Whole Foods Possibly Coming to Navy Yard with Tax Breaks

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This is timely since the topic of tax breaks came up in the Park Road Facade Improvement project post below. This is the big news this morning from the Washington Post:

“Whole Foods Market and a D.C. real estate firm are interested in building a new store in Southeast Washington near Nationals Park, but the developer says that luring the grocer would require $8 million in tax breaks. William C. Smith and Co. is proposing a 39,000-square-foot Whole Foods for 800 New Jersey Ave. SE as part of a building that would include 375 apartments.”

Though another section from the article which I also found interesting said:

“In a recent study of economic development assistance provided by the city, the D.C. Office of the Chief Financial Officer found that Ward 6 had received by far the most aid in fiscal 2010: $129 million, followed by Ward 2’s $59 million.”

28 Comment

  • The part about which Wards get the most commercial tax abatements is from a study commissioned by Kwame Brown that he (and others) have been using to try to claim that other Wards (like his native 7) are not getting their fair share.

    It’s a ridiculous argument, because while the Wards are drawn to have approximately equal numbers of residents, there are huge disparities in the number of commercial buildings. The Wards that contain the downtown areas (like 2 & 6) naturally get a lot of tax abatements for large developments, because that’s where the large developments are.

    Most of those buildings are not there *because* of the abatements, but this is a highly effective way in which the District can encourage buildings to sacrifice some square footage to put in higher ceiling heights for a grocery store, or provide other items which help improve the vitality of the city (and encourage more residents and more future taxes). In this case, we’re talking about $800K a year in a property tax abatement (for 10 years). The District is not actually giving them an $8M grant at the start of the project. Plus the property taxes for the property are going to be going up by a LOT more than that $800K per year… Tommy Wells said it would be >$10M extra a year.

  • I agree with NE DC. People like ED Lazaere (sp?) from the DC Fiscal Policy Institute continue to decry tax abatements, but these are abatements, not grants. The DC gov is not handing over money from the coffer, and the only actual revenue lost is the tax on the current empty plot. Anything above and beyond that wouldn’t happen in a timely manner without an abatement (and $8MM is not much in the grand scheme over many years), and represents significant money for the city that would not be there without the new development.

    Mosty of this city’s tax base comes not from income tax, but from commercial and large-scale residential property taxes. Some of the largest buildings in the city generate $10M per YEAR in property taxes. A building with 450 apartments and a Whole Foods would generate enough tax revenue to pay hundreds of new teachers across the city, or after a few years renovate a school.

    • +1

      And, the sales taxes from the Whole Foods will generate millions for DC’s coffers.

      • Actually, since there’s no sales tax on grocery items, the only sales tax produced by the store will be for non-food items like cosmetics, toilet paper, etc.

        But definitely the property taxes will be huge for this property, and hundreds of new residents will be paying DC income taxes.

        Overall, a big win for the District, and especially for the ballpark neighborhood.

        • There are sales taxes on wine and beer, which whole foods sells in DC.

          • Yep, those too. I definitely agree that there will be a huge amount of $$$ flowing out this project, and certainly a net positive even after an $8M abatement.

          • I think they could rake in a lot of bag tax too, especially from all the DoT and Navy Yard employees that stop in to pick something up. I work in this area and every single person I work with, or have previously worked with, lives in VA or MD and probably wouldn’t think to bring their own bag.

  • Not to mention that a whole foods would be a HUGE get for that neighborhood and would reinvigorate its development, which has stalled during the downturn. Only an idiot would be against this.

  • I’m interested in a discussion of the fiscal merits of this ($8 mil abatement for Whole Foods) vs. Wal-mart buildng by-right with no tax incentives.

    • I’ll bet the “fiscal merit” is that WalMart thinks a potential $8 million abatement isn’t enough money to account for the fact that this would spark Council hearings, etc. and give the District leverage to negotiate with WalMart. By forgoing this process, they can build without dealing with that.

      • Exactly. Given the controversy that accompanies pretty much every new Walmart, the last thing they would want to do is give the anti-Walmart people the opportunity to argue that not only is Walmart bringing [fill in the blank] problems to our communuity, we are paying them to do it.
        Other than potential parking issues, which don’t seem apparent in this ‘hood, there’s not alot of criticism of a new Whole Foods store.

        • Street parking is pretty limited in this area, but parking enforcement is strong (at least on weekdays and during Nationals events) so I don’t think it would cause problems. Whole Foods would be smart to put in some dedicated parking, however.

  • ANY tax abatement to a large corporation is a perversion and morally wrong. You can rationalize it any way you want, but a tax break to a grocery store for the rich is bullshit. Every single dollar they give that place could be used to help someone who actually needs it. You people should be ashamed of yourselves.

    • Correct. I’m with Anonymous at 12:30.

    • This money is an investment in the neighborhood that will pay future dividends. The handouts to “help someone who actually needs it” you advocate for instead would be just dumping money in a black hole.

