D.C.’s New Downtown Plan Calls For $400M Investment, Height Act Study

A coalition of downtown leaders commissioned by Mayor Muriel Bowser is recommending hundreds of millions of dollars in investments and a series of policy changes to revive the city's struggling central business district. 

The Downtown Action Plan, which Bowser unveiled Monday at downtown's Woolly Mammoth Theatre, lays out a vision and a series of recommended steps for taking on some of the most pressing hurdles the area faces today. 

With a proposed $401M investment over five years, the plan looks to expand the types of economic activity that occur downtown and draw a wider range of visitors. It calls for providing new tourist attraction corridors, drawing businesses and universities, focusing on public safety efforts and pressing forward on residential conversions in order to reimagine how downtown functions.

As part of its effort to spur housing development, the plan calls for studying possible changes to D.C.'s height limit in certain areas, which would need to be approved by Congress but could have major implications for property owners. 

The investment recommendation is for fiscal years 2025 through 2029, beginning with $39M in the first year. The mayor is expected to release her formal budget proposal in the coming weeks for the D.C. Council to debate. 

The plan is the result of an eight-month public-private effort to put the mayor's Comeback Plan vision into actionable steps. Bowser awarded the project to the DowntownDC Business Improvement District in May. The BID worked with the Golden Triangle BID, the Federal City Council and the office of the Deputy Mayor for Planning and Economic Development.

Like downtowns across the country, the pandemic landed blows to D.C.’s commercial corridors, with fewer people coming into the office, an uptick in crime and a spate of retail and restaurant closures.

There is more distress expected in the region as the federal government continues to shed space, office valuations sink and the Washington Capitals and Wizards prepare move to Virginia, leading to millions of dollars in projected tax revenue losses. The Downtown Action Plan is part of the city’s effort to turn that trajectory around.

The plan anticipates that if all the recommendations are enacted, downtown D.C. would achieve above pre-pandemic levels of activity and restore the District’s tax revenues.

The report says downtown annual tax revenue has fallen $243M since 2019 and is on track to decline another $193M in the submarket over the next five to ten years if no action is taken. 

The changes are designed to generate more than $2.6B in annual local fund revenues, a $294M increase from current levels and $487M more than the submarket would generate without intervention, per the report.

“We know that the District's budget is tight, but we carefully selected investments that we felt would return yield in tax revenue and would spur private sector development,” Golden Triangle BID Executive Director Leona Agouridis said at a Monday press conference.

The plan prioritizes some recommendations to begin now, like creating legislation to target organized retail theft, creating a program to assist foreign businesses in expanding to D.C. and establishing a grant program to encourage residential amenities downtown. 

Another key action it recommends the city take now is launching a study of areas that would benefit from “modest changes” to the Height Act.

The federally directed cap on how tall buildings in the District can rise, which limits most to about 130 feet, limits the income owners can get from their properties. In a difficult economic environment with high interest rates and construction costs combined with softening rents, owners have cited the rule as a barrier to making projects pencil. 

“The challenges that the current Height Act places in terms of just the restrictive nature of building and what that does in terms of making it viable to build here, it's worth exploring” DowntownDC BID President and CEO Gerren Price told Bisnow.

“That's something that doesn't necessarily cost money, but that we can look at as a policy change that could actually really unlock the key for a lot more building, production of a lot more housing units and could become a real game changer for downtown,” he added.

Other recommended initiatives labeled as "near-term" include a 10-year suspension of the Tenant Opportunity to Purchase Act for new housing projects and an expansion of D.C.'s Vitality Fund.

There are additional long-term recommendations, like creating a Downtown Business Resource Center, securing funding for Metro station modernizations and creating a multi-modal, urban promenade on K Street. 

The Downtown Action Plan also highlights five geographic sections of downtown that it recommends be dedicated to certain types of development and attractions. 

It recommends the “Historic Green Triangle,” between Farragut Square, Franklin Park and Lafayette Square solidify its identity as a tourism hub, and “Downtown West” in the Golden Triangle south of Dupont Circle as a new entertainment, hospitality and cultural district. 

The plan suggests the area west of the White House, Penn West, should be positioned as a tech, social sciences and policy innovation hub. It envisions the “Penn Quarter/Chinatown,” encompassing the National Portrait Gallery and Capital One Arena, as an arts and culture district. 

It also recommends “Downtown East,” the federal building-heavy stretch along the route between the FBI headquarters and the Capitol, as an opportunity to create a new university district and repurpose federal property. 

In conjunction with the Downtown Action Plan, the Office of Planning unveiled its Public Realm Plan Monday, focused on public space improvements, connections between neighborhoods and more multimodal and green urban spaces for entertainment. 

The plan focuses specifically on improvement to streets, sidewalks, plazas and parks, and it envisions four major projects to reimagine the urban landscape in the Golden Triangle and DowntownDC BID regions. 

It estimates initial costs for three projects, branded as I Street Gateway, Connecticut Avenue Capital Promenade and Gallery Place Festival Plaza, to be between $750K and $1M, plus another $500K to $750K for the Vermont Avenue Connector.