DowntownDC Business Improvement District State of Downtown 2011 The DowntownDC Business Improvement District had the following impact on the region at the MONTGOMERY end of 2011: COUNTY
0.1% of land area Maryland 0.2% of population 2% of retail space 6% of jobs DOWNTOWNDC DC BID 9% of hotel rooms Virginia Falls ARLINGTON 9% of museums Church COUNTY Fairfax 10% of the theater companies PRINCE Alexandria GEORGE’S 10% of Zagat-rated restaurants COUNTY FAIRFAX 13% of 2000-2010 office building COUNTY development and renovation investment square footage 16% of Metrorail exits 18% of total private and government office space 50% of professional sports teams The DowntownDC BID area is the center of the regional and Washington, DC, economies.
The DowntownDC Business Improvement District had the following impact on Washington, DC, at the end of 2011:
1.4% of population 1.5% of land area 7% of retail space 16% of local tax and other revenues 17% of museums 23% of theater seats 24% of 2000-2011 building development and renovation investment square footage 25% of Zagat-rated restaurants 25% of jobs 26% of Metrorail exits 35% of hotel rooms 38% of total private and government office space
2011 State of Downtown
Table of Contents
Year in Review 2
Current Development 9
Employment 17
Office Market 24
Green Buildings 33
Population & Housing 34
Hotels, Tourism & Conventions 39
Culture & Entertainment 46
Retail & ON THE COVER ABOVE Restaurants The $1.1 billion mixed-use CityCenterDC From January 2011-April 2012, 50 project, by Hines and Archstone and LivingSocial hired 700 new employees, Gould Property, is the capstone of who work at six Downtown DC Transportation Downtown DC's revitalization. locations in 134,000 SF of office space. 56
DC Financial Overview Purpose of the State of Downtown 60 The State of Downtown report presents the facts about the Downtown Downtown economy in order to better inform decisions for many stakeholders: Fiscal Impact DowntownDC BID members (the General Services Administration, private 65 and government property owners and tenants), investors, developers, retailers, brokers, theaters, museums, non-GSA federal government officials Regional and the DC government’s elected officials and staff. Competition 68 The State of Downtown report collects historic data to highlight trends and compare DC to our regional and national competitors. Comparisons are important to gauge competitive threats and opportunities for improvement.
DowntownDC Business Improvement District Year in Review
2011 was a strong year for the DowntownDC BID area and DC economies. The basic building blocks of any economy—employment and population—grew at a robust rate in both absolute and relative terms. Employment in the DowntownDC BID area and DC grew at 0.6% and 2.2%, respectively. The population in the DowntownDC BID area rose by 1%, and 2.7% in DC. New residential construction will increase the number of Downtown residents by another 5%—to 19,000 in the next few years. Regionally, DC expanded its market share, growing to 24.2% of the area’s employment and 11% of its population. This growth should continue over the next five to 15 years, particularly if the city continues to invest in strategic economic and social development projects in Downtown, the Center City and its neighborhood commercial districts. The economic development investments should focus on Metrorail maintenance, transit alternatives and urban placemaking. Modest reductions in the city’s high commercial property and income tax rates should also be explored to retain/attract employers in/to DC.
Downtown and DC’s level of economic activity and tax revenues have recovered from the Great Recession of 2007– 2009 and the financial crisis of September 2008, but the city’s unemployment rate remained stubbornly high at 9.9% in February 2012. Mayor Gray’s focus on the city’s 34,000 unemployed residents is on-target, and the annual churn of 35,000 to 50,000 DC jobs held by commuters (9,000 to 15,000 in the DowntownDC BID area) should provide many unemployed DC residents with employment opportunities. U.S. and foreign real estate investors continue to rate DC as one of the world's top investment markets.
2011 Association of Foreign Investors in Real Estate Rankings
Top Five US Cities 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
New York City 1 1 2 2 1 1 2 2 2 2 Washington DC 2 2 1 1 2 2 1 1 1 1 San Francisco 3 4 3 3 4 4 4 4 4 5 Boston 4 3 4 ------Los Angeles 5 5 5 4 3 3 3 3 3 3 Houston - - - 5 ------Seattle - - - - 5 5 - - - - San Diego ------5 - - - Chicago ------5 5 4 Miami/Ft Lauderdale ------5 - -
Top Five Global Cities 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
New York City 1 1 3 3 1 2 3 4 4 4 London 2 3 1 2 2 1 1 2 2 2 Washington DC 3 2 2 1 2 4 2 1 1 1 Sao Paulo 4 ------San Francisco 5 ------Paris - 4 4 - 4 3 4 5 3 3 Shanghai - 5 - 5 5 - - - - - Tokyo - - 5 4 - 5 5 3 - - Los Angeles ------5 - Milan ------5
2 Year in Review 2011 State of Downtown 2011 Downtown Economy Highlights: Year in Review
1. LivingSocial added 700 new Downtown employees from January 2011-April 2012, for a total of 950 employees. Overall, the number of jobs in the DowntownDC BID area increased by approximately 1,200, or 0.6%, during the same period.
2. Phase I of the $700 million CityCenterDC project broke ground in April. The project will create 520,000 square feet (SF) of office and 185,000 SF of retail space, 216 condominiums, 458 apartments and 12,000 public parking spaces for Downtown shoppers and other visitors.
3. Office absorption was positive in Downtown (150,000 SF, or a 0.2 % increase) and DC (1.9 million SF, or a 1.1% increase). LivingSocial is growing to occupy six Downtown locations, totaling 134,000 SF by April 30, 2012.
4. DC's population increased by 16,000, or 2.7%, to 618,000 from April 2010 to July 2011. The DowntownDC BID area's population increased by 1% as the apartment vacancy rate dropped 2%. New DC residents in and around Downtown will increase demand for Downtown retail, restaurants, cultural attractions, entertainment venues and transit. With 6,145 multifamily units under construction in Central DC, the city’s population should continue to grow by 5,000 to 8,000 per year.
5. DowntownDC BID area hotels set annual records for operating performance and revenues.
6. The Downtown nightlife economy continues to grow. New restaurants and entertainment venues such as The Hamilton and the Riot Act Comedy Theater continue to open.
7. The mix of uses in the DowntownDC BID area and Center City continues to grow, taking office space off the market and improving the office market supply and demand dynamics. Organizations such at the Ford’s Theatre Center for Education and Leadership and BASIS Schools, Inc., out of Scottsdale, Arizona (ranked in the top 10 high schools in the U.S. by Newsweek, The Washington Post and U.S. News and World Report), have opened in the DowntownDC BID area. Citywide, Vornado converted two of the three former Bureau of National Affairs office buildings to apartments in 2010, and Kiplinger’s former office building is being renovated into a hotel in 2012. Again, LivingSocial, a private corporation, chose to invest and locate in the DowntownDC BID area.
8. Downtown cultural institutions and entertainment venues continue to attract 9.5 million patrons each year. Despite losing $6 million in federal funding from the National Capital Arts Commission, DC cultural institutions continue to provide world-class cultural programming and attract hundreds of thousands of patrons to Downtown.
9. DC recorded its 15th consecutive budget surplus, and added $243 million to it budget surplus (now at $1.1 billion). The city is now in a position to continue its strong performance in both economic and social development investment, thus accelerating developing its 100-120 million SF of development capacity to harvest new annual tax revenues of $800 million to $1 billion projected upon full build-out.
The Hamilton, the newest restaurant from Clyde’s Restaurant Group, opened in December 2011. The already popular gathering spot boasts DowntownDC’s only “club style” music venue with a capacity of up to 450 patrons. Clyde’s invested $25 million in this impressive addition to the city’s nighttime economy.
DowntownDC Business Improvement District 3 2012 DowntownDC BID Area Concerns:
1. Federal political stalemate has created uncertainty about DC and regional employment growth over the next three years. The stalemate over crafting a solution to reduce the current federal budget deficit of more than $1 trillion and the current federal debt level has caused the city to face the prospect of seeing federal government employment and procurement spending stall, or even decline, in both the city and the region.
2. A long-term trend for more efficient office space use by both the public and private sectors. Led by the General Services Administration (GSA) and large law firms, this trend is creating new office design configurations that reduce the square footage of office space per employee from 200-250 per SF to 100-150 per SF. Examples include GSA’s National Capital Region headquarters at 700 D Street, SW, and Arnold & Porter’s plans to reduce its square footage needs from 440,000 SF to 335,000 SF while maintaining its current employee base.
3. The impact of the Base Realignment and Closure (BRAC) Commission decisions is finally being felt in Crystal City and other parts of Northern Virginia. It is estimated that one million SF of office space will be vacated in 2012, followed by another one million SF in 2013. Although renovations might delay delivery dates, and other office space might be converted to residential, this office space will be very competitive on a cost basis for cost-conscious tenants.
4. Metrorail will begin operations to Tysons Corner and Reston in late 2013 to early 2014. There will be four stations in Tysons Corner and one in Reston.
5. Questions about law firm employment will continue. Although several out-of-town law firms opened offices in Downtown and other parts of DC in 2011, Howrey LLP closed in March 2011, vacating approximately 300,000 SF, most of which is still vacant. Nearly all the lawyers joined other firms.
6. Will Downtown finally become a regional shopping destination? In 2011, Filene’s Basement closed its 56,000 SF store. TJ Maxx’s 2012 opening will offset much of this loss. Until CityCenterDC opens, however, Downtown retail will not reach a critical mass of shoppers’ goods retail square footage to become a regional shopping destination.
7. A decline in citywide conventions. The number of citywide conventions is declining from 22 in 2011 to 12 in 2012 and is already impacting DC hotel performance. DC hotel revenues in the months of January – March 2012 have been down 2% to 5% over the same period in 2011.
8. Metrorail transit maintenance work. Repairs are impacting ridership, especially on weekends. Maintenance management is improving, particularly in communications. These repairs must continue to improve the transit experience for 107,000 riders who ride Metrorail to the DowntownDC BID area each weekday.
9. Streetcar progress. A Streetcar financing plan is needed sooner rather than later, and opening the H Street Streetcar in 2013 is critical to maintaining momentum on this important transit project.
Metrorail is estimated to transport 45% to 55% of DowntownDC BID’s daily population of 230,000 workers, visitors and residents. Maintenance repairs and inconveniences appear to have impacted Metrorail ridership to the DowntownDC BID area, particularly on weekends.
4 Year in Review 2011 State of Downtown Year in Review
DC has stabilized its regional employment and population market shares.
DC is Maintaining its Regional Employment and Population Market Shares
Over the past few years, DC has stabilized (and even slightly increased) its regional employment and population market shares. As the DowntownDC BID area is at 94% of its full build-out, it will not increase its regional market shares over the next 10 to 15 years, but its successes will continue to spin off into the city’s emerging areas. These areas, including St. Elizabeths East and West campuses, Poplar Point, Hill East, McMillan Reservoir and Walter Reed, will enable DC to maintain it regional market shares for another 10 to 15 years.
DC Employment (1) Percent of DC Area Employment (Thousands)
728 800 80%
600 711 60%
400 40%
24%24% 24% 200 20%
0 0 50 60 70 80 90 00 10 11 50 60 70 80 90 00 10 11
Sources: US Census, Bureau of Labor Statistics and Center for Regional Analysis at George Mason University (1) Annual average; not seasonally adjusted.
DC Population Percent of DC Area Population (Thousands)
800 80%
618 802 572 600 60% 53% 638 602 46% 46%
400 487 40%
18% 200 20% 279 12% 11% 11%
0 0 1900 10 20 30 40 50 60 70 80 90 2000 10 11 1900 10 20 30 40 50 60 70 80 90 2000 10 11
Sources: US Census, Bureau of Labor Statistics and Center for Regional Analysis at George Mason University and the DowntownDC BID
DowntownDC Business Improvement District 5 Downtown is the City’s Economic and Fiscal Engine
Though rapidly being consumed by development in the entire Center City, the DowntownDC and Golden Triangle BID areas are the economic and fiscal engines of DC. With an estimated 35% to 40% of the city’s employment, and 50% to 60% of the city’s wages, these two areas contribute 23% of DC local tax and other revenues while requiring only 9% of DC local expenditures.
In particular, the city’s commercial property tax revenues have grown from 11% of gross local tax revenues to 22%. Approximately 35% of the city’s private office space is located in the DowntownDC BID area.
Downtown is the Fiscal Engine of DC Downtown’s Net Fiscal Impact, FY 2012
DowntownDC BID Area In Millions 4 DC Local Tax and Other Revenues $970 NW
3 Estimated Fiscal Costs –404 1 5 Net Fiscal Impact $566 2 NE Golden Triangle BID Area Downtown 6 7 generates an DC Local Tax and Other Revenues $448 $846 million 8 Estimated Fiscal Costs –168 net fiscal Net Fiscal Impact $280 budget benefit SE per year for SW Washington, DC # Ward Numbers Total Downtown Area Ward Boundaries Quadrants DC Local Tax and Other Revenues $1,418 Estimated Fiscal Costs –572 Net Fiscal Impact $846
Like most Downtowns, DC's Downtown Revenue Share of Total DC Gross Local Revenue 23% Downtown is the economic and fiscal of $6.07 billion in FY 2012 engine of the city. Source: DowntownDC BID
The CityCenter project is being built on city-owned land. As a result, upon completing Phase I, the city will take in $30 million per year in new tax revenues.
6 Year in Review 2011 State of Downtown Downtown and DC Face Significant Regional Competition Year in Review
The regional competition that DC faces has increased over the past 10 years as the office rent differential between DC and Northern Virginia and Suburban Maryland has increased (see chart on page 26). In addition, these competitors are investing in creating “urban places” that compete on amenities as well as costs (the Rosslyn— Ballston Corridor, Bethesda, Alexandria, Silver Spring, Reston Town Center, and National Harbor— with plans for Crystal City, Potomac Yards, Tysons Corner, North Bethesda/Rockville, New Carrollton, Konterra, and Prince George’s eight other Metro stations).
(1) Regional Commercial Real Property Tax Rates, Fiscal Year 2013 (Proposed as of March 2012) 2.0%
1.882%
1.5% DC’s commercial property 1.435% 1.412% 1.455% and income taxes are 1.230% substantially greater than its 1.146% 1.183% 1.0% 0.998% regional competitors. DC’s commercial property taxes account for $5 to $10 per SF 0.5% of the $10 to $20 per SF office rent differential between DC
0.0 and Northern Virginia and DC (2) Alexandria Crystal City Rosslyn Tysons Reston Bethesda Silver Spring Suburban Maryland. ARLINGTON FAIRFAX MONTGOMERY
Virginia Maryland
(1) Includes base tax rate plus BID taxes, stormwater fees/taxes, the Silver (2) First $3 Million of assessed Line special assessment and Arlington and Fairfax transportation taxes. value is taxed at 1.65%
Sources : DC Mayor's Budget, Virginia Department of Planning and Budget and Maryland Department of Budget and Management
The city's 9.975% corporate income tax rate is 67% higher than Virginia's 6% corporate income tax rate, and 20% higher than Maryland's 8.2% corporate income tax rate.
Regional Commercial Income Tax Rates, Fiscal Year 2013 (Proposed as of March 2012)
10% 9.975%
8% 8.25% 8.25% A private corporation with annual pre-tax income of $25 million to 6% 6.0% 6.0% 6.0% $100 million could save $1 million to $4 million per year in income 4% tax by moving to Virginia, and $450,000 to $1.8 million per year 2% by moving to Maryland.
0 DC Alexandria Arlington Fairfax Montgomery Prince George’s Virginia Maryland
Sources : DC Mayor's Budget, Virginia Department of Planning and Budget and Maryland Department of Budget and Management
DowntownDC Business Improvement District 7 Regional development capacity is more than 650 million SF, with DC accounting for only Regional Development Capacity 120 million SF. Thus, the region could grow (As of April 2012) SF SF at 15 million to 20 million SF per year for 25 (MM’s) (MM’s) years without any growth in DC. This is what Downtown 10 Maryland 240 happened for the most part, and particularly I-270 Corridor 100 Rest of DC 112 Other Montgomery County 40 for market-rate multi-family development, from Center City 46 PG County 100 1985 to 1997 when Bethesda and Arlington saw Large Projects 18 great growth and DC saw significantly Neighborhoods 48 Virginia 300 less growth. Tysons Corner 150 Other NoVa 150
Total for DC 122 Total for MD and VA 540
Source: DowntownDC BID
When Metrorail opens at Tysons Corner in the second half of 2013/ first half of 2014, it will enable Tysons office buildings to compete for GSA leases and make Tysons 150 million SF of development capacity highly marketable for both office and residential development.
Partnerships with both the DC and federal governments have been, and will continue to be, critical to Downtown’s future. The federal government accounts for 43% of the DowntownDC BID area's employees in 16 million SF of owned space and almost 7 million SF of rented space (34% of total office space in the DowntownDC BID area). Since 1997, the DC government has invested $505 million in net economic development in the DowntownDC BID area and seen excellent returns on its investments: $12.4 billion of private and federal government development, 61,000 jobs, and new annual taxes of $427 million by 2012. The federal government’s recent decision to redevelop the Old Post Office Pavilion into a hotel will add much needed on street vitality to Pennsylvania Avenue, while producing 200 permanent jobs and $12 million of annual tax revenues. Redeveloping the FBI headquarters site would present an exciting opportunity to improve the regional economy by moving the current staff at FBI headquarters to a new location and engage in a public process to determine the site’s best use. In addition, redeveloping the Franklin School (DC-owned) and Webster School (GSA-owned) would present opportunities to grow employment and tax revenue in Downtown and DC.
8 Year in Review 2011 State of Downtown Current Current Development Development
In 2011, development in DowntownDC and the city continued to move back to 1999 – 2007 activity levels. In the DowntownDC BID area, $1.8 billion is being invested in 17 projects under construction as of December 31, 2011.
Total Value of DowntownDC BID Area Projects Under Construction, 1994-2011 (1) (Billions of $) $3.0
$2.5 $1.8
$2.0 $1.2 $1.5
$1.0
$0.5
$0.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Value (Billions of $) $0.3 $0.5 $0.9 $0.8 $1.3 $1.5 $2.1 $2.4 $3.0 $2.0 $1.9 $1.9 $2.2 $1.5 $1.0 $0.2 $1.2 $1.8
# of projects 1 5 7 1216202427253127232119164 1417
Source: DowntownDC BID (1) Includes the Marriott Marquis Convention Center Headquarters Hotel.
Two of Downtown's biggest projects since 1990 were under construction in 2011, with the DC government as a critical partner in both.
Two of the city’s three largest current construction projects—CityCenterDC and the Marriott Marquis Convention Center Headquarters Hotel—are in or bordering the DowntownDC BID area. The projects are two of the seven largest undertaken in DC in the past 25 years. They are the capstones to Downtown’s revitalization, bringing additional vitality and the DowntownDC BID area’s total build-out to 96%, not to mention $50 million to $70 million in new annual taxes and 4,500 permanent jobs. The DC government is a strong and supportive partner of both projects.
DowntownDC Business Improvement District 9 DowntownDC BID Area Projects Completed, 1997-2011 (1) (Billions of $) $10.9 $12 $10.4 $10.6 $9.6 $8.7 $10 $7.6 $6.7 $8 $6.1 $4.9 $6 $3.3 $2.4 $4 $1.6 $1.9 $1.2
$2 $0.4
0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 By year $0.4 $0.8 $0.4 $0.3 $0.5 $0.9 $1.6 $1.1 $0.7 $0.8 $1.1 $0.9 $0.8 $0.2 $0.3
NUMBER OF PROJECTS COMPLETED 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total 639710161318161214151557 By year 6 9 18 25 35 51 64 82 98 110 124 139 154 159 166
Source: DowntownDC BID (1) Numbers may not add up due to rounding.
The federal government continues to be a strong development partner in the DowntownDC BID area. Currently, GSA is managing multi-million dollar renovations at the Commerce Department and the Export-Import Bank. In early 2012, the GSA selected Trump Hotel Collection to renovate the Old Post Office Pavilion and its annex.
Old Post Office Project Summary
$200 Million Project 375,000 SF Renovation 250-300 Hotel Rooms Plans include restaurants, banquet, ballroom and meeting facilities, the Spa at Trump®, a library, a curated museum, an exhibition gallery, and indoor and outdoor gardens Groundbreaking: 2014 Completion: 2016 Developer Partner for GSA: Trump Hotel Collection
Source: DowntownDC BID
The Old Post Office Pavilion’s redevelopment will add much needed street life to a currently lackluster section of Pennsylvania Avenue.
10 Current Development 2011 State of Downtown Current Development Marriott Marquis Convention Center Headquarters Hotel Overview
$550 million project 1,175 rooms 128,000 SF Ballroom/Meeting Space Six restaurants/bars 779 seats total 31,000 SF of retail 400 parking spaces 1.3 million gross SF 83,000 SF parcel of land Underground walkway to Convention Center The $550 million Marriot Marquis received tax 14 floors increment financing (TIF) and will generate Groundbreaking date: Nov. 10, 2010 approximately 800 permanent jobs and $21 million in Projected completion date: 2014 annual taxes once completed — substantially more Source: DowntownDC BID tax revenue (and sooner) than if it were developed as a residential building, as it was previously zoned.
The city provided the CityCenterDC project a land subsidy in the form of a “below office market only ground lease” in exchange for affordable housing (92 on-site, a $9.2 million contribution to the city’s Housing Production Trust Fund), 750 public parking spaces, and 335,000 SF of “unique” and local retail. While the ground lease might be less than an all-office development, the individual and sales tax revenues will be much higher in the mixed-use project, and the reduced office square footage will help keep office rents and values higher than they would otherwise be. The CityCenterDC project requirements resulted from a multi-year planning process in 2001 – 2002 led by the DC Office of Planning and the DowntownDC BID.