    • Jobs, jobs, jobs, that’s what I see here. The single best thing we can do for the poor, is get them good paying jobs. This does exactly that.

      And, they aren’t giving these guys a dine. No city money will be handed to anyone, this is a tax abatement. Look, I’m not a fan of nameless, soulless corps, but on theother hand we need to build an entry level job base in this city.

    • You have no idea how the world works, do you? A new Walmart will probably pay out 1 million per year in wages. Combine that with the tax revenue, and you’ve got an investment that’ll benefit the District to the tune of tens of millions before a toddler today enrolls in high school. It’s a cash cow that’ll give many times more to people in need than your very stupid idea of blowing it now would.

      • Anonymous isn’t against Whole Foods but the tax break of 8 million for Whole Foods.

        If Whole Foods came I would shop there, but I don’t want to offer them a tax break of 8 million.

        I would rather offer a hundred breaks to 100 small businesses.

        Maybe a tax break of 1 million that you cite for the first year of wages — to Whole Foods, but that is it. They can find their own way to profit and earn tax breaks otherwise; they are a corporate business. I expect them to.

        • Pay attention, mischievous one. There will be a test later.

          When your favorite store has a big sale, you shop there. When there’s no sale, you probably don’t buy anything unless there’s something you’re dying to have. Whole Foods is not dying to have a store in SE. We have to put the cost of DC taxes “on sale” to entice them to situate here, as opposed to MD, VA, or one of the other 48 states. Think about it this way: if Anne Taylor Loft is having a 60% off sale and Macy’s isn’t, where do you shop?

          Would you rather DC’s gov’t and residents receive $2 million in benefits every year, or a big fat $0 million? No Whole Foods, no benefits. Do you know how much it costs DC to offer this abatement? Zero dollars — in fact, we make money. Imagine — DC is making a couple mill off Whole Foods every year; hypothetically, they could use that money to fund tax incentives for small mom and pop businesses. They could afford to give out $1 million per year to tiny bodegas run by elderly yet vibrant couples who remember your name and tell you stories about the neighborhood from when they were kids.

          See how I made that work for you?

          • Dearest Tres,

            This is inconsistent with everything else you’ve already tried to teach us.

            Remember when you said you can’t have it both ways as a homeowner? Where did that logic go for corporations?

            Remember that?!!

            Why do you work so hard to convince us that it is for homeowners and renters to deal with the rising housing costs, increase in property values and yet to shell out a humongous break to a big corporation that sells high-end foodstuffs?

            “Pay attention, you’ll have a test too.” A corporation such as Whole Foods should beg to get a space in this city right now. Look at the national economy. Which cities are growing? Who has the most jobs to offer? Where is there steady income? Where should a corporation add a new site? Where are people moving to? Here. Here. Here.

          • It’s called “Loft”. Get it straight. And I don’t shop at Macy’s.


          • bloom,

            Maybe I shouldn’t be so righteous about this. Honestly, I’m just trying to help you out. I assume you and I both shop sales, but I’m guessing as a woman, you frequent stores with women’s clothes. “Loft”. Now I’m in the know.

            NoVa has counties with more wealth than DC. Crime is less of an issue. Schools are better, so families settle there more often. Housing market is more robust there than here by a large margin. With that in mind, it makes a lot of sense for Whole Foods to find another spot somewhere in NoVa rather than here. Heck, they could run their numbers and find out that PG offers them more than DC.

            I agree with you in that I think it’d be smart for them to open up in SE, but it’s not without risk for them. They could lose money the first 5 years — they could lose millions each year. What if they decide they want to wait a couple years before moving into SE, until he neighborhood develops more, if ever? An abatement makes it happen now. It makes revitalization and development happen today, as opposed to 2017.

            If it was obvious to Whole Foods that “they should beg to get a space” in SE now, it would also be obvious to a half dozen other chains, and we’d be holding a bidding war. The fact that only one of many grocery stores has come to the table (and tentatively at that) tells us their collective assessment is somewhat bleak. I tend to think their opinion is worth a lot, since what they do is open stores that make money. Your or my appraisal isn’t as strong, based on our personal track records of opening stores.

  • Tell them they can have the tax abatement but only if they also open a store in DCUSA!

  • the only thing about this that pisses me off is why can’t the Grahamstander we elected push hard to get us this on Georgia Avenue around Petworth or why not at DCUSA. I am sure he is working hard though on another gorcery store he claims is in the works for DC USA. yeah right.

  • I was wondering if whole foods would ever recognize that there are 3 other quadrants to this city besides NW. As a NE resident who currently drives over to the P St. location to shop this is great news if it actually pans out. If and when they open, i think whole foods will be pleasantly surprised to find that most of the preconceived notions about income levels and spending habits in SE/NE grossly underestimate the changing demographics over here and the demand for higher end retail options.

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