'We Need To Be More Aggressive’: Developers Call On D.C. To Take Bigger Steps To Revive Downtown

As D.C. works to recover from the effects of the pandemic on its economy, some of the city's top developers say it needs to take big swings and make substantial investments to spur growth.

Developers and business leaders at Bisnow’s D.C. State of the Market, held Tuesday at the Omni Shoreham Hotel, argued that there is an opportunity now — three years after the coronavirus pandemic emerged and changed the way people live and work — to rethink how this city functions, across every aspect of its built environment. 

“This is an inflection point,” Urban Atlantic President Vicki Davis said. “It is bar none the biggest opportunity going forward for us to have a little vision.”

Davis pointed to some of the big investments the District has made in the past to prepare its waterfront areas for the growth that they are now experiencing. 

“This city has done this before. That's really brilliant news," Davis said. "Under Mayor Williams, we've done this before. Take a look around. Take a look at the Wharf; take a look at the Capitol Riverfront, the Navy Yard. Take a look. It's happened. And there were some pretty good supports.”

But some real estate executives said the city isn't taking big enough steps to achieve the level of change that is needed. 

“You can't take sort of a small step. You've got to take a real swing,” Brookfield Executive Vice President Bobby Swennes said. “And that's my concern is whether or not we're as the District taking a big enough swing ... we need to be more aggressive."

D.C. is facing record-high office vacancy rates, and Swennes — whose firm is one of the city's largest office owners — said the District government needs to be more proactive about courting private sector businesses to expand to the city. 

“The District has been really, really challenged in attracting private sector business. And there's a variety of reasons for that, but one of the major reasons is they don't really try,” Swennes said. 

He said D.C. has "great things to sell" but not enough people whose full-time job is attracting businesses. He said Fairfax County has “three, four or five” times the number of people working in those types of jobs as D.C.

EYA Chief Acquisitions Officer Aakash Thakkar said he thinks Mayor Muriel Bowser has the right intentions, but he wants to see her administration take bigger steps to revive the downtown economy.

“There's an opportunity for the District to kind of put everything on the table as it relates to rebuilding downtown, as it relates to heavy recruitment and retention of companies that aren't in the District today, to come back to our downtown,” Thakkar said.

When reached for comment about its efforts to revive downtown and attract businesses, the Bowser administration pointed to a series of steps it has taken in recent months. 

D.C. has put in place tax abatements for downtown office-to-residential conversions. Its Comeback Plan, released in January, proposes measures to streamline zoning and permitting processes. This spring, the District launched a Downtown Action Plan; its first step is hearing from residents and businesses about what they would like to see downtown moving forward. 

Additionally, a spokesperson for the Deputy Mayor for Planning and Economic Development said the office has been working with the Washington D.C. Economic Partnership to attract businesses to the city. 

"Proactively engaging with site selectors, consultants and C-suite executives at a regional, national, and international level to attract high-growth sector private companies to DC, hosting site selectors for familiarization tours, attending industry conferences, and representing the City at large-scale global summits are just a few recent examples of activities and steps we are collectively taking to promote, encourage investment, and attract businesses to DC," the spokesperson wrote in an emailed statement. 

José Andrés Group President Sam Bakhshandehpour, whose firm has opened restaurants across the world, said he has seen that cities that draw large-scale conventions and events achieve economic success.  

“As the city can attract big group business, rising tides — everyone benefits,” he said. 

The slow return to office by the federal government has remained a pain point for many downtown businesses and real estate owners. The D.C. government has pushed President Joe Biden to mandate federal workers to come back to the office as a way to revive the downtown area, and JLL Vice Chairman Elizabeth Cooper said the city should keep the pressure on the federal government.

“We have 82,700 government workers that are not spending money in the city, unless of course they live here,” she said. “We're losing $42M in revenue, folks, annually.”

Davis said bringing federal workers back is not a silver bullet. She said it may be a good “interim” solution, but she emphasized the impact the private sector could have, especially the younger segment of private sector workers who she argued the District can draw upon to enliven the city. 

“It's not a panacea bringing the federal government back. It's just not. It might be good interim but it isn’t a long-term strategy,” Davis said.

“The long-term strategy, in my opinion, is around those 25- to 35-[year-olds] who make up our population. It’s a big group of people and I think we can capture them and their future."

Panelists also brought up local government policies that stall development or make it harder for new construction to pencil. 

Thakkar discussed EYA’s 25-acre redevelopment of the McMillan Sand Filtration Plant redevelopment in Northwest, now rebranded as the Reservoir District.

The project was stalled for years stemming from litigation brought by neighborhood residents. He said that while local politicians, the ANCs and most of the community was supportive of the project, there was a small group of residents who opposed it. 

"There's got to be a way to give folks due process, which is an important part of our democracy, while at the same time moving that forward expeditiously such that good projects ... can happen,” he said. 

Davis pointed to the District’s costly energy requirements as an obstacle, suggesting an alternative that D.C. provide its own funds along with the mandate. 

“What if it were funded? I don't think there's a person here who would object. Not one,” she said. “I would like to see alignment of resources with the goals.” 

But along with these changes from the city, Thakkar and Davis both said the industry can also push momentum forward. 

“I guess I'd like to put the onus maybe back on us,” said Thakkar, adding that the industry has a “unique opportunity” right now in which the local government may be more inclined than ever before to listen.

“I think Mayor Bowser, for example, does want to do that and does want to make progress and does want to turn this crisis into something that we can look back on five, six years from now and say 'wow, this really extended what the downtown is,' for example,” he said, urging private industry involvement with the public decision-makers.

Davis encouraged developers to think outside the box about how to reposition assets for what residents of the District are looking for in 2023. 

“You have resources here,” Davis said. “Your resources are your streets. How many of those are necessary? Could they be parks? Could they be pickleball courts?”

“This is your chance to shine,” she said. “This is a chance for the vision, and will it be painful? Yes, it will.” 

This story was independently reported and edited by Bisnow news staff. Like all Bisnow news stories, this sponsor was not involved in the production of this journalism.