Phase I of CityCenterDC is under construction (see cover).
CityCenterDC Project Summary Source: DowntownDC BID
Phase One Phase Two Phase Three Total Use Investment $700 million $140 million $200 million $1,040 million Office 520,000 SF – 560,000 SF 1,080,000 SF Hotel – 350 Rooms – 350 Rooms Retail 185,000 SF 110,000 SF 40,000 SF 335,000 SF Apartment 458 Units – – 458 Units Condominium 216 Units – – 216 Units Retail/Public Parking 525 Spaces 225 Spaces 0 Spaces 750 Spaces Office/Residential Parking 1,045 Spaces 110 Spaces 330 Spaces 1,485 Spaces Groundbreaking Date April 4, 2011 1Q 2014 Not Established NA Completion Date 3Q 2013 Office 4Q 2015/ Not Established NA 4Q 2013 Retail/ 1Q 2016 Residential DeveloperHines/Archstone Hines/Archstone Gould Property
DowntownDC Business Improvement District 11 LIGHTWELL PENTHOUSE & NEW SCREEN BEYOND LEVELS Martin Luther King Jr. NEW Library Project Summary LEVELS 6 6 TENANT $200-350 Million Project 5 5 LEVELS
4 4 440,000 GSF renovation LIBRARY LEVELS 3 3 Possible 100,000 GSF Addition
2 2 225,000 GSF Library LIBRARY GREAT TENANT LOBBY 1 G PLACE LOBBY HALL 215,000-315,000 GSF Other Use G STREET 1 Groundbreaking: 2015-2017 A A PARKING Completion: 2017-2019 B B Developer Partner for DC: TBD LIBRARY NON-LIBRARY USE Source: DowntownDC BID The most compelling option for renovating the city’s Martin Luther King Library is that the library share the building with another user(s) as shown in the concept diagram above.
The DC Government is studying how best to revitalize the tired looking Martin Luther King Jr. Memorial Library, which has lacked proper maintenance since opening in 1972. Because the central library needs an estimated $200 million to $250 million in renovations to address deferred maintenance problems, the city convened an Urban Land Institute (ULI) panel to assess available options for its redevelopment. The likely consensus will be that the library remain in its current building with space reserved for other use. The total project costs are likely to be $300-350 million, leading to a vibrant, new central library that serves as a community center for DC and Downtown; the restoration of DC’s only building by famed architect Mies van der Rohe; and the additional user(s) of new, non-library space will contribute to Downtown’s vitality and the DC tax base.
The final large scale project in the DowntownDC BID area is likely to be Capitol Crossing, the exciting project by Property Group Partners (formerly the Louis Dreyfus Property Group) which will build a $1.3 billion air rights development over Interstate 395, south of Massachusetts Avenue, NW, and north of E Street, NW. Capitol Crossing will be built mostly in the air rights over I-395 in Downtown’s East End (see page 61 for rendering)
Capitol Crossing Project Summary (I-395 Air Rights) Platform North Block Center Block South Block Total
Use $300 million $430 million $170 million $350 million $1,250 million Office - 888,250 GSF 276,688 GSF 698,062 GSF 1,863,000 GSF Retail - 22,064 GSF 20,623 GSF 20,000 GSF 62,687 GSF Residential - - 150 Apts - 150 Apts Holy Rosary Church & Casa Italiana (1) - - 22,954 GSF 50,214 GSF 73,168 GSF Parking - 1,146 spaces - - 1,146 spaces Groundbreaking Date 2013 2014 2016 + 2016 + - Completion Date 2016 2016 2018 + 2018 + -
Source: DowntownDC BID (1) Entails moving existing buildings and construction of new space.
12 Current Development 2011 State of Downtown Final build-out of the DowntownDC BID area is expected to be Current Development underway by 2017.
DowntownDC BID Area Surface Parking Lots and Redevelopment Sites, 1997 and April 2012
Dunbar Scott N ST. High N ST. Circle School
Thomas 6TH ST. 5TH ST.
12TH ST. 11TH ST. 10TH ST. N. CAPITOL ST. Circle M ST. Walter E. NEW YORK AVE. Washington Convention Center
AVE. L ST. NEW JERSEY A L S T. L ST. 395
VERMONT 13TH ST. K S T. Mt. Vernon K S T.
Square VE. McPherson Franklin Square Square EYE ST. EYE ST. CityCenterDC (Coming) NEW YORK AVE. NE H ST. H ST. H ST.
Lafayette 15TH ST. 1ST ST. Square General G PLACE Accounting G ST. Office G ST. MCI G ST. Portrait Center NEW JERSEY AVE. Union Gallery
3RD ST. Station White F ST. House
E ST. E ST. 13TH ST. FBI 2ND ST. 11TH ST. 10TH ST. 6TH ST. 5TH ST.
PENNSYLVANIA AVE. D ST. 1ST ST. Ronald 7TH ST. Dept. The Ellipse Reagan INDIANA AVE. of Labor Buiding C ST.
DELAWARE AVE. 9TH ST. CONSTITUTION AVE.
The Existing and Occupied Development Since 1997 on: Remaining Development sites on: Capitol Buildings in 1997 Parking Lots Redevelopment Sites Parking Lots Redevelopment Sites 0 N 1000 Source: DowntownDC BID Metro FEET
Only 16 development sites, accommodating 5 million SF, remain in the DowntownDC BID area. Since 1997, 55 surface parking and empty lots have been developed, and an additional 37 sites have been redeveloped.
The Marriot Marquis hotel is currently under construction.
DowntownDC Business Improvement District 13 674 residential units are currently under construction in the DowntownDC BID area.
Development Use Overview for DowntownDC BID Area, 1997–2016 (1)
Under Construction Completed 1997–2010 at 12/31/11 (2) Planned % of SF % of SF % of SF Total Development # By Use # By Use # By Use Number of projects 166 projects 17 projects 22 projects Dollar Value $10.9 billion $1.8 billion $3.4 billion Square Feet 33.8 mil SF 100% 5.0 mil SF 100% 6.6 mil SF 100%
New Projects – Square Feet 24.0 mil SF 71% 2.6 mil SF 53% 4.3 mil SF 64% Renovated Projects – Square Feet 9.8 mil SF 29% 2.3 mil SF 47% 2.4 mil SF 36%
Private Office Space – New 11.2 mil SF 33% 0.6 mil SF 12% 2.7 mil SF 40% Private Office Space – Renovated 4.6 mil SF 14% 0.8 mil SF 16% 0.5 mil SF 8%
Residential Units – New 3,506 units 674 units 150 units 3.7 SF 11% 0.8 SF 17% 0.2 SF 3% Residential Units – Renovated 40 units 385 units 0 units 0 SF 0% 0.2 SF 5% 0 SF 0%
Hotel Rooms – New 992 rooms 2% 1,175 rooms 17% 660 rooms 4% 0.6 SF 0.8 SF 0.3 SF Hotel Rooms – Renovated 3,432 rooms 6% 897 rooms 10% 0 rooms 0% 1.9 SF 0.5 SF 0 SF
Convention Center 2.3 mil SF (3) 7% 0 mil SF 0% 0 mil SF 0%
Arts, Entertainment and Museums – New 0.8 mil SF 2% 0 mil SF 0% 0 mil SF 0% Theaters 1,264 seats – 0 seats – 0 seats – Cinemas 23 screens – 0 screens – 0 screens –
Arts, Entertainment and Museums – Renovated 0.4 SF 1% 0 SF 0% 0 SF 0% Theaters 650 seats – 0 seats – 0 seats – Cinemas 0 screens – 0 screens – 0 screens –
Retail 1.6 mil SF 5% 0.2 mil SF 5% 0.3 mil SF 4%
Federal and City Projects – New 2.9 mil SF 9% 0 mil SF 0% 0.2 mil SF 3% Office 2.8 mil SF 8% 0 mil SF 0% 0 mil SF 0% Other 0.1 mil SF 0% 0 mil SF 0% 0.2 mil SF 3%
Federal and City Projects – Renovated 3.0 mil SF 9% 0.7 mil SF 15% 1.9 mil SF 28% Office 1.6 mil SF 5% 0.7 mil SF 14% 1.3 mil SF 19% Other 1.4 mil SF 4% 0 mil SF 0% 0.6 mil SF 9%
To Be Determined NA NA NA NA 0.5 8%
Other 0.7 mil SF 2% 0.2 mil SF 3% 0.2 mil SF 3%
(1) Numbers may not add due to rounding. (2) Includes the Marriott Marquis Convention Center Headquarters Hotel and I-395 air rights. (3) Including 703,000 SF exhibit space; 150,000 SF meeting space; 40,000 SF registration space; 45,000 SF of office and a 52,000 SF ballroom.
Source: DowntownDC BID
14 Current Development 2011 State of Downtown Current Development
Largest Development Projects in DowntownDC BID Area Since 1990 Size 2012 $ SF Date of Project Name (Millions) (Thousands) Completion 1. Ronald Reagan Building $1,448 2,200 1998 2. Walter E. Washington Convention Center 1,256 2,300 2003 3. CityCenterDC Phase One 700 1,300 2013 4. Verizon Center 593 560 1997 5. Marriott Marquis Convention Center Headquarters Hotel (1) 520 980 2014 6. Newseum 486 497 2008 7. National Portrait Gallery and Smithsonian American Art Museum 379 380 2006 8. Gallery Place (Office, Housing, Entertainment and Retail) 368 715 2004/5 9. Terrell Place (575 7th St, NW) 236 476 2003 10. 1101 New York Avenue, NW 205 390 2007
Largest Development Projects in DC Since 1990 Located in the DowntownDC BID area.
1. Ronald Reagan Building $1,448 2,200 1998 2. Walter E. Washington Convention Center 1,256 2,300 2003 3. Capitol Visitors Center and Expansion 718 580 2008 4. Nationals Park 707 NA 2008 5. CityCenterDC Phase One 700 1,300 2013 6. Constitution Square Phase One (Office, Hotel, Apartments and Retail) 630 1,600 2010 7. Verizon Center 593 560 1997 8. Marriott Marquis Convention Center Headquarters Hotel (1) 520 980 2014 9. Newseum 486 497 2008 10. Coast Guard Headquarters at St Elizabeth West Campus 450 1,180 2014
Source: DowntownDC BID (1) Included in the DowntownDC BID area for this table's purposes.
The Verizon Center opened in December 1997. It was one of the largest development projects in Washington, DC, and served as a catalyst to the DowntownDC BID area's revitalization.
DowntownDC Business Improvement District 15 Federal Projects in DowntownDC BID Area and DC, 1998–2020 (1) (Millions of $) DowntownDC BID Area $3,186 $3,000 Cumulative total value of federal projects Value of GSA projects by year $2,348 $2,500 Value of Non-GSA projects by year
$2,000
From 1998 through $1,500 $2,017
2011 the federal $1,000 government $500 invested $2 billion 0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Under Planned Construction in new construction GSA Funding as a Total 100% 100%of Federal Funding 53% 45%20% 100% 92% 100% and substantial Total GSA Funding is 71% of Total Federal Funding To Date. renovations in the $11,630 DowntownDC BID $12,000 Rest of DC Cumulative total value of federal projects area, with another Value of GSA projects by year $9,000 Value of Non-GSA projects by year $4,780 $1.2 billion under $6,000 construction or $3,437 planned. $3,000
0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Under Planned Construction GSA Funding as a Total of Federal Funding 88%10% 12% 96% 14% 100% 13% 32% 84% 70%
Total GSA Funding is 33% of Total Federal Funding To Date.
(1) Includes GSA, Smithsonian, National Park Service, Architect of the Capitol and Supreme Court.
Sources: WDCEP, DowntownDC BID
Only 5 million SF of development capacity remains in the DowntownDC BID area. DC’s development capacity is estimated at 100 million SF to 120 million SF, of which 100 million SF to 110 million SF should generate $800 million to $1 billion in annual property taxes.
DC Development Overview: Past, Present and Future, April 2012
Completed Projects Under Construction Planned 1997–2011 Billions Share of DC Billions Share of DC Billions Share of DC DowntownDC BID $10.9 27% $1.8 20% $3.4 8%
Rest of Center City 13.8 39% 3.6 40% 19.5 43%
Rest of Central DC (1) 5.8 17% 1.5 16% 5.4 12%
Rest of DC 5.4 16% 2.2 24% 16.8 37%
TTotalotal DDCC $35.$35.99 100100%% $9.$9.11 1100%00% $45.1 100%
Share of All Development 29% 7% 37%
(1) Central DC includes the area to the north of Center City bounded to the west, north and east by the Potomac, Georgetown, Columbia Heights, 20th Street and Benning Road NE, Hill East and the Anacostia
Source: Washington DC Economic Partnership and the DowntownDC BID
16 Current Development 2011 State of Downtown Employment Employment
In 2011, DC employment grew by 15,900, to 727,900, or 2.2%—a very impressive number. The DowntownDC BID area employment grew by 1,000, to 183,000, or 0.5%.
LivingSocial’s explosive growth of 700 new employees from January 2011 through April 2012—for a total of approximately 950 employees in six DowntownDC BID area locations occupying 134,000 SF—led the way for Downtown’s 2011 employment growth. In addition, employment growth came from seven net new restaurant openings and two new entertainment venue openings; an acceleration in the number of professional firms opening DC offices for the first time, particularly law firms and wealth management firms; and several large construction projects. This growth more than offset the employment loss from the Howery LLP law firm closing in March 2011 (720 employees); the Carlyle Group moving 70,000 SF occupied by its back office to Rosslyn; and Filene’s Basement closing its 56,000 SF store in the National Press Building.
25% of all DC jobs are located in the DowntownDC BID area.
(1) (2) DowntownDC BID Area Employment 198 (Thousands) 183 186 200
150 176 182 164
100 137 120 PROJECTION
50
0 96 01 03 06 08 10 11 12 13 14 15 16
Years analyzed by Center for Regional Analysis at George Mason University
(1) Figures are for the 4th quarter of each year. (2) Data is based on former BID boundaries which included an area ceded to NoMa in 2008.
Sources: Center for Regional Analysis at George Mason University for 1996, 2001, 2003, 2006, 2008 and 2010. Downtown BID for 2011-2016.
LivingSocial is now Downtown’s largest private corporate employer. Its recent growth is being funded by $575 million in venture capital raised From 2007 through 2011, DC employment grew by 40,200 in late 2010 and early 2011. compared to 34,200 new jobs in Virginia and a loss of 24,100 jobs in Maryland.
DowntownDC Business Improvement District 17 Access to mass transit is a major competitive advantage in attracting office tenants and other employers to Downtown. Downtown and DC have four major competitive advantages in attracting office tenants:
DC Employment Change UÊ Proximity to the federal History and Projection, 1991-2015 (1) government
Increase or Decrease in Jobs (Thousands) UÊ Access to mass transit 25 PROJECTION UÊ Access to the region’s labor force 20 UÊ Quality amenity base of hotels, restaurants, cultural venues, 15 entertainment 10
5
0 Regional Employment Change (1) -5 History and Projection, 1991-2015 2011 gain: 15,900 jobs -10 Increase or Decrease in Jobs (Thousands) DC Suburban Maryland Northern Virginia -15 120
-20 PROJECTION 91 93 95 97 99 01 03 05 07 09 11 13 15 90 2011 total gain: (1) Annual average; not seasonally adjusted. 46,700 jobs Sources: Bureau of Labor Statistics and the 60 Center for Regional Analysis at George Mason University (projection)
30
DC has recently experienced 0
job growth above consensus -30
employment projections, leading -60 to a modest increase in DC’s 91 93 95 97 99 01 03 05 07 09 11 13 15 (1) Annual average; not seasonally adjusted. regional employment market share. Sources: Bureau of Labor Statistics and the Center for Regional Analysis at George Mason University (projection)
18 Employment 2011 State of Downtown Employment
(1) Regional Job Change by Year, 2008–2011 (1) Regional Job Change, 1996-2011 (Thousands) (Thousands)
Suburban Northern 352.4 DC Maryland Virginia
25.0
15.9 10.1 10.3 11.8 5.8 153.9 3.6
-2.3 -3.9 -6.5 64.6 40.2 34.2 -24.1 -22.2 -25.3 DC Suburban Northern DC Northern Maryland Virginia Suburban Virginia Maryland
08 09 10 11 08 09 10 11 08 09 10 11 1996-2006 2007-2011
(1) Based on annual average; not seasonally adjusted. (1) Based on annual average; not seasonally adjusted. Source: Bureau of Labor Statistics Source: Bureau of Labor Statistics
Employment in the DowntownDC BID Area, DC and the Region, 1996–2010 (1) (2)
Employment (Thousands) 2008–2010 Change 1996–2010 Change
2010 2008 2006 2003 2001 1996 Thousands % ChangeThousands % Change
DowntownDC BID Area (3) 182 180 176 164 137 120 3 1 % 62 52 % Rest of Downtown 197 193 190 191 204 188 4 2 9 5 Downtown Total 379 373 366 355 342 308 6 2 71 23 Rest of DC 331 331 322 310 312 315 0.4 0.1 16 5 DC Total 710 704 688 666 654 623 6 1 % 87 14 % Suburban Maryland 938 969 968 939 924 814 – 31 – 3 125 15 Northern Virginia 1,301 1,315 1,295 1,167 1,162 948 – 14 – 1 353 37 Region Total 2,949 2,987 2,950 2,771 2,740 2,384 – 38 – 1 % 565 24 %
(1) Employment figures are for (2) This data is produced (3) Data is based on former BID boundaries which the 4th quarter of each year. every two years. included an area ceded to NoMa in 2008.
Sources: InfoUSA Data (DowntownDC BID area and total Downtown), Bureau of Labor Statistics (DC, Md. and Va.), Center for Regional Analysis at George Mason University
DowntownDC BID area businesses and organizations employ approximately 183,000 workers.
DowntownDC Business Improvement District 19 DC as a Share of Regional Job Change, 2000–2011 (1)
200%
150%
100%
The Government Accountability Office’s 535 50% G Street, NW, headquarters building occupies almost an entire city block, with 615,000 SF NA 0 of office space, and is home to an estimated 00 01 02 03 04 05 06 07 08 09 10 11 2,000 employees. (2) (1) Based on annual average; not seasonally adjusted. (2) In 2009, DC lost 2,300 jobs and the region lost 49,800.
Source: Bureau of Labor Statistics
Washington, DC, is projected to add 28,000 new jobs during 2012 - 2015.
Employment History and Projection for DC and Region, 1991-2015 (1)
DC Suburban Maryland Northern Virginia
Number of Jobs (Thousands) Employment Market Share 1,398 1,500 1,304 1,329 50% 44% 44% 45% 42% 1,162 36% 34%
1,200 40% 943 986 938 32% 31% 31% 813 758 924
900 30% 34%
30%
600 728 756 20% 24% 24% 24% 24% 712 677 654
300 10%
PROJECTION PROJECTION
0 0 91 93 95 97 99 01 03 05 07 09 11 13 15 91 93 95 97 99 01 03 05 07 09 11 13 15
Sources: Bureau of Labor Statistics and the Center for Regional Analysis at George Mason University (1) Annual average; not seasonally adjusted.
20 Employment 2011 State of Downtown Employment
The Ronald Reagan Building and International Trade Center's 2.2 million SF space is home to an estimated 5,000 federal employees.
Employment in DC — Private and Government Shares, 1990-2011 (Based on annual, not seasonally adjusted data) Private Sector Federal Government Local Government
80% 66% 66% 60% 60% 32% 40% 28% 29%
20% 8% 6% 5%
0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Source: Bureau of Labor Statistics
The federal government is directly responsible for 30% of DC’s employment. The DowntownDC BID estimates another 30 - 40% of DC jobs are directly dependent on federal procurement or interaction. Of the remaining jobs, 20% - 25% serve both DC and regional residents and only 5% - 10% are located in DC by choice (that is, these jobs could be located in other cities in the U.S. or the world).
DowntownDC Business Improvement District 21 Employment DowntownDC BID Area Greater Downtown Center City DC By Sector and Location, 2010 Share of Share of Share of Share of Employees Area DC Employees Area DC Employees Area DC Employees Area DC Government 76,400 43% 31% 112,500 30% 46% 192,500 42% 78% 245,700 35% 100%
Federal 70,400(1) 40 34 NA NA NA NA NA NA 209,600(2) 30 100
Local 6,000(1) 3 17 NA NA NA NA NA NA 36,100 (2) 5 100 Legal Services 19,400 11 60 28,400 7 87 29,100 6 90 32,500 5 100 Other Professional & Business Services 29,500 16 26 84,700 22 74 80,900 18 71 114,200 16 100 Associations & Other Services 14,500 8 22 43,900 12 68 41,000 9 63 64,600 9 100 Leisure & Hospitality 11,900 6 23 30,000 8 57 31,400 7 60 52,400 7 100 Information & Publishing 8,500 5 46 16,600 4 89 16,700 4 90 18,600 3 100 Retail Trade 3,100 2 17 7,700 2 42 7,500 2 41 18,200 3 100 Financial Services 2,900 2 18 13,600 4 82 12,900 3 78 16,500 2 100 Health Services 2,800 2 5 16,800 4 28 14,900 3 25 60,000 8 100 Construction 1,800 1 17 2,900 1 28 6,100 1 58 10,500 1 100 Real Estate Services 1,500 1 15 7,200 2 72 7,500 2 75 10,000 1 100
Education Services 1,400 1% 3% 5,800 2% 12% 5,800 1% 12% 48,400 7% 100% Other 5,600 2 29 8,800 2 46 12,000 2 62 19,300 3 100 Total 179,300 100 25 378,900 100 53 458,300 100 64 710,900 100 100
(1) DowntownDC BID estimate. (2) Adjusted Bureau of Labor Statistics data. Sources: US Bureau of Labor Statistics, InfoUSA, Center for Regional Analysis at George Mason University, and the DowntownDC BID.
