Hypothetical Quandary of the Day – Mega Millions Tax Shelter


Like most of you, I awoke on Wednesday to a sad revelation: I did not win the Mega Millions jackpot. Being the Lord of Petworth does not pay as well as you might imagine. Even I could use a few hundred million.

But let’s just imagine, for a few moments, that you had won.

What would your first thought be? Taking care of relatives? Feeding the huddled masses? Hell no. You’d be thinking about tax shelters.

Let’s say you were at a meeting with your financial team (being filthy rich, you’d now have a financial team) and they’d come up with a brilliant tax shelter that would let you make a substantial investment in a Washington, DC, neighborhood, as well as protect a good portion of your undeserved new wealth.

The shelter would require you to invest $15-20 million in a neighborhood development project. You would select currently vacant buildings, renovate them, and start businesses in them.

There are some rules:

(1) You must create something where there is currently nothing. You cannot displace a current business or residence. It must be an empty space and new business (or businesses).
(2) It must be a commercially viable for-profit business. No renovating buildings for a youth center, homeless shelter, or senior center.
(3) The business must realistically be self-sufficient and begin turning a profit within five years.
(4) You must make the case that the use of this space will improve the quality of life for the current residents in the neighborhood you invest in (no opening yoga studios hoping that gentrifiers will eventually move to the block).

So, okay moneybags. Your check-writing hand is getting itchy and your financial team needs your decision right now.

Where do the millions go and what do you put there?

39 Comment

  • I’d start my own bank, one that doesn’t charge ATM fees. Then I would open a dry cleaner. I would also open a breakfast/lunch/brunch restaurant that sells Dutch Pannekoeken and has a small gourmet shop attached.

    captcha: YFUK

  • I got dibs on the Wonder Bread Factory at 7th and S street! Totally going to turn that into a shopping development that has an interior courtyard which will have the following stores: NY style deli with appropriate size sandwhiches, a BBQ place with decent priced beers (no wait service, like a Pete’s pizza), bike shop, bakery (like Hellers), & Sushi. There will be a large fireplace in the courtyard for the winter and space for outdoor seating for all of the eaterys for the summer. This would be a perfect complement for the new theatre for pre shows!

  • I would purchase one of more of the properties across from the convention center new 7th & NY NW. The one right at NE corner of that intersection would be my first target. I’d aim to open a few really creative, fun and moderately priced restaurant concepts that would be worthy of being featured on Diners, Drive-ins and Dives. The kinds of places that make their ingredients fresh everyday. It seems currently in DC the lion’s share of places either places are small plates and expensive or you get a sense that they just thaw’d out frozen food from a distributor (think: Logan Tavern, Bar Louie).

    Anyway, I’m not sure restaurants are as directly community uplifting as you were going for… but I think this would really energize this block and make it more relevant again.

  • I would buy the houses with ugly pop ups n fix them right. Also buy the ugly townhouses and tear them down.

  • I would open a blues club and hire all of my musician friends (plus national acts) to play there.

  • I would buy the church at 10th and V and restore it and turn it into a music venue, but the lot next to it and make it into an outdoor garden restaurant and buy the garage next to that and turn that into the indoor restaurant/kitchen part of the who complex.

  • ah

    These aren’t tax shelters, they’re charitable works.

    If I won that cash, I’d go establish residency in Wyoming (no income tax! Hello Dick Cheney! Hello various other rich people!). And make sure I spend less than 180 days/year in DC.

    I might then take some of the savings in taxes and use them for charitable works in DC.

    Oh, and I’d buy a Lordship. I think Petworth sells them for cheap.

  • I would finally make the movie I’ve always seen in my head — a horror picture called ‘Duffelbag’ starring Randy the Macho Man Savage playing the role of Bag Man.

    • my favorite part is when he fights hulk hogan and his wrestling boot band
      “its time to pay the bag tax”

  • Mercenary force.

    1. Buy the Bacon Funeral Home shell/eyesore for administrative offices.
    2. Hire the best muscle money can buy.
    3. Year one is about establishing a presence through acts of vigilante justice.
    4. Year two is about building capacity to hire out personal/ property guards, at affordable prices. Income will be used to hire lower-skilled, physically weaker types to pick up trash, thus increasing community support for next steps.
    5. Year three will be the year that the lobbying efforts undertaken in previous years pay off, and the MPD is authorized/ forced by popular demand to outsource a good chunk of policing effort to me and my superior force.
    6. Rake in $$$. Enjoy cleaner, safer city.

    • To supplement that – buy a several hundred – a thousand iPhones and have explosives installed in them. Hire people to use them on the Metro/streets and have them snatched. Have the phones blow up as soon as the thief is away from innocent bystanders (might need some sophisticated surveillance for this part.)

  • That, or a daycare center.

    The mansion on 18th street would make a neat daycare center. Lots of room to play outside. Variety of spaces for a variety of uses inside.

  • I would build a market for fresh produce, meat, dairy, etc (similar to Eastern Market) somewhere along upper GA Ave (maybe next to the new proposed Wal-Mart? heehee) And simultaneously lobby for them to build the proposed GA Ave streetcar.

    • Bear

      I like to same idea, but in the Bus Barn on 14th Street (between Buchanan and Decatur). I believe Metro is already finding somewhere else to house the buses, but as far as I know there aren’t any concrete plans for the building, which the DC government has deemed “potentially historic.”

      • Unfortunately, Metro isn’t moving. They’ve decided to stay, and started construction this week to fix the parking deck that was condemned last year. They sent out a press release stating that the construction would be ongoing for the next 15 months.

  • Phase one: Collect underpants

    Phase two:

    Phase three: Profit!

