of new commercial uses that would generate up to $1.5 billion in new tax revenues over the next twenty years, in addition to over $4 billion in private investment. The city determined, after looking at best practices in other cities, that the implementation of the Framework Plan could only be accomplished by establishing a local waterfront authority a separate entity exclusively focused and dedicated to the redevelopment of the Anacostia riverfront. The DC Council formed the AWC because they were intent on making the AWI more than just an economic development plan. Independence from the traditional government bureaucracy was also a motivation. Flexible procurement and processing requirements were established to allow leveraging of public and private resources for complex projects with a high social impact. In addition, the city felt that there was no capacity to implement the vision of the AWI within the existing government. The Anacostia Waterfront Corporation was established under the AWC Act of Economic Development in DC Until late 2007, the District of Columbia had a network of agencies and organizations that facilitated economic development. The major actors included: Office of the Deputy Mayor for Planning and Economic Development (DMPED): The DMPED supports the Mayor in developing and executing the District s economic development policy.

2 Washington, DC Economic Partnership: A non-profit, public-private partnership dedicated to facilitating economic development in the District of Columbia. Anacostia Waterfront Corporation: An independent instrumentality of the District of Columbia, charged with the cleanup and redevelopment along the Anacostia River. National Capital Revitalization Corporation: A public development company charged with spurring revitalization in underserved and emerging neighborhoods throughout DC. DC Office of Planning: Focus on the revitalization of neighborhoods throughout the District by developing detailed plans. Business Improvement Districts: DC has five BIDs - Capitol Hill BID, Downtown BID, Golden Triangle BID, Georgetown Partnership and Mount Vernon Triangle Community Improvement District. DC-specific Land Issues As a federal city, Washington, DC has special resources, as well as unique challenges. First among these is the amount of federal land within the city and adjacent to city sites. City development agencies and city government face considerable land acquisition challenges. After DC took control of their own local affairs in 1973 (Home Rule Act), a large amount of land was left uncared for by the federal or city government. Ownership was not always well documented, and much of the development that takes place in Washington, DC must first pass through an onerous process of establishing and then transferring ownership. The District, for example, can receive a land transfer to be used to foster economic development or address community social needs. The city, in turn, can transfer that land to an entity to meet public goals. The Anacostia Waterfront Corporation was set-up to be such an entity. Anacostia Waterfront Corporation The Anacostia Waterfront Corporation (AWC) was an instrumentality of the Government of DC that was charged with the development and revitalization of underutilized public lands along the Anacostia River and the advocacy and coordination of environmental and programming initiatives that promote river clean up. AWC had ten primary development and redevelopment projects for which it had the power to facilitate urban planning and zoning, assemble land (including eminent domain), engage experts and advisors, manage the RFP process for public-private development of real estate, provide economic assistance, borrow funds, invest in development projects, and collect fees: 1. Southwest Waterfront: mixed-use (retail, residential, office, maritime, hotel, park and cultural space) 2. South Capitol Waterfront and Ballpark District: mix of retail, entertainment, residential, and office uses 3. Poplar Point: mixed-use (cultural park, civic memorials, wetlands, and residential, commercial, and office development) 4. Anacostia Metro Station Redevelopment: multi-modal transit facility and mixed use hub for shops, apartment residences, and government offices 5. Washington Canal Park: high-density, mixed-use development with retail, housing and office uses 2

3 6. Hill-East Waterfront: mixed-use development including health care, education, employment, government services and administration, recreation, and housing 7. Anacostia Riverwalk: recreational 8. Kingman Island: mixed-use with environmental, education and recreational uses 9. Kenilworth/Parkside: mixed-use, mixed-income development 10. Marvin Gaye Park: recreational The Anacostia Waterfront Corporation had also undertaken various policy initiatives to guide its development projects. These initiatives include: Anacostia Waterfront Environmental Design Standards: The AWC drafted the environmental standards to be adopted by its development partners and the City in implementing cutting-edge environmental policies to green urban areas to make neighborhoods more livable and sustainable. Community Grants and Youth Development Initiative: AWC s Community Grants and Sponsorship Program supports nonprofit organizations that provide quality programming to connect people to the Anacostia River. East of the River Initiative: AWC worked with the Fannie Mae Foundation and America s Promise to help ensure that East of the River children, youth, and their families have continued access to services that provide educational opportunities, quality after-school services, workforce training, mentoring opportunities, and other quality programming. Workforce Initiatives: AWC instituted a Workforce Intermediary strategy that makes it easier to access existing DC public and private resources to ensure that District residents know about, train for, and secure jobs with the 3