DC’s recent employment growth has been in healthcare, higher education, leisure/hospitality and government, while it has been losing jobs in the legal profession and among support staff. Downtown has shared in the growth of leisure/hospitality, government and other job growth sectors such as professional business services and associations/ non-profit organizations.
(1) Employment Change in DC, Change
2000-2011 and 2008-2011 2011 2010-2011 2008-2011 2000-2011
Jobs Jobs % Jobs % Jobs % Government 247,700 800 0% 12,900 5% 23,700 11% Federal 212,600 2,000 1 18,800 10 29,000 16 State and Local 35,100 -1,200 -3 -5,900 -14 -5,300 -13 Legal Services 30,500 -1,400 -5 -5,700 -16 -3,400 -10 Other Professional & Business Services 119,600 3,800 3 3,400 3 19,700 20 Associations & Other Services 67,400 2,000 3 2,100 3 10,400 18 Leisure & Hospitality 61,800 2,100 3 4,000 7 13,700 28 Information & Publishing 18,600 -100 -1 -2,300 -11 -6,900 -27 Retail Trade 18,500 100 1 0 0 1,000 6 Financial Services 16,400 -200 -1 -300 -2 -2,700 -14 Health Services 62,300 2,300 4 6,300 11 15,700 34 Construction 12,000 1,400 12 -1,000 -8 700 6 Real Estate Services 10,400 300 3 -1,000 -9 -500 -5 Education Services 52,900 5,000 9 6,800 15 12,100 30 Other 9,700 -200 NA -1,300 NA -6,000 NA Total 727,800 15,900 2% 23,900 3 % 77,500 12 % Average Yearly Increase NA 15,900 7,967 7,045
Source: US Bureau of Labor Statistics (1) Annual, not seasonally adjusted.
22 Employment 2011 State of Downtown Employment Unemployment Rate for DC, Number of Unemployed DC Residents, Region and Nation, 1990–2011 2000–2011 (As measured in December) (As measured in December, Not Seasonally Adjusted) 10.5% 10.1% 40 33,700 (1) (2) (1) 10% DC Regional National
9.9% 30 18,900 35,200
8% 8.5% 5.9% 20 5.6% 6.9% 6.2% 17,200 6% 10
6.3% 3.9% 5.5% 4.9% 0
4% 00 01 02 03 04 05 06 07 08 09 10 11
Source: Bureau of Labor Statistics 3.9%
2% 2.4% 2.9%
0% 91 93 95 97 99 01 03 05 07 09 11 Unemployment among DC residents remains very high. A promising solution is to target the 5% - 10% 20082009 2010 2011 annual job turnover/churn of 509,000 DC jobs held by DC 8.0% 10.5% 10.1% 10.1% suburban residents, thus providing 30,000 to 50,000 Region 4.6% 6.2% 5.7% 5.5% jobs at a variety of skill levels for unemployed DC residents each year. Nation 7.3% 9.9% 9.4% 8.5%
DC as % of nation 110% 106% 107% 119% Mayor Vincent C. Gray is to be complimented for DC as % of region 174% 169% 177% 184% focusing on job training and creating the “One Region as % of nation 63% 63% 61% 65% City, One Hire" program, which has begun the very difficult process of attacking low-skill unemployment. (1) Seasonally adjusted. (2) Not seasonally adjusted. 2011 regional unemployment rate uses the preliminary The program is making progress and deserves December data. continued support. Source: Bureau of Labor Statistics
DC Jobs Available to DC Residents, 2011 (1) 509,000 736,000 Jobs Held Jobs in DC By Non-DC Residents That Are 342,000 Potentially Total DC Available Workforce 82,000 for DC 33,000 Employed Residents Unemployed Outside DC Residents Of DC 309,000 Employed 227,000 DC Residents Employed In DC Jobs in DC DC Workforce DC Resident Employment
(1) Data for DC residents employed outside of DC is 2010 annual Census information. All other data is for December 2011, not seasonally adjusted.
Sources: Bureau of Labor Statistics, U.S. Census Bureau, and the DowntownDC BID
DowntownDC Business Improvement District 23 Office Market
The DowntownDC BID area and DC office markets performed well in 2011. All standard office market performance measures (rents, vacancy, absorption, development and sales price) were strong. In 2011, Market Square (701 and 801 Pennsylvania Avenue, NW) sold for $905 per SF, a record price for both the DowntownDC BID area and DC. And despite higher market rents and property tax rates, the Downtown DC and DC office markets remained the strongest office sub-markets in the region in 2011. This trend continued in the first quarter of 2012.
Class A office asking rents rose in both Downtown and DC, 4% and 8%, respectively, but overall rents fell slightly. Vacancy rates for all building types in Downtown and DC remained flat or declined modestly. Office absorption was 150,000 SF in the DowntownDC BID area in 2011, and 1.9 million SF for all of DC. This compared to negative absorption for all building types in both Suburban Maryland and Northern Virginia office markets, (190,000 SF) and (940,000 SF), respectively.
The DowntownDC BID area lost some major office space when the Howery LLP law firm closed, vacating close to 300,000 SF, and the Carlyle Group rented 70,000 SF for its back office operations in Rosslyn. These losses, however, were offset by office space gains from LivingSocial’s strong growth, regional law and investment management firms opening new DC offices, the federal government modestly consolidating suburban locations, and DC non-profit organizations and associations’ internal growth.
Law Firms Moving to DC From Outside the DC Region, 2011-2012
Move to the DowntownDC BID Area
Law Firm Name Based in 1. Allen & Overly London, UK 2. Bass Berry & Sims Nashville, TN 3. Becker & Poliakoff Miami, FL 4. Dinsmore & Shohl Cincinnati, OH 5. Gordon & Rees San Francisco, CA 6. Mitchell, Williams, Selig, Gates & Woodyard Little Rock, AR 7. Nelson Levine de Luca & Horst Philadelphia 8. Quinn Emanuel Urquhart & Sullivan Los Angeles, CA Estimated SF Occupied is 70,000 to 100,000 SF
Moves Into DC, Outside the DowntownDC BID Area
Law Firm Name Based in 1. Best Best & Krieger Riverside, CA 2. Fredericks Peebles & Morgan Omaha, NE 3. Miles & Stockbridge Baltimore, MD 4. Quarles & Brady Milwaukee, WI 5. Sedgwick KKP San Francisco, CA Market Square offices sold for a Estimated SF Occupied is 25,000 to 50,000 SF DC record price of $905 per SF in
Source: DowntownDC BID March 2011.
24 Office Market 2011 State of Downtown Office Market DowntownDC BID Area Office Market Overview: 66 Million SF Private (46.4 MM SF) Government (19.2MM SF)
DC Government 2% Rented to Non GSA Non-GSA Federal GSA is the DowntownDC 3rd Parties Government 1% BID area’s largest office user, 51% Foreign Government, followed by association/non- International Organizations profit organizations, government and Other Local Governments 3% relations offices, law firms and professional service firms. The Owner- Occupied largest corporate employers are 10% GSA occupies 33% of LivingSocial, Pepco, Washington the office space in the Gas and Blackboard. GSA 23% DowntownDC BID area. Rented to GSA 10% Source: DowntownDC BID
Looking forward, both the DowntownDC BID area and DC office markets face multiple near-term threats: One million to two million SF of vacant space in Crystal City in 2012 and 2013 caused by the Base Realignment and Closure (BRAC) Commission, which moved defense operations out of that area to more secure office space in other Northern Virginia locations and a few Maryland locations. The impact of this move might be mitigated by some office buildings' conversions into residential buildings or delays in renovating now-vacant Class B buildings into Class A properties. Law firms reducing their space requirements because they are moving back offices out of DC, no longer need a law library, or their partners now share support staff and are also willing to take smaller offices. GSA reducing its space requirements as it “unswings” swing space used while stimulus renovation projects were undertaken. The federal agency is also significantly reducing the amount of office space per employee, as it did recently for a portion of its DC regional headquarters at 700 D Street, SW. Sometime between the fourth quarter of 2013 and the first half of 2014, Metrorail will begin operations to Tysons Corner, which has 100 million to 150 million SF of development capacity.
DC Office Market Overview DowntownDC BID Rest of DC DC Total Millions Share Millions Share Millions Share of SF of Total of SF of Total of SF of Total TOTAL SPACE INVENTORY 65.6 100% 107 100% 172 100%
PRIVATE Rented to GSA 6.3 10% 12 11% 18 11%
Rented to Non GSA 3rd Parties 33.2 51 54 50 87 50
Owner-Occupied 6.9 10 5 5 12 7
Total private space 46.4 71% 71 66% 117 68%
GOVERNMENT GSA 14.8 23% 15 14% 30 18%
Other Federal Government 1.0 1 9 8 10 6
Foreign Government 0.2 <1 4 4 4 2
International Organizations 1.1 2 5 5 6 3
DC Government 1.7 2 3 3 5 3
Other Local Government 0.4 1 - 0 0 0 Source: DowntownDC BID Total government space 19.2 29% 36 34% 55 32%
DowntownDC Business Improvement District 25 The Veterans Administration GSA Office Space Analysis is one of the 27 January 2010 Owned Leased Total buildings that SF % of SF % of SF % of GSA owns in the (Millions) Region (Millions) Region (Millions) Region DowntownDC DC 33 SF 79% 22 SF 41% 55 SF 58% BID area. Suburban Maryland 6 14 11 21 17 18 Northern Virginia 3 7 20 38 23 24 Total 42 SF 100 % 53 SF 100 % 95 SF 100 % % of All Space 44 % 56 % 100 %
Source: General Services Administration (GSA)
Pew opened its DC office at 901 E Street NW, and also houses other As of April 2012, there are four office buildings non-profit organizations. under development in the DowntownDC BID area—three are speculative projects currently without lead tenants.
All of DC’s office markets benefit from a strong and growing Downtown office market, which pushes office demand and development into the Center City’s emerging areas. As of April 2012, three speculative office buildings (750,000 SF) in the DowntownDC BID area and two (500,000 SF) in NoMa are under development. No speculative office buildings are under development in the Mount Vernon Triangle or the Capitol Riverfront areas.
Regional Class A Office Asking Rent Per SF Comparison, 1993–2011 (At year-end)
DC Suburban Maryland Suburban Virginia DowntownDC BID Area Chevy Chase/Bethesda Rosslyn Central Business District $63 North Bethesda/Rockville (2) Ballston NoMa (1) Silver Spring Crystal City
$60 Capitol Riverfront Prince George’s County Tysons Corner/McLean $61 Reston/Herndon $49 $50 $52 $44 $44 $48 $42 $40 $35 $39 $29 $30 $30 $20 $23
$10
0 93 95 97 99 01 03 05 07 09 11 93 95 97 99 01 03 05 07 09 11 93 95 97 99 01 03 05 07 09 11
(1) NoMa is the Capitol Hill/NoMa Market, (2) In 2007, Cushman and Wakefield began tracking North Bethesda and Rockville as separate sub-markets. Data minus 3 dollars per SF. shown for 2008 and after is a weighted average (based on Class A inventory size) of North Bethesda and Rockville.
Source: Cushman and Wakefield
26 Office Market 2011 State of Downtown Office Market
Regional Overall Vacancy Comparison, 1995–2011 (At year-end) Suburban Virginia DC Suburban Maryland Crystal City DowntownDC BID Area Chevy Chase/Bethesda Rosslyn Central Business District Silver Spring Ballston NoMa (1) North Bethesda/Rockville (2) Reston/Herndon 30% Capitol Riverfront Prince George’s County Tysons Corner/McLean
24% 25% 20%
20% 16% 16% 17% 15% 12% 11% 13%
12% 10% 12% 11% 9% 10% 5%
0 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11
(1) NoMa vacancy is calculated from Cushman and Wakefield’s (2) In 2007, Cushman and Wakefield began tracking North Bethesda and Rockville as separate sub-markets. Data Capitol Hill/NoMa submarket by the Downtown BID. shown for 2008 and after is a weighted average (based on inventory size) of North Bethesda and Rockville.
Source: Cushman and Wakefield
DC needs to attract 17,000 new office workers to lower the city’s overall vacancy rate to 9%, a level at which broad office construction will be financed.
DC Overall Vacancy Rate Analysis, 1999–2012
18%
15% 12.6%
12%
11.9% 9%
5.0%
6%
PROJECTION
3%
0 99 00 01 02 03 04 05 06 07 08 0910 11 12 (1)
(1) Assumes that 50% of the 2 million SF under construction or renovation at the end of 4Q 2011 delivers in 2012 and is 50% leased. Non-office users of office space, such as the Sources: Cushman and Wakefield and the DowntownDC BID BASIS DC charter school at 412 8th St, NW, are improving the supply and demand dynamics of the DowntownDC office market. The school is affiliated with Arizona-based BASIS Schools, Inc.
DowntownDC Business Improvement District 27 Regional Overall Office Market Comparison, 1997–2011 (1) Vacancy Rates Suburban Suburban 20% DowntownDC DC 17.3% BID Area (2) Maryland Virginia 11.9% 16% 10.4%
12% 17.1% 16.5%
8% 14.9% 10.4% 12.6% 4%
0% 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Rental Rates (Per SF, weighted average of both full service and triple net rents)
$60 Suburban Suburban DowntownDC DC BID Area (2) Maryland Virginia $50
$55.03 $50.63 $30.92 $40 $26.89
$30 $55.24 $51.80
$20 $27.95 $30.27 $10
0 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Private Office Space Inventory (Millions of SF) 131 Suburban Suburban 140 DowntownDC DC BID Area (2) 105 Maryland Virginia 120
100 80 55 60 36 40
20
0 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Overall Absorption (Millions of SF) Suburban Suburban DowntownDC DC BID Area (2) Maryland Virginia
6 1.86
4 0.15 -0.19 -0.94
2
0 Not Not Not Not available available available available –2 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
(1) Data does not include owner-occupied buildings, one-story buildings, or bulidings less than 25,000 SF. (2) The DowntownDC BID uses Cushman & Wakefield’s East End office market as the DowntownDC BID office market. Source: Cushman and Wakefield
Downtown and DC made modest gains in regional office market share in 2011.
28 Office Market 2011 State of Downtown Office Market
Regional Class A Office Market Comparison, 1997–2011 (1) Vacancy Rates Suburban Suburban 24% DowntownDC DC 18.0% BID Area (2) Maryland Virginia 14.6% 15.6% 18% 11.7%
12% 18.1% 12.8% 19.2% 14.7% 6%
0 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Rental Rates (Per SF, weighted average of both full service and triple net rents)
$75 Suburban Suburban DowntownDC $62.88 DC $59.28 BID Area (2) Maryland Virginia $60 $33.26 $45 $60.17 $55.35 $30.72
$30
$15 $31.43 $32.98
0 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Private Office Space Inventory (Millions of SF) DowntownDC Suburban Suburban 100 DC BID Area (2) Maryland Virginia 75
80 50 60 27 40 20
20
0 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Overall Absorption (Millions of SF) Suburban Suburban DowntownDC DC BID Area (2) Maryland Virginia
6 2.53
4 0.33 0.44 0.06
2
0 Not Not Not Not available available available available –2 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
(1) Data does not include owner-occupied buildings, one-story buildings, or bulidings less than 25,000 SF. (2) The DowntownDC BID uses Cushman & Wakefield’s East End office market as the DowntownDC BID office market. Source: Cushman and Wakefield
All regional Class A markets are performing better than Class B or C markets in terms of rent and absorption.
DowntownDC Business Improvement District 29 Large City Office Market Comparison, 2011 (1) Class A Asking Rents
$73.57 $62.88 $59.28 $47.50 $46.69 $44.92 $38.08 $37.63 $35.64 $32.96 $29.72 $26.99 $24.38 $19.88
NYC DowntownDC DC Boston San NYC Houston Chicago Los Seattle Denver Philadelphia Dallas Atlanta Midtown BID Area Francisco Downtown Angeles
Vacancy Rates
9.6% 10.4% 11.9% 13.4% 9.7% 9.5% 15.8% 14.7% 19.1% 19.5% 13.0% 11.3% 28.5% 22.9%
NYC DowntownDC DC Boston San NYC Houston Chicago Los Seattle Denver Philadelphia Dallas Atlanta Midtown BID Area Francisco Downtown Angeles
Office Space Inventory (Millions of SF)
241 36 105 61 49 86 38 121 27 42 27 44 29 16
NYC DowntownDC DC Boston San NYC Houston Chicago Los Seattle Denver Philadelphia Dallas Atlanta Midtown BID Area Francisco Downtown Angeles
Office Sales, Price Per SF
$570 $653 $523 $466 $298 NA $308 $232 $266 $326 $247 $112 $73 $127
NYC DowntownDC DC Boston San NYC Houston Chicago Los Seattle Denver Philadelphia Dallas Atlanta Midtown BID Area Francisco Downtown Angeles
Office Sales Dollar Volume (Billions of $)
$13.01 $1.85 $3.78 $1.93 $2.48 NA $1.48 $2.34 $0.22 $0.68 $0.37 $0.94 $0.38 $0.27
NYC DowntownDC DC Boston San NYC Houston Chicago Los Seattle Denver Philadelphia Dallas Atlanta Midtown BID Area Francisco Downtown Angeles
Sources: Cushman and Wakefield, Real Capital Analytics (1) DowntownDC BID uses Cushman & Wakefield’s East End office market as the DowntownDC BID office market.
The DowntownDC BID area, DC and Midtown Manhattan rank No. 1, No. 2 and No. 3, respectively, on three key office market metrics: rent, vacancy rate and sales price.
30 Office Market 2011 State of Downtown Office Market
Large City Class A Asking % Change % Change (1)(2) in rent, in rent, (Dollars per SF) Rents, 1995-2011 2001–2011 2001–2011 NYC Midtown 17 % Houston 35 % % Change Boston -13 Los Angeles 43 in rent, San Francisco 16 Seattle -4 2001–2011 NYC Downtown -8 Denver 9 $100 DowntownDC BID 39% Chicago 4 Dallas 7 Washington DC 33 Philadelphia -1 Atlanta -8
$80 $63 $74
$60 $48 $47 $38 $59 $36 $45 $40 $33
$38 $30
$27 $24 $20 $20
0 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11
(1) Markets other than Washington DC and the DowntownDC BID area are grouped by size of CBD office markets and listed by asking rent per SF. (2) Rent concessions were offered widely in 2009.
Source: Cushman and Wakefield
DC has enjoyed high, new Class A asking rents in 13 of the last 16 years; the next closest large cities are Houston and Los Angeles, with highs in 10 of the last 16 years.
Large City Overall Vacancy Rates, 1995-2011(1) Dallas Atlanta Seattle DowntownDC BID Area Chicago 35% Los Angeles Washington DC Boston Houston Philadelphia Denver San Francisco 30% NYC Midtown 28.5% NYC Downtown
25% 22.9%
20% 14.7% 19.5% 13.4% 11.9% 19.1% 15% 11.3% 15.8%
13.0% 10% 9.7% 9.6% 10.4% 9.5% 5%
0 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11
(1) Markets other than Washington DC and the DowntownDC BID grouped by size of CBD office markets and listed by vacancy rate. Source: Cushman and Wakefield
DowntownDC Business Improvement District 31 DowntownDC BID Area and DC Office Sales Per SF History, 1997-2011 (Average price per square foot) DowntownDC BID Area Class A (1) All DC $653 $609 $700700 $700700 All DC Class A $572 $534 600 600 All DC Sales $502
500 500 $577 $523 400 400 $284 $489 300 300 $431
200 200 $295 $230 $244 100 100 $170 $185
0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
(1) DowntownDC BID uses Cushman & Wakefield’s East End office market as the DowntownDC BID office market. Sales data was not broken down by class in 1997. Source: Cushman and Wakefield
It was a record year for Class A office building sale prices in the DowntownDC BID area.
Office Sales Data DC National (1) By Year, 2003–2011 Properties Total SF Volume Amount Properties Total SF Volume Amount (#) (Millions) (Billions) per SF (2) (#) (Millions) (Billions) per SF (2) 2003 60 11.6 $3.7 $314 935 217.0 $37.6 $183 2004 46 11.2 3.7 331 1,334 327.5 59.2 199 2005 39 10.1 4.4 431 1,291 400.7 83.0 224 2006 40 6.3 3.1 488 1,894 484.5 116.1 252 2007 73 14.2 6.6 465 2,541 609.3 182.0 303 2008 20 3.0 1.8 594 610 158.5 43.9 303 2009 10 2.4 1.1 452 234 63.2 12.3 224 2010 26 5.5 2.7 489 480 151.9 37.4 262 2011 27 7.2 3.8 523 653 218.2 53.2 267
Sources: Cushman and Wakefield (DC) and Real Capital Analytics (National)
Though sales volume is not back to the robust years of 2005 – 2007, the square foot volume is 5% - 7% of the total private office space market, which appears to be sustainable.