  • ha–I’d come up with my idea before looking at the comments and see that it’s a combo of J St’s and WDC’s 2nd one.

    I’d turn the Wonder Bread factory into condos and put a day care center/charter school on the ground floor. Another possible (but smaller) location for this would be the former Walker-Thomas hardware store near the convention center. I’d keep the sign, too (mostly since I learned about the store in contracts class–that place has historic value to law geeks!)

  • on a personal note, clearly that former coffee shop at sherman and harvard needs to be a coffee shop again. i think like 2 coffee shops have already failed there, but i think it is plausible that something could succeed with lower prices, good marketing, and a financial cushion that would allow it to build a customer base.

    also, some of those empty storefronts on georgia avenue around there should be: a 24/7 bodega, a small bar with a good jukebox and a small upstairs music venue (think dc9 with a good jukebox and less manslaughter), a yoga studio (the gentrifiers are already there, hon; we just don’t have a yoga studio), and at least one more cheap, clean restaurant with a takeout option. i suspect it is illegal to give a discount just to local residents; so they should all give discounts to people who support local organizations like BloomBars and MentoringWorks and any other worthy neighborhood organizations that may be willing to cooperate by creating “membership” cards or the like.

  • I’d develop all of the empty fronts on Upshur from Georgia to Rock Creek Church Road and provide incentives for local independent business that buy local and support the community.

    Specifically I’d open a neighborhood family sit-down pizzeria and a bar with lots of space, just a few TVs, and something to offer everyone.

  • Yeah, I know this is all fictional fun, but I don’t see the point.

    If I claimed DC residency on my fictional 200 million winnings, DC would claim 17 million of that in income tax.

    I’d take up residency in a state that doesn’t collect income tax, FL, TX, NV etc and set up a blind trust to claim the money annonomously (I think people who go on tv and claim winnings like that publicly are dumb as a bag o’ hammers. They’ve just guaranteed to get contacted 500 times a day for the rest of their lives by every person and non-profit in America with their sob story).

    Then I’d take that 17 mil I would have otherwise had to give to DC and start buying tracts of houses, 130-140 houses in SE, Anacostia and Congress Heights. I’d assembed block after block after block of houses and then do DC a favor by bulldozing them and making a nice park and decreasing DC’s violent crime rate by 40% in the process.

    I’d then squat on the land for 10-15 years until the time was right then build a bunch of overpriced rowhouses, condos and apts that the yuppies love.


  • european soccer stadium just north of h street. built into the neighborhood..small 25K max seating for DC united. Buy blocks around it to redevelop. Have street car rails put in to said soccer stadium. put one sweet ass small boutique hotel (10 rooms-2 suites)in stadium with field views. granville moore/sticky/pug/taylors/argo as the vendors in said stadium.

  • For-profit prisons at any number of shuttered school sites.

  • An outdoor velodrome at the McMillan Sand Filtration Site. It would be the centerpiece of the larger development, and circle three of the existing towers on the site in an elongated oval. The track would charge usage fees and be available to be rented out. I would use the existing underground tunnel infrastructure to create ingress and egress points to the center of the track, and retrofit some of the towers to provide different services with observation platforms on the top. In the summer, additional track could be added to the inside of the oval to create a shortened banked circle or oval for things like rollerderby.

    It’s the kind of event space that could take a few years to develop a following, but with the popularity of cycling, and the wealth of area suburbs (and parents willing to spend lots of cash on kids sports equipment), the concept could work and be profitable in 5 years.

  • What a cool discussion – some very cool ideas.

    Love the daycare idea – it’s much needed in the residential areas of CoHe / Mt P / Pet.

    Love the Wonderbread Factory idea.

    love the church / music hall idea.

    I just read Beer School – it’s a history of Brooklyn Brewery. It was a great book and an easy read – very neat perspective on marketting with no budget and how to make a difference in an up and coming neighborhood. I think I’d want to do something similiar. I’d do it around the ballpark / SW waterfront area. Brewery first, brew pub later, has to be a cool historical building.

  • I would park it all into abandoned/unrenovated buildings in DC and get tax breaks from my friends on the City Council!

  • I’d put in a roller rink/bar/event space in the currently vacant buildings along Columbia Road between Ontario and 17th street. The name? Skaters Gonna Skate.

  • 1) I’d put a pitbull spa in that big house you showed us from Anacostia. 2) I’d go to NE and create a chain of dentist franchises — like near danceplace. 3) I’d go to Cleveland Park and put in a Tryst in the old Cereal Bowl. 4) I would go to 14th Street and put in a Rodman’s Grocery/5-and-Dime… anywhere/where there used to be the brake shop? 5) I’d go to NY Avenue and put in a S.C.R.A.P. (recycling old corporate supplies for profit) in one of those giant old warehouses. 5) I’d buy many spaces in the Watergate and turn them into terrace cafes. 6) I’d build a gondola over RCP. 7) I’d want to build a funicular, but I don’t know where yet.

  • Well after making a family trust, I got a LOT of family members who would come out of the woodwork, might as well address that early, I’d create a foundation for individual and neighborhood improvement.
    My foundation would have three areas

    1- Education: scholarships to primary schools and scholarships to public post secondary schools for B grade students living in Wards 5, 7 & 8. A/ 4.0+ students can screw themselves. I was not a 4.0 student, why would I make a scholarship I couldn’t get.

    2- Bad buildings- Buy the ugly houses, the shells and make them useful & pretty. Then sell them after 5 years of use to renters at a small discount after helping them qualify to buy it, if that’s what they want.

    3- Small business help- Help DC residents become self employed or semi-self employed by helping them get through the red tape/regulation, finding locations and office support. The goal would be to get more neighborhood restuarants, freelancers, and suport artisians and crafts people.

Comments are closed.