4 development projects in the Anacostia area. This also helps boost involvement of Local Small Disadvantaged Business Enterprises (LSDBE) in the projects. The Business Resource Center (BRC): The BRC is a partnership between the AWC, DC Department of Transportation (DOT), and the DC Department of Employment Services (DOES). It is a one-stop business, education and employment opportunities resource center to heighten awareness and engage the East-of-the-River community in the restoration of the Anacostia River and revitalization of its shores by stimulating economic development in neighborhoods through job creation and commercial activity. Institutional Structure AWC was governed by a Board of Directors with nine voting members and four nonvoting members. Seven of the voting members were appointed by the Mayor with the advice and consent of the DC Council. The Board had representation from community development corporations, the environment community, labor union and the National Capital Revitalization Corporation. The Mayor and Chief Financial Officer for the District of Columbia were ex-officio voting members of the board. The four non-voting ex-officio members, invited to serve at their sole discretion, included The Chairman of National Capital Planning Commission, Secretary of the United States Department of Interior, Administrator for the United States General Services Administration and Secretary of the United States Department of Defense. The CEO was selected by the Board and was responsible for the day-to-day functioning of the organization. AWC had a staff of 43 full time employees. Below is an organizational chart to further explain the structure of the AWC. The District of Columbia provided initial funding of $3.8 million in operating expenses for the AWC. The city government continued to provide resources for the operating expenses, being an instrumentality of the city government. AWC received funds from various sources for capital projects. It was also a recipient of small federal grants for a few projects. AWC financed a number of its projects through public-private partnerships to leverage federal, local and private resources. The first CEO of AWC was formerly the Director of the Office of Urban Planning and the key designer of the Anacostia Framework Plan. He was also highly esteemed by local developers and viewed as a city development visionary. In October 2005, after less than one year of operations, he resigned. To fill his position, the Board of Directors recruited a successful, Harvard-trained affordable-housing developer and Anacostia native. It was believed that leadership with a real estate and private sector background would help to 4

5 spur the development process within the AWC. Unfortunately, the second CEO resigned in February 2007 after more than on year of service. Relationship with the DC Government As a quasi-public agency, the management of the AWC was strongly influenced by District government through representation on the Board of Directors. In regard to operations of the AWC, the legislation also provided specific guidance on the relationship between the AWC and other District agencies, including, among others: The right to review and comment on all plans and projects related to the Anacostia Waterfront that may be developed by the District or an agency of the District. Expedited consideration to applications for licenses, permits, financing, and other approvals of eligible projects for which the Corporation is primarily responsible or to which the Corporation has provided or proposes to provide assistance. Release from all District laws, rules, or orders governing procurement or administrative procedures. Requirement to provide a draft offering document for the disposition of any property to the DC Council for a 45-day period of review. Prohibition on expending any funds to influence legislation. Obligation to submit a report regarding its activities during the prior fiscal year to the DC Council, the Mayor, and the Chief Financial Officer. Dissolution of the AWC In July 2007, the DC Council approved a bill proposed by the new Mayor of DC that folded the AWC and NCRC into the Office of the Deputy Mayor for Planning and Economic Development. The bill effectively dissolved the boards of the two corporations immediately and set a date for the powers of the corporation to sunset. The stated rationale for the merger was that the city should directly control the millions of dollars of redevelopment projects along the Anacostia and Southwest waterfronts. The AWC faced several challenges. The biggest obstacle that the agency had to deal with was its limited budget. Unlike NCRP, which received about $25 million and a massive real estate portfolio when it was created during the late 1990s, the AWC received about $8.5 million for 2005 and 2006 and the promise of property. The promise of property from the city and federal government became a bigger issue than anticipated. Most of the land that AWC was mandated to develop is under federal control. Parts were also under the control of NCRC, which did not readily agree to cede it. Gaining title to land in their area was integral to their progress in the development of the Anacostia area and the funding of future operations. Another challenge was that the AWC did not do a good job of self-promotion and dissemination of information about the progress of its projects with the City government and the public in general. This caused a general lack of understanding and appreciation of how much work had been accomplished by the agency. Finally, AWC did not maintain strong communication with the City Council and Mayor to keep them abreast of progress made on projects as well as seeking input. Ultimately, this led to the sense among elected government leaders that they had little control over the largest development initiative taking place within their own city. 5