Office Sales in Top 10 Downtown Markets, 2004–2011 (Ranked by 2011 price per SF)
Price Per Square Foot Dollar Sales Volume (Billions) % Change in 2011 from Average 2011 20102009 2008 2007 2006 2005 2004 20102010 2009 20042004 2011 2010 2009 2004–2011 Manhattan $570 $482 $379 $802 $781 $620 $471 $319 15% 5500 % 79 % $13.01 $7.85 $1.35 $12.39 DC 523 489 452 594 465 488 431 331 7 16 5588 3.78 2.71 1.10 3.39 Boston 466 460 421 360 418 455 346 332 1 11 4400 1.93 1.42 0.40 3.21 Seattle 326 159 133 – 382 284 232 275 51 145 18 0.94 0.09 0.12 1.30 Houston 308 217 – 215 183 95 170 138 30 NA 112323 1.48 0.58 0.12 1.07 San Francisco 298 293 349 359 496 370 321 310 2 --1515 -4-4 2.48 1.81 0.27 2.91 Los Angeles 266 332 – 285 382 300 243 185 -2-255 NA 44 0.22 0.21 0.00 1.33 Denver 247 235 201 226 240 222 170 134 5 23 8855 0.68 0.17 0.13 0.77 Chicago 232 292 311 244 235 215 196 215 -2-266 -2-255 8 2.34 2.06 0.23 3.05 Atlanta 127 114 204 192 197 188 211 201 1100 --3838 -37-37 0.27 0.11 0.03 0.52
Sources: Cushman and Wakefield (DC) and Real Capital Analytics (all other markets)
DC lost its top ranking in office building sales prices to Manhattan in 2011.
32 Office Market 2011 State of Downtown Green Buildings Green Buildings
The federal government, DC government and private sector are all working to reduce energy usage in existing buildings and develop buildings that support newer sustainable energy practices.
The federal government’s General Service Administration (GSA) is building to LEED Gold standards in its new buildings and major renovations, and requires its new GSA leases to have an Energy Star label, preferably with a LEED Gold building or better.
The DC government actively promotes and requires resource efficiency for DC office buildings through the Green Building Act of 2006, the Clean and Affordable Energy Act of 2008, and the Energy Efficiency Act of 2010.
The DowntownDC BID launched its own ecoDistrict in 2011 aimed at energy, water, waste and transportation management within the BID with an emphasis on energy reduction and the associated cost benefits.
The private sector builds resource efficient buildings because an energy efficient building maximizes a building’s potential tenant market; reduces building operating costs; leads potentially to higher rents and building valuation; and improves worker productivity by offering cleaner air which helps reduce sick days.
Leed Registered And Certified Projects in the DowntownDC BID Area, 2003–2011 (1)
Bars represent number of Lines represent cumulative total number (2) Dotted lines represent cumulative total registered projects each year. of registered projects in each category. number of certified projects in each category.
60 Existing 50 Core & New Commercial Buildings Shell Construction Interiors
64 40 45 47 25 30 24 30 24 20 11 15 8 10
0 0 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 00000041110000001421 001000000 001232583
Total number of projects certified in each category. (1) There is a 12 to 36 month lag from registering a project and receiving certification. Sources: U.S. Green Building Council and the DowntownDC BID (2) Includes those projects that have been certified.
With 197 LEED-certified buildings in 2011, DC ranks No. 2 in the nation.
With 872 LEED-registered buildings in 2011, DC ranks No. 2 in the nation.
The number of Energy Star labeled properties in the DowntownDC BID area totaled 57 in 2011.
A recent research report concluded that “minimal increases in up front costs of about 2% to support green design would, on average, result in life cycle savings of 20% of total construction costs.”
DowntownDC Business Improvement District 33 Population & Housing
DC’s biggest economic development news of 2011 was the increase in the city’s population to 618,000, up 16,000 residents, or 2.7%, from April 2010 to July 2011. This is an acceleration of 2005 through 2010 population trends.
The DowntownDC BID area’s housing stock will increase by almost 10% because of the 216 condominiums and 458 apartments being constructed in Phase I of the CityCenterDC project. DC Population, 1990-2015 (Thousands)
DC population growth estimates for the next (1) 700 651 five years are 5,000 to 8,000 per year, primarily 618
because DC is on pace to build 3,000 to 4,000 600 new multi-family units per year over that time. 607 602 (2) 500 572 642
PROJECTION Why is this happening? 400 1990 2000 2010 2015 Census Census Census It is a well-documented trend that recent college graduates and empty nesters want the (1) Projections are taken from the Metropolitan Washington Council of Government’s Growth Trends to 2010 Report, Round 8.0 / Fall 2010. convenience that walkable urban neighborhoods (2) Based on adding 4,000 units with 1.5 residents per year. offer. Does not include births or deaths.
Sources: US Census, Metropolitan Washington Council of Governments, It is an imbalance of DC jobs (720,000) compared and the DowntownDC BID to housing units (300,000). It is a long-term drop in the crime rate. It is the opening of charter schools and Downtown Population, 1990-2015 improvements in some traditional DC (Thousands) 70 61.5 public schools. DowntownDC BID Area 55.6 It is traffic in the suburbs. DowntownDC BID Area 60 plus three blocks north It is city investment in infrastructure and quality One mile radius from 9th and G Streets, NW of life projects: 50 (1) Transit - NoMa’s Metrorail Station; investing 37.2 38.1 PROJECTION in Metrorail to handle deferred maintenance, 40 new buses (including the DC Circulator), and 30 21.0 the DC Streetcar 18.1
Streetscape - Sidewalk improvements in 20 10.0 10.4 4.9 Georgetown, 17th Street NW; 7th Street, 4.5 8.5 9.4 NW (between D and E Streets); Pennsylvania 10 Avenue, SE; H Street, NE; and Adams Morgan Parks - Marvin Gaye Park, Yards Park, Canal 0 1990 2000 2011 2015 Park, and the open spaces at the planned Census Census Wharf project (1) DowntownDC BID projection based on 1.3 residents per units to be completed by 2015.
Sources: 1990, 2000 and 2010 US Census and DowntownDC BID
34 Population & Housing 2011 State of Downtown New neighborhood Population & Housing supermarkets - Skyland, Columbia Heights, Mount DowntownDC BID Area Demographic Profile, 2012 (From 7th and H Streets, NW) Vernon Triangle, Petworth, NoMa, Southwest Waterfront, 0–0.5 mi 0–1 mi 0–3 mi 3rd & H Sts, NE, and Capitol POPULATION Total number 12,999 39,417 311,751 Male 50% 52% 50% Riverfront Female 50% 48% 51% Critical mass retail projects - Bachelor’s Degree or higher 40% 44% 54% Downtown, Columbia Heights, (25 years or older) Professional Degree or higher Fort Lincoln and Skyland (25 years or older) 21% 21% 30% Sports & entertainment - The Verizon Center, two HOUSEHOLDS Total Number 7,856 21,815 146,571 Downtown movie theatres, Average Household Size 1.6 1.7 1.9 Owner Occupied 28% 28% 37% and Nationals Park Median Home Value $424,793 $385,159 $399,867 Arts - Shakespeare Theatre, Ford’s Theatre, Arena Stage, HOUSEHOLD Average Household Income $66,478 $67,063 $87,525 Woolly Mammoth Theatre, INCOME Median Household Income $34,176 $39,474 $58,712 Studio Theatre, Atlas Theatre, Median Household Disposable $31,149 $31,345 $38,422 Share of households with Source Theatre, and the $75,000 or more 27% 29% 41% Capital Fringe Festival have all received strong city support Sources: ESRI forecasts courtesy of the Washington DC Economic Partnership since 2000
It is city policies: Multi-family property tax The DowntownDC BID’s rate relief - Tax Parity Act of Downtown Neighborhood 1998 reduced the tax rate from Survey averages for 2007– 1.54% to 0.96% from 2000 to 2011 show: 2002 to match the surrounding suburban jurisdictions UÊ 25- to 34-year-olds make Tax abatements - For up 45% of Downtown’s population Downtown, Mount Vernon Triangle and NoMa housing UÊ 95% hold college Up-zoning - Capital Riverfront degrees Use of City Land - Mount Vernon Triangle, Columbia UÊ 58% hold graduate Heights, and CityCenterDC degrees UÊ 60% have incomes over Today, virtually all national and $100,000 25 to 34 year olds make up 45% regional multi-family developers of Downtown’s population. are active in the city.
Regional Population, Population (Thousands) Change, 2010–2011 Change, 2000–2011 Change, 1990–2011 1990-2011 2011 2010 2000 1990 Thousands % Thousands % Thousands %
DC 618 602 572 607 16 3% 46 8% 11 2%
Suburban Maryland (1) 2,330 2,304 2,065 1,789 26 1 265 13 541 30
Northern Virginia (1) 2,678 2,623 2,117 1,691 55 2 561 27 987 58 Total 5,626 5,529 4,754 4,087 97 2% 872 18% 1,539 38%
Sources: US Census, Center for Regional Analysis and the DowntownDC BID (1) Suburban Maryland and Northern Virginia 2011 populations are estimated using state growth rates.
DC increased its regional population market share to 10.98% from 10.85% in 2011.
DowntownDC Business Improvement District 35 New housing supply is occurring primarily in DC neighborhoods that are a short walk, bike ride, bus ride, or subway ride from a job. DC neighborhoods are also becoming a bedroom community for suburban jobs, much like San Francisco has for Silicon Valley. In 2011, the number of DC residents employed outside of DC increased to 82,000 from 77,000.
Central DC New Market Rate Multi-family Housing Completed Under Completed 1/1/2011- Construction Planned at Development, 2000–2014 2000-12/2010 3/31/12 3/31/12 3/2012 Total New Units Projected
Near Downtown to North (1) 4,874 - 1,397 4,097 5,494 DowntownDC BID 3,471 - 674 100 774 Mount Vernon Triangle 1,980 218 390 2,131 2,521 Columbia Heights 1,345 - 189 95 284 Capitol Riverfront 2,000 - 471 5,741 6,212 West End 1,452 289 - 451 451 NoMa 623 21 2,045 5,636 7,681 Adams Morgan 453 6 20 255 275 (1) Includes Shaw, Capitol Hill 575 81 59 2,646 2,705 Logan Circle, Dupont Circle, 14th Southwest 489 - 517 2,079 2,596 Street, U Street and LeDroit Park areas. Petworth 187 - 34 739 773
Sources: Capitol Woodley Park - 39 - 211 211 Riverfront BID, Mount Vernon Triangle CID, H Street 462 - 350 1,008 1,358 NoMa BID, and Downtown BID TOTAL 17,911 654 6,145 25,189 31,335
Petworth
Y A KW Columbia AR P K Heights E E R C K COLUMBIA ROAD Howard C O University R
Adams Morgan
U ST. LeDroit Park MASS. AVE.Kalorama 14th & U RHODE ISLAND AVE. CONN. AVE. Streets FLORIDA A Eckington
VE. NEW HAMPSHIRE AVE. 9TH ST. George- Dupont Logan 7TH ST. town Circle Circle P ST. Shaw Walter E. NoMa Washington M ST. NEW YORK AVE. Convention MAS West 22ND ST. Central Midtown Center 16TH ST. S. AVE. End Business Mount District K ST. Vernon K ST. 1ST ST. NE Triangle CityCenterDC George H ST. H Street Washington
University NEW DowntownDC NORTH CAPITOL ST. Union BID Station
18TH ST. 14TH ST. Verizon JERSEY AVE. Kennedy White E ST. EXPWY. House E ST. Center Center 395 Foggy Bottom Federal PENNSYLVANIA Triangle CONSTITUTION AVE. AVE.
NATIONAL MALL US Capitol Capitol Hill
INDEPENDENCE AVE. Southwest OHIO DR. SW Tidal Office Basin District 6,145 units of multifamily 395 4TH ST. SW housing are under construction Po to m a Southwest 295 c in Central DC, 25% to 30% of SOUTH CAPITOL ST. SE R 3RD ST. SE i ve r W Arena the region’s total, as of April a Capitol sh Stage in M ST. SW g Riverfront 2012. Another 1,500 units are to n Navy C expected to break ground in the h Nationals Yard Haines a Fort n Ballpark 0 N 1/2 Point n McNair rest of 2012. e P ST. SW MILE l
36 Population & Housing 2011 State of Downtown Population & Housing
Effective Rental Rates in Class A High Rise Apartment Buildings, 2003-2011 (Per square foot per month)
$5.00 DC (1) Suburban Maryland (4) Suburban Virginia DowntownDC BID Area Bethesda Rosslyn-Ballston Corridor (2) Near the BID, NW Silver Spring/Wheaton Crystal City/Pentagon City DC $4.00 North Bethesda/Rockville Alexandria Near the BID, NE/NoMa (3) $3.25 $3.00
$2.77 $2.63 $3.00 $2.89 $2.20 $2.52 $2.65 $2.00 $2.10 $2.04
$1.00
0 03 04 0506 07 08 09 10 11 03 04 0506 07 08 09 10 11 03 04 0506 07 08 09 10 11
(1) 2003-2008 data not available for the Near BID, NE/NoMa. (3) Includes the the NoMa BID area and H Street corridor west of 5th St NE. (2) Includes the area five blocks north and west of the DowntownDC BID boundary. (4) 2003 data was not available for Silver Spring/Wheaton.
Source: Delta Associates
The DowntownDC BID area apartment market was strong in 2011, though not as strong as other DC submarkets.
Stabilized Residential Vacancy Rates In Class A High-rise Apartment Buildings, 2003-2011
DC (1) Suburban Maryland (4) Suburban Virginia DowntownDC BID Area Silver Spring/Wheaton Alexandria (2) 12% Near the BID, NW Bethesda Crystal City/Pentagon City DC North Bethesda/Rockville Rosslyn-Ballston Corridor Near the BID, NE/NoMa (3)
8% 6.6% 5.6% 5.3% 5.0% 3.9% 3.5% 4%
2.8% 2.5% 3.3% 3.8% 0 03 04 0506 07 08 09 10 11 04 0506 07 08 09 10 11 03 04 0506 07 08 09 10 11
(1) 2003-2008 data not available for the Near BID, NE/NoMa. (3) Includes the the NoMa BID area and H Street corridor west of 5th St NE. (2) Includes the area five blocks north and west of the DowntownDC BID boundary. (4) 2003 data for Suburban Maryland was omitted for sizing purposes.
Source: Delta Associates
DowntownDC Business Improvement District 37 New Condominium Prices Per SF in the Washington Metro Area, Year-End 2011 (1)
Average Effective Contract Price Per SF (2) Central DC $720
Upper Northwest DC $650
Arlington and Alexandria $530
(3) Northeast DC $400
(4) East and South DC $395
Montgomery County $305
Fairfax County and Falls Church $305
Prince George’s County $295
Loudoun and Prince William Counties $175
(1) Reflects prices of condo projects currently selling, so averages should not be (3) East of Rock Creek and north compared from quarter to quarter since locations of projects change each quarter. of S/N/Florida Ave. (2) Central DC is bound by Constitution Ave, Rock Creek Park, Connecticut Ave/ (4) NoMa, Ward Six east of New T St/16th St/S St/11th St/N St, and New Jersey Avenue in Northwest DC. Jersey Ave and east of the Anacostia River.
Source: Delta Associates Condos at 400 Massachusetts Ave, NW.
The Downtown condominium market was strong in 2011, though not as robust as other DC submarkets.
Average New Condominium Prices Per SF in the Region, 2002–2011
DC (1) Suburban Maryland (5) Suburban Virginia (5) DowntownDC BID Area (2) Inside the Beltway Inside the Beltway Near the BID, NW (3) Outside the Beltway Outside the Beltway $800 Near the BID, NE/NoMa (4) DC $640
$504 $600 $502
$374
$400 $450 $455
$200 $285 $285
0 02 03 04 0506 07 08 09 10 11 02 03 04 0506 07 08 09 10 11 02 03 04 0506 07 08 09 10 11
(1) 2002 and 2003 data was not available for DowntownDC BID area and the area near the BID, NW. 2002-2004 data was not available for the area near the BID, NE/NoMa. (2) 2008 data based on sales in only two buildings, including one with very small units, and is estimated to be above the Greater Downtown market by as much as 20% (3) Includes the area five blocks north and west of the DowntownDC BID boundary. (4) Includes the the NoMa BID area and H Street corridor west of 5th St NE. There were no condo sales in the area in 2011. (5) 2002 and 2003 averages are for the whole year while 2004- 2007 are fourth quarter averages
Source: Delta Associates
38 Population & Housing 2011 State of Downtown Hotels, Tourism Hotels, Tourism & Conventions & Conventions
2011 was a record year for occupancy, room rates, revenue per available room (RevPAR) and revenues for DowntownDC BID area hotels. Revenues totaled $582 million—37% of DC’s total—which generated $84 million in hotel sales taxes.
The DowntownDC BID area has 9,599 rooms in 27 hotels, while the rest of DC has 18,253 hotel rooms in 91 hotels and the suburbs have 76,800 hotel rooms in 583 hotels.
The Marriott Marquis Convention Center Headquarters Hotel currently under construction, and one of the biggest projects in DC since 1990, will bring 1,175 new hotel rooms, several new restaurants and three additional ballrooms as well as allow the neighboring Walter E. Washington Convention Center to host two conventions simultaneously. These programmatic additions will better position the convention center to attract national and international conventions.
In February 2012, the General Services Administration (GSA) selected Trump Hotel Collection to redevelop the Old Post Office Pavilion on Pennsylvania Avenue and 12th Street, NW, into a 250-room hotel with restaurants and other amenities that will enliven what is now a very quiet section of Pennsylvania Avenue. Delivery is expected in 2015. CityCenterDC’s Phase II will include a 350-room hotel that could break ground in 2012 and be delivered in 2014. Together, these hotels will add many permanent jobs and generate new hotel and restaurant sales tax revenue for the District of Columbia.
DowntownDC BID Area Hotel Performance, 1997–2011
100% Occupancy (%) $250 Average Room Rate ($) $222 $250 RevPar ($) (1) 78.0% 80% 200 200 $173 $215 60% 72.5% 76.5% 150 150 $142 $165 40% 100 100 $103 20% 50 50
97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11 97 99 01 03 05 07 09 11
Source: Smith Travel Research (1) RevPAR = Revenue per Available Room = Occupancy x Average room rate
Downtown hotels primarily have three drivers of demand: business travelers, conventioneers, and tourists.
DowntownDC Business Improvement District 39 DowntownDC BID Area Hotels, April 2012
Scott Circle N ST. N ST. Existing 7TH ST. 6TH ST. 5TH ST. 12TH ST. Thomas 11TH ST. 10TH ST. Westin City Circle Under Construction Center M ST. Planned M ST. Walter E. The Washington Metro Madison Donovan Convention K AVE. House Source: DowntownDC BID 16TH ST. NT AVE. Center NEW YOR Residence L S T. L ST. Inn 395 Capitol VERMO Henley Hilton Crowne Park Plaza K S T. Mt. Vernon K S T. K S T. Four Embassy Square St. Regis McPherson Franklin Points Square Square Suites Sheraton NEW JERSEY EYE ST. Renaissance EYE ST. 395 Sofitel 13TH ST. Washington, DC Fairfield Inn H ST. Hilton CityCenterDC & Suites MAS H ST. SACHUSETTS A Garden H ST. VE. Lafayette NEW YORK AVE. Inn Gallery 1ST ST. NE
Marriott at N. CAPITOL ST. Square Grand General AVE. Metro Center Hyatt Place Accounting G ST. 15TH ST. Office G ST. Verizon G ST. Center W Hotel Phoenix Union F ST. Washington Park Station White Court Hotel House 395 JW Marriott Hotel 4TH ST. 6TH ST. 5TH ST. Hotel Marriott 11TH ST. 10TH ST. Courtyard Monaco George Willard E ST. InterContinental Hotel FBI Liaison 1ST ST. 2ND ST. Harrington 8TH ST. Capitol Hill D ST. Hyatt . PENNSYLVANIA AVE. AVE. Dept. Regency Ronald ANA AVE. The Ellipse Reagan INDI of Labor RE AVE Buiding C ST. LOUISIANA
DELAWA
CONSTITUTION AVE. CONSTITUTION AVE. N NATIONAL MALL 0 1000 FEET
Walter E. Washington Convention Center (1) 1,200 Attendance, 1999-2016 (Thousands) 1,200 999
900 980 600 850
NUMBER PROJECTION 300 OF EVENTS
116 165 169 185 181 170 110 171 178 235 208 215 0 99 01 02 03 04 05 06 07 08 09 10 11 16
(1) Walter E. Washington Convention Center opened in March 2003. Sources: Washington Convention Center Authority and DowntownDC BID
Room Nights Generated for the Walter E. Washington Convention Center By Destination DC, 2003–2012 (1)
2003 320,000 2004 481,000 2005 622,000 2006 492,000 2007 460,000 2008 545,000 The Walter E. Washington 2009 357,000 Convention Center helps to 2010 367,000 2011 476,000 fill 15% to 25% of all occupied 2012 351,000 (Projection) hotel rooms in Downtown, 2013 315,000 (Projection) contributing to DC’s Source: Destination DC consistently high hotel rates. (1) The Walter E. Washington Convention Center opened in March 2003.
40 Hotels, Tourism & Conventions 2011 State of Downtown Hotels, Tourism & Conventions
Visitors to Washington, DC (1)
Visitors (Millions) Occupied Domestic International Total Hotel Nights 2011 NA NA NA 7.6 2010 15.5 1.7 17.3 7.4 2009 14.8 1.5 16.3 7.2 2008 15.2 1.5 16.7 7.1 2007 14.8 1.2 16.0 7.1 2006 13.9 1.1 15.0 6.9 2005 14.1 1.2 15.3 7.1
(1) Visitor data is released in June of each year for the prior year. 17.3 million people visited Source: Destination DC Washington, DC, in 2010.
Overseas Visitors to Top 10 Cities in the United States, 2005-2009 (1) (2)
(Ranked by market share) Visitors (Thousands) (3) 2010 (4) % Change in Market Visitors from 2010 2009 2008 2007 2006 2005 Share 2005–2010
New York City 8,462 7,792 8,211 7,646 6,219 5,810 32.1% 45.6% Los Angeles 3,348 2,518 2,788 2,652 2,514 2,580 12.7% 29.8% Miami 3,111 2,661 2,585 2,341 1,972 2,081 11.8% 49.5% Orlando 2,715 2,399 2,433 2,055 1,993 2,016 10.3% 34.7% San Francisco 2,636 2,233 2,610 2,270 1,993 2,124 10.0% 24.1% Las Vegas 2,425 1,853 2,027 1,720 1,647 1,778 9.2% 36.4% Washington, DC 1,740 1,544 1,470 1,195 1,062 1,106 6.6% 57.3% Honolulu 1,634 1,497 1,495 1,553 1,733 1,821 6.2% -10.3% Boston 1,186 1,140 1,115 1,075 997 802 4.5% 47.9% Chicago 1,134 1,117 1,368 1,147 1,062 1,084 4.3% 4.6%
Sources: U.S. Department of Commerce, ITA (1) Report is issued in June of each year for the preceding year. (4) Market share is a percentage of the total and Office of Travel and Tourism Industries (2) Excludes Canada and Mexico. number of visits, not total number of visitors, (3) Each visitor may visit more than one city. so the total of each market's share can be greater than 100%.
The hospitality industry represents 3% of DC’s gross domestic product and 9% of the city’s employment.
Visitors waiting to enter the National Archives, home of the Declaration of Independence. Tourism in Washington, DC, continues to support strong hotel performance.
DowntownDC Business Improvement District 41 Memorial/Monument Visitors to the National Mall, 2007–2011 (1) (Ranked by highest attendance in 2011)
Total Visitors (Millions) Visitors at Each Site (Millions) 2011 2010 2009 2008 2007 Lincoln Memorial 6.0 6.0 5.3 4.7 4.2 25 Vietnam Veterans Memorial 4.0 4.6 4.4 4.2 3.6 20 World War II Memorial 3.8 4.0 4.1 4.2 4.1 15 21.4 22.4 21.5 Korean War Veterans Memorial 3.1 3.1 3.1 3.7 3.4
10 Franklin D. Roosevelt Memorial 2.3 2.2 2.6 2.6 2.8
5 Thomas Jefferson Memorial 1.9 2.3 2.3 2.4 2.3 Washington Monument (2) (3) (4) 0.4 (3) 0.6 (3) 0.7 0.7 0.6 0 04 05 06 07 08 0910 11 Total Visitors 21.5 22.8 22.5 22.4 21.0
(1) Figures are not unique visitors to the National Mall as some visitors go to (2) The number of visitors inside the (3) Visitor hours extended (4) The Washington Monument multiple memorials/monuments during one or more trips to the mall per year. Washington Monument is limited to 10 p.m. during July was closed indefinitely for to 80 people at one time. and August. repairs after the August 23, Source: National Park Service 2011 earthquake.
The Reflecting Pool is currently undergoing major reconstruction—a $31 million project expected to be completed in 2012.
Museum Visitors to the National Mall, 2007–2011 (1) (Ranked by highest attendance in 2011)
Total Visitors (Millions) Visitors at Each Site (Millions) 2011 2010 2009 2008 2007 National Air and Space Museum 7.0 8.3 7.0 7.0 6.0 35 National Museum of Natural History 6.6 6.8 7.4 7.0 7.1 30 National Museum of American History (2) 4.6 4.2 4.4 0.5 Closed 25 National Gallery of Art 4.4 4.8 4.6 5.0 4.5
20 Holocaust Museum 1.6 1.7 1.7 1.7 1.6 Smithsonian Castle 1.5 1.8 1.9 1.7 1.6 15 20.7 25.0 27.7 National Museum of the American Indian 1.4 1.3 1.4 1.5 1.8 10 Hirshhorn Museum and Sculpture Garden 0.6 0.6 0.7 0.7 0.7
5 Arts and Industries Building (3) Closed Closed Closed Closed Closed
0 All Visitors 27.7 29.5 29.1 25.0 23.4 04 05 06 07 08 0910 11 % Change in Attendance from Previous Year -6% 1% 16% 7% 1%
(1) Figures are not unique visitors to the National Mall as some visitors (2) Closed for renovations from (3) Closed indefinitely in 2004 for extensive go to multiple museums during one or more trips to the mall per year. September 2006 until November 2008. repairs and decision on future use.
Sources: Smithsonian Institution, Holocaust Museum, National Gallery of Art
42 Hotels, Tourism & Conventions 2011 State of Downtown The current estimate for unique annual visitors to the National Mall ranges from Hotels, Tourism & Conventions 8 million to 11 million, with the National Cherry Blossom Festival accounting for one million visitors.
DC Hotel Sales, 2006–2011 DowntownDC BID Area Hotels Highlighted Total Price Rooms Price per Room Hotel (Millions) (#) (Thousands) 2006 January Westin Embassy Row $36 206 $173 March Four Seasons 169 211 800 March Melrose Hotel 76 240 317 March Hay Adams 56 145 386 May Hotel Washington 120 344 349 October Hotel Washington (1) 150 344 436 2007 January Capitol Hill Suites 39 152 257 January Homewood Suites 50 175 286 February Renaissance Mayflower Hotel 260 657 395 April Marriott Washington 118 417 283 May Hilton Washington (2) 290 1,119 259 September St. Regis (3) 170 178 955 2008 February Latham Hotel Georgetown 33 142 233 Hotel sales picked up in 2010 and February Renaissance M Street Hotel 141 355 398 2011 as travel recovered from the 2010 February Sofitel Lafayette Square 95 237 401 Great Recession of 2007–2009 and May Watergate Hotel 45 251 179 the credit markets rebounded from June Red Roof Inn Downtown (4) 40 195 200 the financial crisis of September July Homewood Suites 57 175 325 2008. September Hampton Inn 73 228 320 September Hotel Monaco 74 183 404 2011 January Madison Hotel (5) 94 353 266 March Capitol Hill Suites 48 152 312 May St. Regis 100 182 550 July Courtyard Washington 68 204 333 Capitol Hill/Navy Yard November Geogetown Inn 35 90 360 2012 March Hotel Palomar 144 335 430
(1) Invested $60 million to convert the hotel into a W Hotel bring the per room investment from $436,000 to $610,000. (2) Invested $100 million to renovate the hotel to bring the per room investment from $259,000 to $349,000. (3) Sales data is not available for the September 2007 sale of the St. Regis. Total price and price per room are DowntownDC BID estimates. (4) Renovated and rebranded the hotel as a Fairfield Inn & Suites. (5) Invested $20 million to renovate the hotel to bring the per room investment from $266,000 to $322,000.
Sources: HVS International and the DowntownDC BID
The Marriott Marquis Convention Center Headquarters Hotel is currently under construction. When completed in 2014, the hotel will provide the city with many permanent jobs and additional hotel and restaurant sales tax revenue.
DowntownDC Business Improvement District 43 Large City Downtown Hotel Market Size Comparison, 2011 (Ranked by revenue) Revenue Rooms Hotels (Millions of $) (#) (#) New York $4,212 48,839 148 San Francisco 1,621 31,985 194 DC Total 1,562 27,794 118 DowtownDC BID 582 9,559 27 Other DC 980 18,253 91 Chicago 1,384 29,054 73 Atlanta 502 17,015 59 Houston 440 12,976 56 Seattle 425 10,124 46 Boston 407 6,805 25 Philadelphia 376 8,819 32 Denver 327 8,190 30 Los Angeles 263 7,085 25 The Grand Hyatt Hotel in Downtown is Dallas 175 6,649 18 one of DC’s largest hotels with 888 hotel Source: Smith Travel Research rooms and 40,000 SF of meeting space.
Large City Hotel Performance Comparison, 2011 (1) Revenue Per Available Room ($)
$241 $173 $164 $146 $139 $132 $117 $115 $109 $93 $90 $84 $82
Midtown DowtownDC Boston DC, San Chicago Philadelphia Seattle Denver Houston Los Dallas Atlanta New York BID Area Outside Francisco Angeles of BID area Average Room Rate ($)
$290 $222 $212 $198 $174 $181 $163 $154 $154 $134 $134 $146 $131
Midtown DowtownDC Boston DC, San Chicago Philadelphia Seattle Denver Houston Los Dallas Atlanta New York BID Area Outside Francisco Angeles of BID area
Occupancy Rate (%)
83.3% 78.0% 77.3% 74.0% 80.2% 72.6% 71.7% 74.4% 70.8% 69.1% 67.3% 57.7% 62.7%
Midtown DowtownDC Boston DC, San Chicago Philadelphia Seattle Denver Houston Los Dallas Atlanta New York BID Area Outside Francisco Angeles of BID area
Source: Smith Travel Research (1) Downtown geographies used in all cases.
44 Hotels, Tourism & Conventions 2011 State of Downtown As with several other markets, DowntownDC trails only Midtown New York City in Hotels, Tourism & Conventions hotel performance.
Large City Hotel Performance Comparison, 2000-2011 (1)
DowntownDC BID Area Midtown New York Seattle DC, Outside of BID Area Boston Denver San Francisco Houston Chicago Los Angeles Philadelphia Dallas Revenue Per Available Room ($) Atlanta $300 $241
$250
$173 $200 $164 $115 $109 $150 $139 $132 $93 $146 $100 $90 $117 $84 $50 $82
0 01 03 05 07 09 11 01 03 05 07 09 11 01 03 05 07 09 11
Average Room Rate ($)
$300 $290
$350 $222 $250 $212 $154 $154 $200 $181 $146 $174 $150 $198 $134 $163 $134 $100 $131 $50
0 01 03 05 07 09 11 01 03 05 07 09 11 01 03 05 07 09 11
Occupancy Rate (%) 100% 83% 78% 74% 80% 71% 80% 77% 69% 73% 67% 74% 60% 63% 72% 58% 40%
20%
0 01 03 05 07 09 11 01 03 05 07 09 11 01 03 05 07 09 11
Source: Smith Travel Research (1) Downtown geographies used in all cases.
DowntownDC Business Improvement District 45 Culture & Entertainment
DC continues to be the cultural and entertainment center of the region, and the DowntownDC BID area is home to many of the city’s most important facilities. Two new entertainment venues—Hamilton Live and The Riot Act Comedy Theater—opened in 2011. Hamilton Live is a performance space with 450 person capacity (300 table seats) in a spectacular new setting (and connected to a 520-seat restaurant), and Visitors in the DowntownDC BID Area, 1999–2015 (Thousands) the Riot Act can seat 300 patrons. Both 15,000 were opened by veteran Downtown 11,000 operators, Clyde’s Restaurant Group and 12,000 Bedrock Management, respectively.
9,000 It was a difficult year for many Downtown
9,514 9,473 cultural institutions, as federal funding 6,000 for DC arts organizations fell by slightly more two-thirds late in the year--from 3,000 $9.5 million to $3 million. That the
PROJECTION National Building Museum’s attendance 0 increased after it implemented a new 99 0102 03 04 05 0607 0809 10 11 15 $8 ticket price for major exhibitions is Source: DowntownDC BID especially impressive.
Visitors in the DowntownDC BID Area By Major Sector, 1999–2015 (Thousands)
6,000 4,000 Museums Verizon Center (Excludes Mall museums) 4,800 6,000 3,200 2,600
3,600 5,098 4,995 2,400
2,500 2,500 2,400 1,600
1,200 NUMBER OF MUSEUMS (1) 800 8 7 7 6 9 10 9 10 11 13 13 13 13 13 0 0 9900 01 02 03 04 05 0607 0809 10 11 15 9900 01 02 03 04 05 0607 0809 10 11 15
1,500 1,500 Cinemas Theaters
1,200 1,500 1,200 900 741 626 900 1,290 1,237 900
600 600
300 300 NUMBER OF THEATERS (2)
NUMBER OF CINEMAS 2 2 2 2 2 2 2 2 2 4 4 2 4 4 4 5 5 6 6 7 7 7 7 0 0 9900 01 02 03 04 05 0607 0809 10 11 15 9900 01 02 03 04 05 0607 0809 10 11 15
Source: DowntownDC BID (1) Between 2001 and 2005, one or more venues was closed for renovation. In 2007 and 2008, one museum did not report attendance. In 2009-2011, two museums did not report attendance. (2) In 2001 and between 2007-2008, one or more theaters were closed for renovation.
46 Culture & Entertainment 2011 State of Downtown Culture & Entertainment
With the 2007 opening of the Harmon Center for the Arts, the Shakespeare Theatre Company’s productions have attracted 90,000 to 100,000 additional patrons to Downtown, bringing the city an additional $400,000 in annual tax revenues. Shakespeare Theatre Company’s production of Candide is a 2011 Helen Hayes Award winner.
Despite cuts in federal funding, Downtown theater attendance was at its second highest level in eight years.
DowntownDC BID Area Theater Attendance, 1999–2011 (Ranked by highest attendance in 2011)
(1) Total Visitors (Thousands) Visitors at Each Site (Thousands) 2011 2010 2009 2008 2004 1999
1,000 Warner Theatre 265 179 190 207 274 281 (2) Sidney Harman Hall 165 150 142 130 Opened in 2007 800 National Theatre (3)106 (4) 64 222 89 132 223
600 Ford’s Theatre 87 92 85 Closed 98 98 740 (2) Lansburgh Theatre 73 96 90 93 146 138 400 650 562 741 Woolly Mammoth Theatre 45 45 45 44 Opened in 2005 200 Total Theater Attendance 741 626 773 562 650 740
0 % Change in Attendance from 18% -19% 37% 0% -20% 1% Previous Year 9901 03 05 07 09 11
(1) Ford's Theater closed for an 18-month renovation on 6/1/2007 and reopened on 2/3/2009. (2) Shakespeare Theatre Company. (3) 3 shows ran in 2011.
Sources: Theaters (4) 2 shows ran in 2010.
Theater Attendance Data for Washington Region, 1990–2011 Attendance 2,225 2,500 (Thousands) 1,802 2,000
1,500 2,080 2,070
1,000
500 NUMBER OF PERFORMANCES 5,284 5,478 5,455 6,415 6,074 5,972 6,404 6,945 5,849 6,510 7,631 8,075 9,272 8,130 7,582 7,169 7,648 8,050 8,723 8,342 9,443 9,900 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 30 33 37 44 46 48 52 52 52 61 78 78 83 85 80 56 64 67 69 73 79 84
Source: Helen Hayes Awards NUMBER OF THEATERS
Regional theatre attendance was at its highest since 1997.
DowntownDC Business Improvement District 47 Museums bring more people Downtown than any other visitor category.
Museum Attendance in the DowntownDC BID Area, 2007-2011 (Ranked from highest to lowest in 2009)
2011 2010 2009 2008 2007 National Archives (1) 1,045,562 1,058,671 1,003,491 1,015,374 1,075,129 National Portrait Gallery and 948,345 1,100,000 1,000,000 1,000,000 786,000 Smithsonian American Art Museum (2) The Newseum (3) 805,977 712,000 714,000 714,000 Opened in April 2008 International Spy Musem (4) 600,000 650,000 650,000 700,000 719,823 Ford’s Theatre Museum (5) 563,426 599,841 557,652 335,865 732,521 National Building Museum 554,282 515,534 436,315 406,796 414,517 Old Post Office Tower 236,136 262,030 256,874 239,785 226,908 The Naval Heritage Center 100,000 75,000 60,000 60,000 60,000 National Museum of Women in the Arts 68,300 68,000 85,000 96,674 116,022 Marian Koshland Science Museum 41,000 26,200 27,703 28,316 24,064
National Law Enforcement Memorial — 32,300 30,494 31,583 27,598 29,589 Visitors Center Crime and Punishment Museum Data Unavailable Data Unavailable Data Unavailable Opened in May 2008 Madame Toussaud’s Data Unavailable Data Unavailable Data Unavailable Opened in October 2007
Total Museum Attendance 4,995,328 5,097,770 4,822,618 4,624,408 4,184,573 % Change in Attendance from Previous Year -2% 6% 4% 11% 8%
(1) The National Archives tracks visitors by the federal fiscal year (4) The 2011 attendance for the International Spy Museum is a (October 1–September 30). DowntownDC BID estimate. (2) The National Portrait Gallery and Smithsonian American Art (5) Ford's Theatre and Ford's Theatre Museum closed for renovations in Museum closed for renovations in 2000 and re-opened in July 2006. September 2007. The Theatre reopened in February 2009, and the (3) The Newseum opened in April 2008; number is for 4/08-4/09. Museum reopened in July 2009. The Petersen House was open throughout.
Sources: Museums
Top 10 Art Museums in the US, 2011
Attendance Museum (Thousands) City 1. Metropolitan Museum of Art 6,004 New York 2. National Gallery of Art 4,392 Washington 3. Museum of Modern Art 2,815 New York (1) 4. Getty Center 1,168 Los Angeles 5. Guggenheim Museum 1,107 New York (2) 6. Smithsonian American Art Museum 1,100 Washington (2) 7. National Portrait Gallery 948 Washington 8. Freer and Sackler Galleries 945 Washington 9. SFMoMA 700 San Francisco 10. Philadelphia Museum of Art 692 Philadelphia
(1) Excludes the Getty Villa attendance of 350,054. (2) The National Portrait Gallery and the Smithsonian Many suburban residents visit DC American Art Museum are housed in the same building. for the first time during the annual Source: The Art Newspaper, No. 234, April 2012 National Cherry Blossom Festival.
Downtown has two of the 10 most visited museums in the U.S.
48 Culture & Entertainment 2011 State of Downtown Culture & Entertainment
Top 25 Art Museums in the World, 2011 Largest Public Performing Arts Spaces In DC, April 2012 Attendance Museum (Thousands) City DowntownDC BID Area Theaters Highlighted Seats 1. Louvre 8,880 Paris The Kennedy Center for the Performing Arts 6,679 2. Metropolitan Museum of Art 6,004 New York Concert Hall 2,4422,442 3. British Museum 5,849 London Opera House 2,30 2,3000 Eisenhower Theater 1 1,100,100 4. National Gallery 5,253 London Terrace Theater 5 51313 5. Tate Modern 4,802 London Family Theater 324324
6. National Gallery of Art 4,392 Washington DAR Constitution Hall 3,7023,702 7. National Palace Museum 3,850 Taipei Warner Theatre 1,8471,847 8. Centre Pompidou 3,613 Paris National Theatre 1,6761,676 9. National Museum of Korea 3,240 Seoul Cramton Auditorium, Howard University 1,5001,500 10. Musée D'Orsay 3,154 Paris The Lisner Auditorium, 11. Museo Nacional del Prado 2,912 Madrid The George Washington University 1,490 12. State Hermitage Museum 2,880 St Petersburg Arena Stage 1,4111,411 13. Museum of Modern Art 2,815 New York The Fichandler Stage 683 14. Victoria & Albert Museum 2,789 London Kreeger Theater 51 5144 Kogod Cradle 21 2144 15. Reina Sofía 2,706 Madrid Lincoln Theater 1,2501,250 16. National Folk Museum of Korea 2,356 Seoul Harman Center for the Arts, 17. Centro Cultural Banco do Brasil 2,288 Rio Shakespeare Theatre Company 1,2261,226 18. National Portrait Gallery 1,880 London Sidney Harman Hall 775775 19. Galleria degli Uffizi 1,743 Florence Lansburgh Theatre 45 4511 20. Shanghai Museum 1,727 Shanghai Studio Theatre 700700 Mead Theatre 200200 21. Moscow Kremlin Museums 1,724 Moscow Milton Theatre 200200 22. Tokyo National Museum 1,629 Tokyo Metheny Theatre 20 2000 23. Van Gogh Museum 1,600 Amsterdam Stage Four 10 1000 24. CaixaForum 1,599 Madrid Ford’s Theatre 658 25. Grand Palais 1,500 Paris Howards Theatre (1) 600600 Atlas Performing Arts Center 526 Source: The Art Newspaper, No. 234, April 2012 Atlas Fixed Seat Theatre 27 2766 Atlas Flexible Seat Theatre 25 2500
Hartke Theatre, Catholic University 516 Economic Impact of Non-Profit Arts and (1) Town Hall Education Arts & Recreation (THEARC) 36 3655 Culture Organizations in DC, FY 2005 Tivoli Theatre, GALA Hispanic Theatre 270270 Arts and Culture Woolly Mammoth Theatre 265 Total Economic Activity Organizations (2) Audiences (3) Expenditures Folger Theatre 250250 Total Industry Jewish Community Center (Theatre J) 238 Expenditures $628 million $119 million $747 million Warehouse Theater 165 Economic Impact of Expenditures H Street Playhouse 150 Full-Time Equivalent Jobs Supported 11,205 jobs 778 jobs 11,983 jobs Source Theatre 150 Household Income Washington Stage Guild at Undercroft Theatre 148 Paid to Residents $355 million $15 million $370 million Church Street Theater 115 Revenue Generated to Local Government $62 million $4 million $66 million Flashpoint Theatre 75
(1) Due to its large size, the Smithsonian Insititution has been excluded from this Total Current Seats 25,97225,972 economic impact analysis. % of Seats in DowntownDC BID Area 23%23% (2) Spending by non-profit arts and culture organizations includes labor, payments to local and non-local artists, operations, materials, facilities and asset acquisition. (3) Event-related spending by non-profit arts and culture audiences, excluding the (1) Theatre scheduled to open in April 2012. cost of admission. Source: DowntownDC BID Source: Americans for the Arts
DC’s non-profit arts organizations directly create 2% of the city’s non-federal jobs.
DowntownDC Business Improvement District 49 Retail & Restaurants
Retail vacancies in the DowntownDC BID area are a healthy 9%, as of year-end 2011. This is up 7% from year-end 2010 due mainly to Filene’s Basement closing its 56,000 SF store. Downtown's retail strength was highlighted in 2011 by its first $200-plus per square foot (SF) retail lease signing, and by interest in 185,000 SF of retail space now under construction in Phase I of the CityCenterDC project.
Despite the good news on ground floor rents and occupancy, destination shoppers’ goods retail continues to be the low-performing sector of the Downtown economy. Though Downtown, in April 2012, is not a regional destination for clothing and other shoppers’ goods today, the opening of the CityCenterDC retail component in the fourth quarter of 2013 should make it one. Further analysis is needed to determine if more public/private partnerships are warranted to make Downtown a national or international shopping destination. Currently, 91% of street level space is occupied, but 18% is occupied by non-retail uses, 40% with food and beverage businesses and only 26% with shoppers’ goods (clothing, housewares, books, jewelry, etc). A big question is whether Downtown can produce $1,000 per SF in sales to allow shoppers’ goods retailers to compete with banks, drugstores and service businesses for top retail locations.
Anthropologie and Andrew’s Ties are the new shoppers’ goods retailers that opened in Downtown in 2011. TJ Maxx and Leica Camera announced they will open in 2012. Filene’s Basement closed its doors and Penn Camera’s owner filed for bankruptcy. The camera store’s Downtown location was saved by a white knight in the first quarter of 2012.
Retail Space Overview for DowntownDC BID Area, March 2012 (As percentage of existing and possible space. Percentages and square footage numbers are rounded.)
Total Possible Retail Space 3,351,000 SF (1) Non-Retail First Vacant Under Occupied or Announced Floor Space Construction
69% 15% 9% 7%
2,317,000 SF 516,000 SF 294,000 SF 223,500 SF
% of Occupied or Announced Space Food and Beverages: 49% Shoppers’ Goods: 32% Services: 19%
Total Space 1,137,000 SF Total Space 739,000 SF Total Space 441,000 SF
Casual Restaurants 390,000 SF Clothing and Shoes 268,000 SF Banks and Financial Institutions 207,000 SF Deli, Fast Food and Coffee 344,000 SF Department Stores 227,000 SF Fitness Centers 73,000 SF High-End Restaurants 333,000 SF Gift Shops, Florists and Newstands 74,000 SF Hair and Nail Salons 41,000 SF Nightclubs, Bars, Liquor Stores Home and Office Supplies 66,000 SF Printing and Mailing Services 28,000 SF and Food Retail 70,000 SF Book and Music Stores 31,000 SF Shoe Repair, Drycleaners and Optics 29,000 SF Jewelry, Art Galleries Pharmacies 31,000 SF and Specialty Stores 32,000 SF (1) Includes CityCenterDC with 185,000 SF of retail. Travel Agencies, Car Rental and Other 32,000 SF Cellular Stores, Electronics Source: DowntownDC BID and Camera Shops 41,000 SF
50 Retail & Restaurants 2011 State of Downtown Retail & Restaurants
CityCenterDC Retail Overview Retail/Public Parking The retail component of Phase I of Projected Retail SF Opening Dedicated Off-Peak the CityCenterDC project should Phase One 185,000 4Q 2013 525 400-500 make Downtown a regional retail Phase Two 110,000 4Q 2015 225 50 Phase Three 40,000 2015/17 NA 100-300 destination and continue to help
Source: DowntownDC BID diversify the Downtown economy.
Twelve destination restaurants opened in 2011: Elisir, The Federalist, Fiola, Graffiato, The Hamilton, Hill Country, Lincoln, North Gate Grill, Pho DC, Redline, Sak Restaurant and Lounge, and 901 Restaurant and Bar. Five destination restaurants closed: Funxion, Galileo III, Palette, Ten Penh and Twigs. The net gain of seven destination restaurants continues to make Downtown a strong regional and budding national restaurant destination. Restaurants are an important segment of the city’s growing nighttime economy, and the DowntownDC BID estimates the 2011 net gain of seven destination restaurants will contribute $4 - $6 million in annual restaurant sales tax revenue to the city. So far, five new restaurants have announced plans to open in 2012, bringing Downtown’s total destination restaurants to 144 after adjusting for one closing. Jaleo, one of Downtown’s pioneer restaurants, and a longtime favorite, underwent an exciting million-dollar-plus renovation in the first quarter of 2012.
The net gain of seven restaurants in 2011 continues to make Downtown a strong regional and budding national restaurant destination.
Carmine’s is a family style, value-driven Italian restaurant concept located at 425 7th Street NW in the Penn Quarter neighborhood.
DowntownDC Business Improvement District 51 Destination Restaurants in the DowntownDC BID Area, 1999–2012 144 150 140
120 110
78 90
60 Graffiato restaurant opened in 2011 to critical acclaim and full houses. In early 2012, its
30 management announced plans to open two new restaurants in the 14th and U Streets corridor, an example of how the Downtown 0 economy spins off economic development to 99 00 01 02 03 04 05 06 07 08 09 10 11 12 (1) other DC neighborhoods. # Opened NA168139101281617175125
# Closed NA67675514479651 Net Change NA1017257-612108-174
Source: DowntownDC BID (1) Projection.
From 1999 through 2011, the DowntownDC BID area had 143 new restaurants open and 81 close, for a net gain of 62 (or 66 including one block to the north of the DowntownDC BID). On average, each new restaurant generates $3 - $5 million in sales, creates 50 to 80 jobs, and $300,000 to $500,000 in new sales taxes for the city.
DowntownDC BID Area Destination Restaurants, April 2012
N ST. N ST. Existing restaurant Scott Thomas Circle Circle Planned restaurant 7TH ST. 6TH ST. 5TH ST. 11TH ST. 10TH ST. 13TH ST. 12TH ST. M ST. Metro M ST. Walter E. MASSACH Source: DowntownDC BID Washington E. Convention USETTS AVE. 16TH ST. Center L ST. NEW YORK AV L ST. L ST. 395 MONT AVE.
VER K S T. Mt. Vernon K S T. Mount Vernon Triangle, K S T. Square Franklin Northwest One and NoMa McPherson Square Square EYE ST. EYE ST. NEW Gallery Place 395
JERSEY AVE.
CityCenterDC Retail MASSACHUSETTS AVE. N. CAPITOL ST. H ST. H ST. NEW YORK AVE. Lafayette H ST. Square General 1ST ST. NE Accounting G ST.
13TH ST. Office G ST. Verizon G ST. Georgetown Center Union Law School Station White F ST. House 395 NEW JERSEY AVE. 3RD ST. 4TH ST. 9TH ST. 6TH ST. 5TH ST. E ST. 11TH ST. E ST. FBI 14TH ST. 15TH ST. 2ND ST. 1ST ST.
D ST.
PENNSYLVANIA AVE. E AVE. Ronald Dept. AVE. The Ellipse Reagan INDIANA AVE. of Labor Buiding C ST. LOUISIANA DELAWAR 7TH ST. CONSTITUTION AVE. CONSTITUTION AVE.
NATIONAL MALL 0 N 1000 FEET
52 Retail & Restaurants 2011 State of Downtown Retail & Restaurants
DowntownDC BID Area Destination Retailers, 2011 Square Feet Large Macy’s 227,000 Retailers Forever 21 65,000 Bed Bath and Beyond 48,000 Dress Barn 31,000 TJ Maxx (announced) 29,000 H&M 27,000 Barnes & Noble 23,000 City Sports 16,000 Anthropologie opened its 11,000 SF store Urban Outfitters 15,000 on the 900 block of F Street in June 2011. Zara 14,000 Anthropologie 11,000 Memorial/Museum/Theatre Gift Shops (12) 19,000 Large Retailers Subtotal 525,000 Available DowntownDC BID Area Destination Retail Space Other Ann Taylor 6,700 Retailers Jos A Bank 5,900 Project Square Feet Utrecht Art Supply 5,800 529 14th St. 56,000 Ann Taylor Loft 5,700 555 12th St. 42,000 Staples 5,300 441 4th St. 9,000 Guess 5,000 1010 Massachusetts Ave. 8,700 Banana Republic 4,100 860 E St. 6,800 Peruvian Connection 3,600 600 14th St. 6,300 La Mode 3,400 1501 K St. 6,000 Payless Shoe Source 3,200 1299 Pennsylvania Ave. 5,500 Penn Camera 2,700 1001 Pennsylvania Ave. 5,300 Bandolino 2,400 Total Large Vacancies 145,600 Fahrney's Fountain Pens 2,300 American Apparel 2,100 (1) The Old Convention Center Site will bring 345,000 SF of retail space by 2015. WC Draper 2,000 Source: CoStar, Brokers and DowntownDC BID Leica Camera (announced) 1,800 WM Fox & CD 1,700 lou lou boutique 1,600 Nine West 1,500 Alden Shoes 1,400 Comfort One 1,300 Ecco 1,300 Shoes by Lara 1,300 Johnston & Murphy 1,300 Coup de Foudre 800 George de Paris 800 Andrew’s Ties 400 Electronics (6) 9,800 Jewelry Stores (11) 9,400 Specialty Book Stores (7) 8,700 Art Galleries (3) 3,600 Other Retailers Subtotal 106,900
Total Destination Retail Space 631,900
Sources: CoStar, Brokers and DowntownDC BID
Forever 21 is one of several retail tenants located at 1025 F street.
DowntownDC Business Improvement District 53 DowntownDC Destination Retail Map, April 2012
G Scott N ST. Circle Existing Destination Retail
MAJOR CONNECTICUT 7TH ST. 6TH ST. 5TH ST. Future Destination AVENUE RETAIL 13TH ST. 12TH ST. 11TH ST. 10TH ST. Retail Space G Thomas M ST. ? Benetton Circle G ? Betsy Fisher Walter E. Grocery Stores MASSAC Washington ? Brooks Brothers Metro PIERCE ST. ? Burberry HUSETTS AVE Convention L ST. Center ? Gap NEW YORK AVE. Source: DowntownDC BID . ? Men’s Warehouse L S T. G 395 ? Nine West VERMONT AVE. ? Proper Topper ? Rizik Brothers K S T. Mt. Vernon K S T. ? Thomas Pink Square McPherson Franklin ? Tiny Jewel Box Square Square NEW JERSEY AVE. ? Victoria’s Secret EYE ST. EYE ST. 395 CityCenterDC GALLERY PLACE RETAIL Walmart (announced) H ST. Ecco and ? Ann Taylor Loft H ST. NEW YORK AVE. G Comfort ? Aveda One ? Bed Bath and Beyond Lafayette Johnston & 1ST ST. NE Macy’s M Square Murphy and Shoes ? City Sports ASSA 15TH ST. ? Urban Outfitters CHUSET G ST. Ann Taylor Union G ST. Verizon TS AVE. Station
Center Georgetown N. CAPITOL ST. Dress Barn 3 5 8 910 1 2 4 Law School F ST. 8. Leica (announced) White 395 NEW JERSEY AVE. MAJOR UNION Bandolino 6 12 11 House 7 9. Mia Gemma STATION RETAIL and Nine West 3RD ST. 10. Alden Shoes, Cowgirl E ST. ? Appalachian Spring Creamery and L’Occitane ? Ann Taylor Coup 11. Anthropologie ? Chico’s 2ND ST.
1. Banana Republic 1ST ST. de Foudre Illuminations 12. Peruvian Connection ? Express 2. T.J. Maxx (announced) and lou lou D ST. ? Heydari 3. Guess and Andrews Ties . ? Jos. A. Bank 4. H&M Pua Naturally IANA AVE. Dept. The Ellipse IND of Labor ? L’Occitane 5. Forever 21 ? New York New York and Zara C ST. LOUISIANA AVE ? Nine West 6. Jos A. Bank & PE NNSYL ? The Body Shop American Apparel VANIA AVE. ? Victoria’s Secret 7. Barnes and Noble CONSTITUTION AVE. 12TH ST. 10TH ST. 9TH ST. CONSTITUTION AVE. 0 N 1000 NATIONAL MALL FEET
Macy's is Downtown's largest retailer and continues to anchor the Downtown Shopping District.
54 Retail & Restaurants 2011 State of Downtown Retail & Restaurants With retail opening at CityCenterDC (50% of which is assumed to be shoppers’ goods retail) and at the H Street and New Jersey Avenue Walmart (one block north of the DowntownDC BID), Downtown’s shoppers’ goods retail supply will increase by $80 - $100 million. Nevertheless, the net retail opportunity for shoppers’ goods retail (current demand less current and projected supply) is projected to be a healthy $600 million in 2015.
DowntownDC Retail Opportunity For Shopper's Goods, March 2012 (From 9th and G Streets, NW) Change
2011 2015 2011–2015 INPUTS FOR RETAIL DEMAND PROJECTIONS (Projected) (Projected) Office Office Space Within 5 Blocks 41 million SF 44 million SF 3 million SF Worker Market Office Space Within 15 Blocks 124 million SF 135 million SF 11 million SF Office Workers Within 5 Blocks 116,000 129,000 13,000 Office Workers Within 15 Blocks 422,000 466,000 44,000
Non-Office Non-Office Workers Within 5 Blocks 11,000 15,000 4,000 Worker Market Non-Office Workers Within 15 Blocks 30,000 36,000 6,000
Residential Population Within 5 Blocks 6,300 7,100 800 Market Population Within 15 Blocks 55,600 65,400 9,800
Visitor Hotel Rooms Within 5 Blocks 3,300 4,900 1,600 Market Hotel Rooms Within 15 Blocks 16,900 20,300 3,400 Hotel Rooms Citywide 27,800 31,400 4,000
Hotel Room Nights Within 5 Blocks 0.95 million 1.4 million 0.45 million Hotel Room Nights Within 15 Blocks 4.6 million 5.4 million 0.8 million Hotel Room Nights Citywide 7.7 million 8.4 million 0.7 million
INPUTS FOR RETAIL SUPPLY PROJECTIONS SF of Shopper’s Goods Retail 0.8 million 1.0 million 0.2 million Within 15 Blocks
RETAIL SALES OPPORTUNITY ANALYSIS — 15 BLOCKS
Dollars Office Worker Market $507 million $605 million $98 million of Retail Demand Residential Market 271 million 332 million 61 million Overnight Hotel Visitor Market (1) 91 million 108 million 17 million Total $869 million $1,045 million $176 million
Dollars of Retail Supply (15 blocks) $284 million $418 million $134 million
Retail Opportunity $585 million $627 million $42 million (Current DowntownDC BID Area Retail Demand in annual in annual Less DowntownDC BID Area Retail Supply) sales sales
(1) Overnight visitor market retail demand is calculated from hotel guests within 15 blocks of the 9th and G Streets.
Sources: CoStar Group and Cushman and Wakefield (office space data); 2010 Census (residential market data); Smith Travel Research (visitor market data); and DowntownDC BID (residential and retail market data)
Over the past few years food trucks in Downtown have grown considerably, providing a popular new lunch alternative for Downtown workers.
A frequent food truck location is the northeast corner of 12th & G streets NW.
DowntownDC Business Improvement District 55 Transportation
Transportation choices and access is the DowntownDC BID area and DC’s second most important competitive advantage after proximity to the federal government. The most recent DC transportation success story is the Capital Bikeshare (CaBi) system. The city and private sector are planning on the DC Streetcar system to be the next transportation success story.
From walking to work to using the region’s three airports (as 64 million passengers currently do), the DC region has more transportation options than most U.S. metropolitan regions. With Metrorail’s expansion to Tysons Corner and Reston in the next 18 to 24 months, and then to Dulles Airport and beyond in 2018, and several other announced light rail and streetcar projects, the region will become more transit-friendly and competitive.
Non-Auto Transportation Modes for Getting to Work, 2010
Non-Auto Modes for City Residents Non-Auto Modes for Getting to Getting to Work Anywhere in the Region Work in the City from Anywhere in the Region
Total Public Transit Bike Walk Total Public Transit Bike Walk New York City 67% 56% 0.8% 10.1% 66% 57% 0.6% 8.6% Washington, DC 53% 38% 3.1% 11.8% 42% 36% 1.4% 4.6% Boston 50% 33% 1.4% 15.8% 47% 37% 1.1% 9.2% San Francisco 47% 34% 3.5% 9.4% 47% 38% 2.6% 7.1% Philadelphia 37% 27% 1.8% 8.3% 36% 28% 1.5% 7.0% Chicago 34% 27% 1.3% 6.5% 37% 31% 1.1% 5.3%
Source: American Community Survey 2010, One Year Estimate
The more transportation options Downtown offers, the more successful Downtown will be.
Downtown is home to seven Metrorail stations.
56 Transportation 2011 State of Downtown Metrorail Transportation
Each weekday, Metrorail has approximately 690,000 passengers, with 16% of that total in the BID.
The DowntownDC BID area calendar 2011 Metrorail ridership declined 0.8% on weekdays and 7% on weekends compared to 2010. The weekend ridership decline was impacted by a lack of major National Mall rallies. The ridership decline might also be attributable to important deferred maintenance repairs on Metrorail, which caused delays and customer dissatisfaction.
DC, Maryland, Virginia and the federal government are partners in a 10-year, $3 billion capital campaign, in which DC will contribute $50 million of the annual $300 million campaign. The current federal budget is short $15 million of the $150 million federal annual commitment. In addition, Metrorail is requesting regional capital contributions of another $390 million for the upcoming fiscal year.
Daily Metro Ridership Exits in (1) (2) DowntownDC BID Area, 1997–2011 (Thousands) Average Weekday 107 120 Average Weekend Day
100 78 108 80 98
60 68 41 31 40 24 44 20 19 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
(1) Exit numbers for Metro stations in DowntownDC BID Area (McPherson Square, Metro Center, Gallery Place- Chinatown, Archives-Navy Memorial-Penn Quarter, Federal Triangle, Mt. Vernon Square and Judiciary Square). (2) The MCI (now Verizon) Center opened in December 1997 at Gallery Place.
Source: WMATA
Average Weekday Metrorail Ridership, 2011 (1) (2) (Figures represent exit numbers only) Archives-Navy Metro Gallery McPherson Judiciary Federal Memorial- Mt. Vernon TOTAL Center Place Square Square Triangle Penn Quarter Square
2011 28,922 27,176 17,676 10,094 10,035 9,208 3,950 107,060
2010 29,199 27,315 17,646 10,217 10,525 9,310 3,663 107,875 Change -277 -139 30 - 123 - 490 -102 287 -815 % Change - 0.9% -0.5% 0.2% -1.2% -4.7% -1.1% 7.8% -0.8%
1997 23,638 7,286 14,443 6,396 9,422 5,543 1,689 68,416 Change 5,284 19,890 3,233 3,698 613 3,665 2,261 38,643 % Change 22% 273% 22% 58% 7% 66% 134%56%
Metrorail Lines
(1) Exit numbers for Metro stations in DowntownDC BID Area (McPherson Square, Metro Center, Gallery Place- (2) The MCI (now Verizon) Center opened in December 1997 Chinatown, Archives-Navy Memorial-Penn Quarter, Federal Triangle, Mt. Vernon Square and Judiciary Square). at Gallery Place.
Source: WMATA
DowntownDC Business Improvement District 57 DC Circulator
DC Circulator ridership totaled 5.8 million in 2011. A new Circulator route opened across the Anacostia River, and planning is underway for the Circulator to add a National Mall route.
DC Circulator Annual Ridership, 2006–2011 (Millions) 5.8
6.0 4.9
5.0 4.0
4.0 2.7 2.4 3.0 2.1
2.0
1.0
0.0 Annual Percent 2006 2007 2008 2009 2010 2011 Increase in: Ridership – 16% 14% 46% 21% 19%
Vehicle Revenue Hours – -1% 14% 43% 9% 12%
Number of Routes 3 3 3 5 7 5 A DC Circulator bus carries passengers Source: WMATA through Downtown.
Walking and Biking
According to the 2010 American Community Survey, the number of city residents walking to work increased from 11.1% to 11.8%. The number of DC-based workers walking to work rose from 4.4% to 4.6%.
Capital Bikeshare began operations in September 2010 and reached its breakeven point (positive cash flow) in the past few months.
(1) Capital Bikeshare Data: 2011-2012
Jan. 2011 Jan. 2012 % Change Number of Bicycles 780 1,170 50% Number of Members 5,500 19,000 245%
Member Trips 2011 Trips
Total System 994,000 Ending in the 143,573 14% of DC DowntownDC BID Area Pass Trips Total System 228,000 Ending in the 46,000 20% of DC DowntownDC BID Area
(1) System opened in September 2010. Five out of six Capital Bikeshare riders are annual Sources: Capital Bikeshare and DowntownDC BID members, totaling 19,000 as of January 2012.
58 Transportation 2011 State of Downtown Streetcar Proposed DC Streetcar System Lines Transportation
DC Streetcar is currently planned as a 37- ST 16TH
mile, $1.5 billion streetcar system to absorb GEORGIA GEORGIA some Metrorail ridership, bring transit to city
MILITARY RD AV
CO E neighborhoods that have only bus service, 14TH NN
E CT ST and encourage economic development in ICUT MASSACHUS
WIS AV
E CO E neighborhoods lacking in substantial retail and AV ETTS NS
I GAN AV N AVE E E CHI MI D AV other amenities. AN ISL DE RHO The DC Streetcar system is scheduled to have its
first segment running in the second half of 2013 K ST H ST from Union Station along H Street, NE, to Benning BENNING RD 8TH ST 7TH ST Road and Oklahoma Avenue, NE. INDEPENDENCE AVE
M ST The city has dedicated $99 million of capital PENNSYL VANI GOO A AVE D HOP
funding to start the streetcar system and is POTOMAC RIVER E RD currently working on financing plans for the “One MLK JR AVE City” line from the Benning Road Metro Station in Ward 7, through Downtown along K Street, to the Key Bridge in Georgetown. Proposed Streetcar In February 2012, a DC Office of Planning Existing Streetcar Land Use Study showed the streetcar Metrorail N would have a significant economic development impact throughout the proposed system. As shown on this page, property values would Property Value Increases Along the Steetcar Corridors increase significantly, for both existing and new (Approximate; in millions) properties. In addition, retail and residential $3.0 Aggregate increase in development would generate sales and individual value of existing property Aggregate value of income taxes for the city. The study projects the $2.5 new property total annual tax increment (property, income and sales taxes) of the DC Streetcar will be $2.0 $238 million to $291 million once the system is $1.5 completed. This will allow tax increment financing
(TIF) and other value capture financing tools $1.0 to be used, partially to fund both the system's construction and its operating costs. $0.5
0.0 123456789
DC Streetcar Corridors
1 Martin Luther King Jr. Avenue, Firth Sterling Avenue, and South Capital Street 2 Good Hope Road and Minnesota Avenue 3 Capitol Riverfront, Buzzard Point, Capitol Hill, and 7th Street 4 K and H streets to Union Station; F, 14th, and 7th streets downtown 5 H Street/Benning Road 6 14th Street, 18th Street (Adams Morgan), U Street, Florida Avenue and 8th Street 7 Rhode Island Avenue 8 Woodley Park, Columbia Heights, Washington Hospital Center and Brookland 9 Georgia Avenue and Takoma A DC Streetcar that will be in operation in 2013. Sources: DC Office of Planning; Streetcar Land Use Study report, February 2012
DowntownDC Business Improvement District 59 DC Financial Overview
The DC government recorded its 15th consecutive budget surplus in the fiscal year ending September 30, 2011, with a $243 million surplus. This allowed the city to increase its general fund balance (fund balance = assets minus liabilities) by $220 million, or 25%, and create a locally mandated reserve balance of $194 million.
DC’s General Fund Budgetary Surplus/Deficit and Cumulative Fund Balance History, 1992–2011 (Millions of $)
$1,500 Cumulative Fund Balance Budgetary Basis Surplus / Deficit $1,105
Revitalization Act $1,585 $1,494 $920
$1,000 $465
$515 $500 $444 $446 $325 $224 $292 $256 $281 $263 $243 $189 $109 $60 –$9–$110 –$147 –$61 $48 $54 0
– $518
-$500 9293 94 95 96 97 9899 00 01 02 0304 05 06 07 08 0910 11
Source: DC Comprehensive CONTROL PERIOD Annual Financial Reports
Recent DC legislation has as its goal Locally Mandated Reserves of $1 billion, or two months of local expenses.
Composition of DC General $81 Fund Balance, 2007-2011 (In Millions of $) $87
$592 $409 $136 Unassigned/ Assigned $91 Policy Decisions Reserved $246 $91 Reserved by External Factors $194 Locally Mandated Reserves $185 $173 Emergency/Contingency Cash Reserve $209 $158 Restricted for Debt Service $309 $330 $284 $338 $339
$327 $210 $232 $288 $345
TOTAL FUND BALANCE: $1,494 $1,245 $920 $890 $1,105 9/30/07 9/30/08 9/30/09 9/30/10 9/30/11 Source: FY 2011 Citizen's Financial Report (page 5)
60 DC Financial Overview 2011 State of Downtown DC Financial Overview 2011’s solid financial performance allowed DC to maintain its strong bond ratings on both the city’s Income Tax Secured and General Obligation Bonds. However, concern about the federal deficit’s impact on federal spending in DC and the region has caused one rating agency, Moody’s, to change the city’s rating outlook to “negative” from “stable" and stated as its reason, "the District’s unique exposure, as the nation’s capital, to federal government downsizing and the risk that such a downsizing could have on the finances of the District.”
DC’s Municipal Bond Ratings, 1992–March 2012 INCOME TAX SECURED REVENUE BONDS
CURRENT RATINGS OUTLOOK AA/AAA AAA Standard and Poor’s Stable AA Aa1 Moody’s Stable A/AA AA+ Fitch’s Stable
A
BBB/A GENERAL OBLIGATION BONDS BBB CURRENT RATINGS OUTLOOK BB/BBB INVESTMENT GRADE A+ Standard and Poor’s Stable BB Aa2 Moody’s Negative (1) B/BB AA – Fitch’s Stable
1/921/93 1/94 1/95 1/96 1/97 1/981/99 1/00 1/01 1/02 1/03 1/041/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12
Source: DC Office of the Chief Financial Officer (1) Moody's Sept. 20, 2011 Press Release: " . . . reflects the District's unique exposure, as the nation's capital, to federal government downsizing and the risk that such a downsizing could have on the finances of the District.”
The city’s “better than expected” revenue growth in 2011 has given it more wriggle room under its self- imposed 12% cap on the ratio of annual debt service to locally funded expenses. The actual debt service to local expenditures ratio for 2011 was 10.2%, compared to last year’s projected ratio of 10.5% ratio for 2011. Each 0.1% reduction in the city’s debt service ratio allows for $60 - $80 million of additional investment capacity.
In recent years, DC has passed into law two self- imposed financial constraints: a 12% debt service to expenditure ratio, and a locally mandated reserve When the Capitol Crossing project is completed in goal of two months of local expenditures. These two 2018, it will generate $20 - $25 million in property, laws have costs that should be weighed against their sales and income taxes. benefits.
Debt Service as % of Expenditures, 1992–2018 (As of September 30 of each fiscal year)
15% 12.0% Cap on Debt Service as % of Expenditures = 12% 12% Revitalization Act 9% 11.2% 11.6% 9.3% 10.2% 6% 11.5% 8.3% Proceeds of 2001 tobacco bonds Cap is reached used to redeem $482 million of in FY 2018. 3% outstanding GO bonds
PROJECTION (1) 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 CONTROL PERIOD
(1) Projection based on Mayor Gray’s FY 2013 Proposed Budget and Financial Plan. Source: DC Office of the Chief Financial Officer
DowntownDC Business Improvement District 61 Over the past ten years, DC’s gross local revenues have grown 5.7% per year, compared to the Consumer Price Index's 2% per year growth. Fiscal year 2012 gross local revenue growth is projected at 5.0%, and 2013 at 1.2%
DC Gross Local Tax and Other Revenues, 1995-2016
DC Gross Revenues $8 6.6 (In Billions of Dollars) 6.1 6.2 5.4 5.8 4.7 $6 3.4
$4 2.7
ESTIMATE (1)
$2
0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
16% Growth of DC Gross Revenues (Percent change from prior year) 10-Year Annual Growth 10-Year Annual Growth Rate for DC Gross Local Rate for Consumer Price 12% Revenue of: 5.7% (2) Index of: 2% (2)
8%
4%
0
-4%
-8% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
(1) From OCFO February 2012 revenue estimate. (2) The 17-year annual DC Gross Local (3) Not Seasonally Adjusted, as measured (4) The 17-year Consumer Price Revenue Growth average is 4.9%. in January. The 10 year average is Index average is 2%. Source: DC Office of the Chief Financial Officer (OCFO) January 2002 to January 2011.
Commercial property and deed taxes as well as individual income taxes are the two major drivers behind the $2.1 billion, or 57%, increase in DC gross revenues since 2001.
DC Historical Commercial Property Assessment, Annual Percent Change, Fiscal Years 2002–2012
30%
28% 25 2000-2012 26% Annual Growth 23% 20 Rate of 11.6% 19% 15 14%
10 13% 11% 9% 9% 7% 5 3% 7% 2% -0.4% 0 -3% -5% -5% -5 -6%
-10 -13% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Sources : Comprehensive Annual Financial Reports (FY95-FY11) and the DC Office of Tax and Revenue (FY12 - FY13)
62 DC Financial Overview 2011 State of Downtown DC Financial Overview
(1) Commercial Property Tax Revenue History, 1995-2016
$1,500 Total Annual Commercial Property $1,220 $1,149 Tax Revenues (Millions of $) $1200 $1,418 $709 $900 $438 $409 $600
$300
0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 NA -20 -4 -1 -13 9 15 62 65 84 74 64 198 150 100 -1 -71 83 77 39 35 36 Yearly Dollar Change in Commercial Property Tax Revenues (2) 23% 20% ESTIMATE 25% Commercial Property Tax Revenues As a Share of Total Local Revenues (%) 20% 15%
15% 21%
10% 16% 12% 5%
0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Sources: DC Office of the Chief Financial Officer (OCFO) and the DowntownDC BID (1) Assumes commercial property tax revenues to be 67% of real property tax revenues. (2) From OCFO February 2012 revenue estimate.
Commercial property tax revenue grew from 12% of gross local revenues in 2000 to 20% in 2011.
Mayor Vincent C. Gray’s proposed Fiscal Year (FY) 2013 city budget includes a modest reduction in the commercial property tax rate to 1.55% from 1.65% (a 6.1% decrease) on the first $3 million of assessed value for a commercial property—if the revenue projections for FY 2013 rise by $109 million. This tax rate reduction will primarily benefit small building owners, as large property owners will only enjoy a 0.2% reduction in their property taxes, or $0.02 per SF. Hopefully, this strategy of improving DC’s regional cost competitiveness will continue with modest reductions to the 1.85% commercial property In 2011, Market Square's office space at 701 and 801 Pennsylvania tax rate on a building’s assessed Avenue, NW contributed approximately $25 million in tax revenues: value above $3 million. $18 million in deed taxes and $7 million in property taxes.
DowntownDC Business Improvement District 63 DC Resident Income Analysis, 1995–2011
Tax Filers by Annual Income Total Tax Filers Filers by Income Level as % of Total Filers Below $25,000 Below $25,000 400,000 Between $25,000 and $100,000 80% Between $25,000 and $100,000 Greater than $100,000 331,987 Greater than $100,000
56% 300,000 251,595 60% 52%
289,511 313,056 46% 44%
200,000 161,364 161,559 103,597 40% 147,355 116,706 39% 40% 41% 40%
15% 100,000 125,114 133,225 20% 12% 111,818 31,292 51,407 6% 8% 16,329 26,383
0 0 95 97 99 01 03 05 07 09 11 95 97 99 01 03 05 07 09 11
Source: DC Office of the Chief Financial Officer
From 2000 - 2011, DC’s population grew by 46,000; tax filers grew by 19,000; tax filers with incomes above $100,000 by 35,000; and annual individual income tax revenues by $220 million, including an 11% marginal income tax rate cut for tax filers with more than $40,000 (from 9.5% to 8.5%---going up to 8.95% for those earning over $350,000) and a tax rate cut of 20% to 55% for those earning under $40,000 per year.
Selected DC Tax Rate History, Fiscal Years 1996–2013 Increase from prior year Decrease from prior year Commercial Office Real Residential Real Deed Recordation Individual Income Tax Income Tax Property Tax Property Tax (1) and Transfer Tax Sales Tax Lowest Highest Multi-family Single General Restaurant Hotel 1996 6% 9.5% 9.975% 2.15% 1.54% 0.96% 2.20% 5.75% 10% 13.0% 1997 6 9.5 9.975 2.15 1.54 0.96 2.20 5.75 10 13.0 1998 6 9.5 9.975 2.15 1.54 0.96 2.20 5.75 10 13.0 1999 6 9.5 9.975 2.15 1.54 0.96 2.20 5.75 10 14.5 2000 5 (2) 9.5 9.975 2.05 (2) 1.34 0.96 2.20 5.75 10 14.5 2001 5 9.3 (2) 9.975 1.95 (2) 1.15 0.96 2.20 5.75 10 14.5 2002 5 9.3 9.975 1.85 (2) 0.96 0.96 2.60 5.75 10 14.5 2003 5 9.3 9.975 1.85 0.96 0.96 3.00 (4) 5.75 10 14.5 2004 5 9.3 9.975 1.85 0.96 0.96 3.00 (4) 5.75 10 14.5 2005 5 9.0 (2) 9.975 1.85 0.96 0.96 2.20 5.75 10 14.5 2006 5 (2) 8.7 (2) 9.975 1.85 0.92 0.92 2.20 5.75 10 14.5 2007 4 (2) 8.5 (2) 9.975 1.85 0.88 0.88 2.90 (5) 5.75 10 14.5 2008 4 8.5 9.975 1.85 0.85 0.85 2.90 (5) 5.75 10 14.5 2009 4 8.5 9.975 1.85 (3) 0.85 0.85 2.90 (5) 5.75 10 14.5 2010 4 8.5 9.975 1.85 (3) 0.85 0.85 2.90 (5) 6.00 10 14.5 2011 4 8.5 9.975 1.85 (3) 0.85 0.85 2.90 (5) 6.00 10 14.5 2012 4 8.95 (7) 9.975 1.85 (3) 0.85 0.85 2.90 (5) 6.00 10 14.5 2013 4 8.95 (7) 9.975 1.85 (3) (6) 0.85 0.85 2.90 (5) 6.00 10 14.5 (1) Residential property taxes are currently impacted by the following: a) The property’s taxable assessment increase is limited by a cap of 10%. b) Residential revenue increases are limited to 8%. Any projected increase due to this amount is used to reduce the residential tax rate (as happened in 2006–2009). c) All property is subject to a minimum taxable assessment equal to 40% of market assessments by the DC government. (2) These rates were reduced by the Tax Parity Act passed in 1998, which allowed for reduced rates if the national and DC economies were growint and DC tax revenues were growing. (3) The tax rate on the first $3 million of assessed value is 1.65%. (4) Deed and recordation tax for non-owner occupied property is 3.0%; for owner occupied property sold under $250,000 is 2.6%. (5) Deed and recordation tax for property sold for $400,000 and above is 2.9%; for properties sold under $400,000 is 2.2%. (6) The Mayor’s FY 2013 Budget includes a reduction of the 1.65% tax rate to 1.55% if the city's revenue estimates increase by $108.5 million by December 2012. (7) For income over $350,000
Source: DC Office of the Chief Financial Officer
Until the proposed, modest contingent reduction in the commercial property tax rate, major tax rate reductions over the past 11 years were directed only toward residents.
64 DC Financial Overview 2011 State of Downtown Downtown Downtown Fiscal Impact Fiscal Impact
Downtown’s net fiscal impact in FY 2012 is estimated at $846 million, compared to $797 million estimated for Downtown’s Net Fiscal Impact, FY 2012 FY 2010, and $624 million estimated for FY 2007. As in years past, Downtown’s net fiscal impact of $846 million DowntownDC BID Area In Millions pays for DC’s K—12 public education operating budget DC Local Tax and Other Revenues $970 ($802 million in FY 2012). Estimated Fiscal Costs –404 Net Fiscal Impact $566 DC’s Downtown (defined for this analysis as the DowntownDC BID and Golden Triangle Business Improvement Districts) is similar to many large city Golden Triangle BID Area Downtowns: an important funding source for city DC Local Tax and Other Revenues $448 operations because of Downtown’s high development Estimated Fiscal Costs –168 density, which generates significant commercial Net Fiscal Impact $280 property and transfer/recordation taxes and sales taxes. On the expense side, DC’s Downtown has a relatively low need for city services, with only one public school, Total Downtown Area minimal social service needs other than homeless DC Local Tax and Other Revenues $1,418 services, and a low police presence (though growing Estimated Fiscal Costs –572 because of the growing nighttime economy). DC’s Net Fiscal Impact $846 Downtown, however, does have continual homeless services needs and is the city’s primary beneficiary Downtown Revenue Share of its Metrorail subsidy and a major beneficiary of its of Total DC Gross Local Revenue 23% Metrobus and DC Circulator subsidies. of $6.07 billion in FY 2012
As noted throughout this report, the DC government Source: DowntownDC BID has strongly supported Downtown’s revitalization and received a very good return on its $505 million net It is DOWNTOWN AND the economic development investment as shown in the neighborhoods—not DOWNTOWN OR chart below. the neighborhoods.
DC Government Economic Development and Infrastructure Investments and Returns Summary
Investment Taxes Generated + Jobs Created
Private and DC Gov’t as DC Gov’t Federal Sectors % of Private Annual (Millions) (Millions) and Federal (Millions) 1995–2016 DowntownDC BID $505 $12,432 4.1% $523 65,000
1995–2016 Center City (1) 1,278 29,194 4.4 1,083 135,000
2014–2020 Center City (1) 500 13,031 3.8 699 55,600
Source: DowntownDC BID (1) Includes the DowntownDC BID area.
DowntownDC Business Improvement District 65 DC's development capacity of 100-120 million SF is estimated to generate new annual taxes of $800 million to $1 billion upon full build-out.
DC’s Development Capacity (As of April 2012) SF % DowntownDC BID Area 5 4% CBD, West End and Georgetown 5 4%
REST OF CENTER CITY Mount Vernon Triangle 5 4% NoMa 18 15 Capitol Riverfront 18 15 Southwest 5 4
ADJACENT TO CENTER CITY 14th and U Streets 4 3% H Street, NE 2 2
LARGE PROJECT AREAS St Elizabeths 6 5% Poplar Point 6 5 Hill East 2 2 McMillan Reservoir 1 1 Walter Reed 3 2
OTHER BY WARD Ward 1 2 2% Ward 2 1 1 Ward 3 2 2 Ward 4 4 3 Ward 5 10 8 Ward 6 1 1 Ward 7 15 12 Phase I of the CityCenterDC project is Ward 8 7 6 estimated to produce 3,800 permanent jobs TOTAL 122 100% and $30 million per year in taxes. Source: DowntownDC BID
Cost to DC of Office Tenants That Have Moved Out of DC, 2001-2014 (In millions)
■ 1.6 million SF of office space has left (on a net basis) 2.2 million SF of office space has moved in Share of Employees Moving 3.8 million SF of office space has moved out Homes Out of DC to Follow Jobs
■ “Lost” Tax Revenue Estimates 50% 100% Over the past 13 years, DC has lost (1) Property Taxes $13.3 million $13.3 million a net 1.5 million SF of office tenants Sales Taxes from Employees (2) 1.1 1.1 to Maryland and Virginia. This has Individual Income Taxes (3) 4.8 9.6 an estimated “opportunity cost” of $19.2 million $24.0 million $19 - $24 million per year in lost tax (1) 2.2 million SF * $450 per SF * 1.85%. revenues. (2) 2.2 million SF / 250 SF per employee (= 8,800 employees) * a. (210 work days less 20 days off) * 80% employees eat out * $8 per person * 10% tax rate b. Each employee spends $300 per year on shoppers goods * 6% tax rate c. Each employee goes out to dinner in DC ten times a year * $30 per dinner * 10% tax rate (3) 1.7 million SF / 250 SF per employee * 30% of employees live in DC (2,640 DC Residents) a. 50% of employees move: 2,640 * 50% * $5,000 in income taxes per year b. 100% of employees move: 2,640 * 100% * $10,000 in income taxes per year
Sources: WDCEP, CoStar, and the DowntownDC BID
66 Downtown Fiscal Impact 2011 State of Downtown Downtown Fiscal Impact
Developing 100 million SF to 110 million SF of development capacity in DC Fiscal Impact of will yield, upon full build-out, $800 million to $1 billion of new tax revenues Downtown DC Development per year. Taxes Generated Type of 100,000 Based on Downtown’s high quality projects and construction, the following Per SF SF Project Development table presents estimates of the fiscal impact of different development types Office $14 $1,400,000 for 2012–2015. Hotel $60 $6,000,000 Restaurant $71 $7,100,000 Retail $38 $3,800,000 Fiscal Impact of Future Downtown Projects Apartment $14 $1,400,000 (All figures in millions of $) DC Tax Revenues Generated Condo $15 $1,500,000 Project Project Size Total Property Sales Income Source: DowntownDC BID CityCenterDC Phase 1 700 30 15 7 8 Phase 2 150 11 4 7 - Phase 3 200 12 8 2 2 Marriott Marquis Hotel 550 21 9 12 - Old Post Office Hotel Project 200 12 3 9 0 Capitol Crossing 1,250 24 15 3 6 Once completed, several (I-395 Air Rights Project) planned and current Downtown Walmart Mixed Use Project at H Street 215 14 7 3 4 development projects will TOTAL 3,265 124 61 43 20 collectively generate more than Source: DowntownDC BID $100 million in new annual taxes.
The Old Post Office Pavilion redevelopment by Trump Hotel Collection will create 150 - 200 permanent jobs and $12 million in new annual taxes upon completion.
Downtown’s net fiscal impact of $846 million for FY 2012 pays for DC’s K—12 Public School FY 2012 operating budget of $802 million.
DowntownDC Business Improvement District 67 Regional Competition
The DowntownDC BID area and DC economies compete in regional, national and global markets. Both economies are performing well in all economic sectors, with the exception of shoppers’ goods retail. Fortunately, because of forward-thinking city planning, the Downtown and DC retail landscapes are rapidly changing for the better: Phase I of the under construction CityCenterDC project and several neighborhood retail developments, many of which will be anchored by one of the six Walmart’s opening in DC over the next few years.
Why should Downtown and DC care about competition? Losing current tenants would cause property values and tax revenues to decline If Downtown and DC cannot attract businesses, organizations and residents, then the city’s more than 100-120 million SF development capacity will not be realized, meaning the expected $800 million to $1 billion in new annual taxes from such development would not be realized, leaving DC with significantly lower funding to maintain the city’s progressive social agenda Ballston just started to develop but all of Ballston's development should have occurred in DC's NoMa, Mount Vernon Triangle and the Capitol Riverfront neighborhoods, had DC been “open to development” from 1980 to 1995
Of particular note in 2011 was DC's increased market share in both employment and population: DC’s employment market share increased to 24.23% from 24.08% DC’s population market share increased to 10.98% from 10.85% Below average annual announcements from businesses or organizations that they are leaving the Downtown or DC for Maryland or Virginia DC’s market share of under construction multifamily housing ranged between 25% to 30%, compared to DC’s regional population share of 11%
DC’s major competitive advantages for office space users are: Proximity to the federal government Best regional access to labor, particularly the young urban-centered workforce in new Internet savvy businesses Access to mass transit, with the DC Streetcar system as a key, new transit option A high-quality amenity base of office space, hotels, restaurants, entertainment, nightlife, and more recently, multifamily housing in many new neighborhoods close to Center City office jobs
If Downtown and DC cannot retain their existing office tenant base and attract corporations, they risk losing millions of dollars of current annual commercial property tax revenue and they will not capture the $800 million to $1 billion in new annual taxes from building out the city’s current 100 million SF to 120 million SF of development capacity.
68 Regional Competition 2011 State of Downtown Regional Competition
Access to mass transit is a major competitive advantage for Downtown.
DC’s major competitive disadvantages are: High cost of doing business such as tax rates (commercial property, income and deed), business fees and market forces on rent levels High level of regulation, including the First Source program, the Tenants Opportunity to Purchase Act dealing with apartment sales, Mandatory Inclusionary Zoning, and the Historic Preservation Program Current ethics investigations of several political leaders
Over the past 13 years, DC has lost a net 1.6 million SF of office tenants to Maryland and Virginia.
(1) Regional Tenant Movement Data for DC Office Market, 2001-2014 (Thousands of SF)
Tenants Moving Out of DC Private and Tenants Tenants DC Net By New Location (%) Small Federal Moving Moving Tenant Moves Into DC Out of DC Movement Maryland Virginia 2013/2014 50 0 50 NA NA 2012 27 -121 -94 21% 79% 2011 72 -160 -88 5 95 2010 300 -64 236 34 66 2009 37 -154 -117 79 21 2008 88 +=-556 -468 4 96 2007 53 -595 -542 7 93 2006 82 -312 -230 22 78 2005 102 -438 -336 8 92 2004 17 -426 -409 55 45 2003 155 -359 -204 14 86 2002 15 -104 -90 2 98 2001 134 -63 71 20 80 Subtotal 1,132 -3,352 -2,220 19% 81%
Large Federal Moves FDIC (2006) 0 -474 NavSea (2001-2003) 1,050 0
TOTAL MOVEMENT 2,182 -3,826 -1,644 17% 83%
Sources: WDCEP, CoStar, and the DowntownDC BID (1) Data as of March 4, 2012.
DowntownDC Business Improvement District 69 List of Largest Tenant Moves Into/Out of DC From/To Maryland and Virginia, 2001-2014
Largest Moves In Size Year
1. NavSea 1,050,000 SF 2001-2004 2. CoStar 151,000 2010 3. Anteon/Alion Corporation 123,000 2003 4. Northrop Grumman 92,000 2001 5. American Chemistry Council 87,000 2010 6. American College of Cardiology 85,000 2005 7. Independent Community Bankers of America 51,000 2006 8. United Negro College Fund 50,000 2013 Crystal City has benefited from several 9. U.S. Parole Commission (DOJ) 36,000 2011 DC tenants moving into its office 10. LECG Corporation 33,000 2001 buildings between 2003 and 2008. Largest Moves Out
1. FDIC 474,000 SF 2006 DC’s high effective 2. Corporate Executive Board 465,000 2008 marginal commercial 3. The Bureau of National Affairs, Inc. 250,000 2007 4. Towers Watson & Co. 175,000 2005 property tax rate of 5. Union Labor Life Insurance Corporation 154,000 2004 1.875% is 30% to 88% 6. KPMG 117,426 2011 7. Conservation International 101,000 2006 higher than suburban 8. American Psychiatric Association 96,000 2003 commercial property tax 9. Carlyle Group 70,000 2012 rates, which range from 10. Howrey, Simon, Arnold & White 60,000 2004 1% to 1.46%. Sources: WDCEP, CoStar, and the DowntownDC BID
COST COMPETITION
Over the past 15 years, DC’s rental rates have grown more rapidly than those in Maryland and Virginia suburbs (see chart on page 26). This is partly because of market demand, a DC government policy decision to compensate for not having a commuter income tax, and commercial property tax rates.
The current commercial property taxes per SF competitive disadvantage for Downtown and DC Class A office is between $5.93 and $7.26 per SF, or $6 million to $7 million on a 100,000 SF ten-year lease.
At 35-stories, 1812 North Moore in Rosslyn, VA, will be the tallest office tower in metropolitan Washington, DC. Monday Properties, the project developer, stresses "... Spectacular views, and... Rosslyn's Low Real Estate taxes..." in its promotional materials.
70 Regional Competition 2011 State of Downtown Regional Competition
Competitive Disadvantage of DC’s Office Property Tax Rate, FY 2013 (Proposed as of March 2012)
DowntownDC Virginia Maryland BID Arlington Fairfax Silver Alexandria Crystal City Rosslyn Tysons Reston Bethesda Spring
Tax Rate on First $3 million 1.650% 0.971% 0.964% 0.964% 1.080% 1.080% 1.180% 1.405% of Assessed Value Tax Rate on Assessed Value 1.850% 0.971% 0.964% 0.964% 1.080% 1.080% 1.180% 1.405% Over $3 Million
Business Improvement Tax 0.030% (a) - 0.043% 0.080% - 0.047% (c) - (e) - (e) Stormwater Tax 0.002% (b) 0.005% 0.014% 0.014% 0.025% 0.025% 0.003% 0.003% Transportation Tax - 0.022% 0.125% 0.125% 0.110% 0.110% 0.047% 0.047%
Silver Line Special - - - - 0.220% 0.150% (d) - - Assessment Total 1.875% (b) 0.998% 1.146% 1.183% 1.435% 1.412% 1.230% 1.455%
150,000 Class A Building Example
■ Value in Submarket $600 $400 $400 $450 $300 $350 $400 $275 ■ Tax Rate 1.875% 0.998% 1.146% 1.183% 1.435% 1.412% 1.230% 1.455% ■ Taxes Per SF $11.252 $3.992 $4.584 $5.324 $4.305 $4.942 $4.920 $4.001
DC Taxes Per SF Competitive Disadvantages NA $7.260 $6.668 $5.929 $6.947 $6.310 $6.332 $7.251
■ Due to Taxe Rate NA 3.509 2.917 3.116 1.321 1.622 2.581 1.156 — % of Difference NA 48% 44% 53% 19% 26% 41% 16% ■ Due to Higher Value NA 3.751 3.751 2.813 5.626 4.688 3.751 6.095 — % of Difference NA 52% 56% 47% 81% 74% 59% 84%
(a) The DowntownDC BID's FY13 proposed rate is $0.16 per SF. (c) Reston has an additional 0.047% tax for the Reston Community Center District. (b) Estimate based on 150,000 SF building valued at $600 per SF with 10 FAR. (d) The Phase II Assessment may be increased to as much as .21% (e) The Bethesda Urban Partnership and the Silver Spring Urban District are funded through the parking district and urban district compenents of the tax rate. Source: DowntownDC BID
DowntownDC BID Area Average Real Property (1) (2) Taxes Per SF, For Tax Years 2001–2013
$12 $10.01
$10
$8 $5.91 $9.02 $6 $3.03 $7.54 $4
$2
0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 $148 $150 $213 $231 $276 $298 $319 $409 $488 $526 $517 $408 $487 $541
Value Per SF
(1) Based on assessments of a sample of office properties in the Downtown BID; sample sized increased from 31 to 41 for years 2007-2013. (2) In order to calculate the impact of the 1.65% tax on the first $3 million of value, building size of 200,000 SF is assumed (this lowers the taxes $0.03 per SF).
Source: DowntownDC BID
DowntownDC Business Improvement District 71 Regional Comparison of Average Office Property (1) Taxes Per SF, 2001-2012
$11 Washington DC VIRGINIA Prince William $10 Loudoun Fairfax Arlington $9 Alexandria MARYLAND $8 Silver Spring Bethesda $6.73 or 61% $5.40 or 57% $7 of DC’s of DC’s taxes per SF taxes per SF As the value of DC office buildings has $6 risen without a significant reduction in the commercial property tax rate, and
$5 surrounding jurisdictions have lowered their commercial property tax rates, DC’s
$4 commercial property taxes per square foot $2.34 or 52% of disadvantage have grown to $5.40 for an DC’s taxes per SF average DC office building from $2.34 per $3 SF in 2002.
$2
$1
0 01 02 03 04 05 06 07 08 09 10 11 12
(1) Includes the base tax rate, transportation tax rate and county-wide rates. The base tax rates include dedicated funding that varies by jursidiction. Sources: Cushman and Wakefield and Comprehensive Annual Financial Reviews and Budgets for jurisdictions
Regional Commercial Real Property Tax Rates (1) As a % of DC Tax Rate, Fiscal Year 2013 (Proposed as of March 2012)
100% At this level jurisdictions’s tax rate is equal to DC.
80% 76% 75% 77%
60% 65% 61% 63% 53%
40%
20%
0 Alexandria Crystal City Rosslyn Tysons Reston Bethesda Silver Spring
ARLINGTON FAIRFAX MONTGOMERY
Virginia Maryland
(1) Includes base tax rate plus BID taxes, stormwater fees/taxes, the Silver Line special assessment and Arlington and Fairfax transportation taxes.
Sources : DC Mayor's Budget, Virginia Department of Planning and Budget and Maryland Department of Budget and Management
72 Regional Competition 2011 State of Downtown DC has few large corporate employers, partly Regional Competition due to the high commercial income tax rate.
Regional Commercial Income Tax Rates As a % of DC Tax Rate, Fiscal Year 2013 (Proposed as of March 2012)
100% At this level jurisdictions’s tax rate is equal to DC.
80% 83% 83%
60% 60% 60% 60%
40%
20% Blackboard is one of the few corporations located in 0 Alexandria Arlington Fairfax Montgomery Prince George’s Downtown or DC.
Virginia Maryland
Sources : DC Mayor's Budget, Virginia Department of Planning and Budget and Maryland Department of Budget and Management
Blackboard, a leading provider of education and learning software located in Downtown, had sales of $413 million in 2011 and pre-tax profit of $23 million. By simply moving to Virginia, Blackboard would have paid $900,000 less in local corporate income taxes (approximately $500,000 net, after adjusting for the value of the federal tax deduction for local and/or state income taxes).
AMENITY COMPETITION
As stated throughout this report, DowntownDC and DC’s economies are performing well, despite a significant cost disadvantage to Virginia and Maryland because of the city’s many amenities, particularly proximity to the federal government, access to transit and several urban and walkable neighborhoods. However, as shown by the Rosslyn-Ballston Corridor, Alexandria, Downtown Bethesda, Silver Spring, and National Harbor, the city’s regional competitors ARE also competing on amenities. Plans for Crystal City, North Bethesda and Rockville, Potomac Yards, the New Carrollton Metro Station, and Konterra show that developers are hedging their risks by developing new urban places with local government support.
Neighboring jurisdictions are adding urban amenities, as shown by this Capital Bikeshare station in Crystal City, VA.
DowntownDC Business Improvement District 73 Bethesda Row's urban atmosphere, which includes outdoor cafés, has succeeded in attracting several of DC's most successful restaurants, such as Jaleo and Taylor Gourmet.
Regional transit plans in Maryland and Virginia total $8.1 billion dollars and regional urban placemaking plans total another $600 million to $1 billion.
Regionally Significant Transportation Project List, 2000-2020 Development Potential Unlocked Cost Estimate Completion SF Time Horizon Comment Regional Sub-Market Project Description (Millions of $) Date (Millions) Complete 1. District of Columbia Metrorail Infill Station $105 4Q 2004 25 2007- 2020 in NoMa 2. DC, MD and VA Wilson Bridge 2,500 2008 - NA Substantially 3. Montgomery and Prince New Highway – 18 Miles 2,600 2014 NA 2014- 2034 Completed George’s Counties Intercounty Connector Under 4. District of Columbia 11th Street Bridge 300 2013 - NA Construction 5. Fairfax County I-495 HOT Lanes 1,900 2012 - NA 6. Tysons Corner Metrorail Expansion – 2,900 4Q 2013- 150 2013-2043 Silver Line Phase I 2Q 2014 Funding for new roads, street C 98; grid and parks required C=; ; before full development (4 in Tysons Corner) potential is unlocked 7. District of Columbia DC Streetcar 1,500 Fall 2013- 30 H Street, NE, Revitalization 2018 already underway Planning 8. Fairfax County I-95 HOT/HOV Lanes 940 2015 - NA 2012 9. District of Columbia Frederick Douglass Bridge 800 2016/2017 - NA 10. Potomac Yards Metrorail Infill Station 240 2016/2017 10 NA C198 7= NoMa Station 2013/14 C1A :< sector contribution
2014 11. Loudon and Fairfax Metrorail Expansion – 2,700 2016 50 Projects will begin 24 to 18 Counties Silver Line Phase II months before completion Projected C 98; ground- C =; ;, breaking including Dulles Airport date 12. Crystal City Streetcar thru Crystal City 150 2016/2017 3 Set-up TIF District in 2010 CD98; 13. Montgomery and Prince Purple Line Light Rail 1,900 2018/2020 10- Funding is not set, and some George's Counties CD 98s 20 route issues unresolved 2015 CD=; s 14. Arlington County Streetcar fr9 250 2017 3 Lining up financing $?$89 CD98; 15. North Bethesda Bus Rapid Tranist 580 TBD 15 Still in the planning phase; Rockville Pike could be up to $2.5 billion if CD!98s dedicated lanes are added 16. Montgomery County Transit to Great Seneca 490 TBD 100 Debating Bus Rapid Transit Science Corridor (BRT) vs. Light Rail, and have (Science City) not determined funding Far in the 17. Montgomery and -= 9 0<r NA NA NA Being talked about, but no Future Fairfax Counties Bridge gov’t planning has started
Source: DowntownDC BID
74 Regional Competition 2011 State of Downtown Regional Competition
Regionally Significant Urban Placemaking Project List, 2000-2020 Total New Total Development Project (Ranked by completion date) Capacity of Placemaking Start/ Project Area Cost Regional Sub-Market Project Name Description Completion (Millions of SF) (Millions of $)
1. Prince George’s County National Harbor Greenfield Development 2004 / 2012-18 15 $300 2. Capitol Riverfront The Yards Street Grid and Park 2008 / 2012 20 150 3. Crystal City Crystal City Plan Street Grid and Parks 2014 / NA 10 100 4. North Bethesda White Flint Street Grid and Parks 2013-14 / NA 5 50 5. Wheaton Metro Stop Deck Deck Over Metro Station 2013-14 / NA 3 40 6. Tysons Corner Tysons Corner Street Grid, Parks, Bike Lanes 2013-14 / NA 75 400 7. Anacostia, DC St Elizabeths East Street Grid and Infrastructure 2013-14 / NA 5 130 8. North DC – East of Park Walter Reed Street Grid, Parks and Infrastructure 2013-14 / NA 5 50 9. Ward 7 – DC Parkside Street Grid, Parks and Infrastructure 2013-14 / NA 3 NA 10. Prince George’s County New Carrollton Street Grid and Infrastructure 2014-15 / NA 3 NA
Source: DowntownDC BID
Tysons development capacity is estimated to be as high as 150 million SF compared to DC's 122 million SF of development capacity.
SCOPE OF THREAT OF COST AND
AMENITY COMPETITION Regional Development Capacity (As of April 2012) SF SF How big is the threat facing Downtown and (MM’s) (MM’s) DC? Based on an estimate of development Downtown 10 Maryland 240 I-270 Corridor 100 capacity at regional transit and other activity Rest of DC 112 Other Montgomery County 40 centers, the region could grow by 15 - 20 million Center City 46 PG County 100 SF per year for 25 years without any growth in Large Projects 18 DC! What is the probability of this happening? Neighborhoods 48 Virginia 300 It is not likely, although investments were made Tysons Corner 150 in the Rosslyn-Ballston Corridor and Bethesda Other NoVa 150 from 1985 to 1997 when relatively little to no Total for DC 122 Total for MD and VA 540 investments were made in DC, particularly in Source: DowntownDC BID residential development.
The region could grow at 15-20 million SF a year for 25 years without any growth in DC, based on current regional development capacity
IMMEDIATE COMPETITIVE THREAT
The years 2012 and 2013 will test the high-cost, high value proposition offered by Downtown and the rest of DC significantly as Crystal City begins leasing 2 million SF of space vacated by government defense offices and defense contractors caused by BRAC. Government operations will move to more secure locations in nearby Northern Virginia. Lease rates will likely be $15 to $20 lower per SF than Downtown and $8 to $15 lower per SF than Mount Vernon Triangle, NoMa and Capital Riverfront. Then add Crystal City’s TIF funding plan for new streetscape, parks and a streetcar. How will Downtown and DC respond?
DowntownDC Business Improvement District 75 Downtown's proximity to the federal government and its many other amenities continue to support its economic success despite significantly higher operating costs for
businesses and tenants. The Chinatown Arch is located at the center of Downtown’s entertainment and restaurant activity.
NEAR-TERM COMPETITIVE THREATS Tysons Corner, particularly residential development. Also, Metrorail will provide service in Tysons some time between December 2013 and June 2014, and the federal government will likely have offices there as the area satisfies its “access-to-transit” requirements. Tysons' development capacity is estimated to be as high as 150 million SF Potomac Yards. An infill Metrorail station could open in 2017. The Potomac Yards development capacity is estimated at 7-10 million SF Rockville Pike, from the Grosvenor Metrorail Station to the Shady Grove Metrorail Station New Carrollton Metro, Marc and Amtrak station areas
LONG-TERM COMPETITIVE THREATS
There are too many to mention, but a few warrant highlighting: All Prince George’s County Metro sites Konterra and all 21 station sites along the Purple Line Science City in Montgomery County, particularly if a light rail line is built
The Verizon Center draws 2.5 million patrons per year to Downtown.
76 Regional Competition 2011 State of Downtown Notes Notes
DowntownDC Business Improvement District 77 Notes
78 Notes 2011 State of Downtown
The nighttime economy is growing in the DowntownDC BID area. Credits
AECOM Landmark Theatres Commerce, Office of Travel and Tourism Industries Americans for the Arts Lodging Econometrics US Green Buildings Council BASIS Charter School Marian Koshland Science Museum Warner Theatre Bureau of Labor Statistics Massachusetts Technology Washington Convention Center for Regional Analysis, Collaborative for the State of Center Authority George Mason University California Sustainable Building Task Force Washington Metropolitan CoStar Group, Inc. Airports Authority Cushman & Wakefield Metropolitan Washington Council of Governments Washington Metropolitan DC BID Council Area Transit Authority National Archives DC Greenworks Washington, DC Economic National Building Museum Partnership DC Office of Planning State Data Center National Gallery of Art Woolly Mammoth Theatre DC Office of the Chief National Law Enforcement Financial Officer Memorial Research Delta Associates National Museum of Women Jeannette Chapman in the Arts Destination DC National Park Service Data and Graphics District Department of the Farhana Hossain Environment National Theatre Photography Naval Heritage Center District Department of Kevin Koski Transportation Newseum Liz Lauren Ehpien (Flickr) ESRI Real Capital Analytics Ford’s Theatre Regal Entertainment Group Graphic Design Adrian Saunders General Services REIS Administration Printing Shakespeare Theatre Helen Hayes Awards Stephenson Printing, Inc. Smith Travel Research Holocaust Museum Printed April 2012 Smithsonian Institution HVS International US Census Bureau InfoUSA US Department of International Spy Museum 1250 H Street, NW 202-638-3232 PHONE DowntownDC Suite 1000 202-661-7599 FAX Business Improvement District Washington, DC 20005 www.downtowndc.org
N St. Scott Circle Thomas Circle 6th St. 5th St. 13th St. 12th St. 11th St. 10th St. M St. Walter E. Midtown Massachusetts Ave. Shaw Northwest Washington One Pierce St. Convention Center L St. New York Ave. New Jersey Ave.
L St. 16th St. L St. 395 1st St. NW Vermont Ave. NoMa K St. K St. Mt. Vernon K St. Square Mount Vernon McPherson Franklin Square Square Triangle Eye St. Eye St.
CityCenter DC Chinatown
Massachusetts Ave. H St. N. Capitol St. H St. H St. Lafayette 1st St. NE Square New York Ave. Gallery Place G St. G St. White House Verizon Georgetown Center Law School Union F St. Station 395 Old Executive U.S. Treasury New Jersey 5th St. 12th St. 4th St. 14th St. 13th St. 6th St. 3rd St. 9th St. Office Building Department 11th St. 10th St. E St. Penn 2nd St. Quarter 1st St.
. Pennsylvania Ave. D St. Ave. Ronald The Ellipse Reagan Indiana Ave. Buiding C St. Federal Louisiana Ave. Capitol Triangle Delaware Ave Hill Constitution Ave.
National Mall US Capitol
About the DowntownDC BID
The DowntownDC Business Improvement District (BID) is a private non-profit organization that provides capital improvements, resources and research to help diversify the economy and enhance the Downtown experience for all. This special district, where property owners have agreed to tax themselves to fund services, encompasses a 138-block area of approximately 825 properties from Massachusetts Avenue on the north to Constitution Avenue on the south, and from Louisiana Avenue on the east to 16th Street on the west. As a catalyst, facilitator and thought leader, the DowntownDC BID promotes public/private partnerships to create a remarkable urban environment. For more information, visit www.DowntownDC.org.