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Charlene Drew Jarvis, Chair, DC City Council Committee on Economic Development
Testimony to the House of Representatives Committee on Government Reform and Oversight Subcommittee on the District of Columbia
July 15, 1998




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Good morning Chairman Davis, Congresswoman Norton, and other members of the House subcommittee. I am Councilmember Charlene Drew Jarvis, chair of the D.C. Council Committee on Economic Development. In September, 1994, D.C. Law 10-188 was enacted and established the Washington Convention Center Authority as an independent public instrumentality of the District of Columbia government.

The Authority was established for the purpose of acquiring land on which to construct, equip, maintain, and operate an appropriate new convention center to promote trade shows, conventions, and other events and to maintain and operate the existing convention center until such time as the new facility is completed and opened for operation.

As such, I am pleased to report that after much collaboration and a lot of hard work by the Authority, the Council and participation by various associations and concerned citizens, the reality of a new convention center will soon be realized. Project groundbreaking is anticipated for early Fall and will mark the start of the largest economic development project ever undertaken by the District. This project, which will be paid for by hospitality industry customers, is necessary to sustain revitalization of the District. Local businesses will expand, areas will develop commercially, and quality of life in our neighborhoods will be enhanced.

The District’s economy is dependent upon government and services, which includes the hospitality and tourism industries. The consulting firm of Coopers and Lybrand has estimated that these two components of the District’s economy account for approximately 82 percent of total employment and are expected to dominate Washington's economy in the future.

The current convention center opened in 1983 as the nation's fourth largest facility with 380,000 square feet of exhibit space. Today, however, the current center ranks 30th in size and can compete for only 54 percent of large national trade shows and meetings. This lack of ability to compete results in millions of dollars of foregone revenue for the District each year.

We need a new convention center — the government has conducted a great deal of research and analysis on the feasibility of a new center — and the Council has approved legislation authorizing the financing plan for a new state of the art convention center that not only will be able to compete well into the next century, but also will include a plan for future expansion should that become necessary.

The “Washington Convention Center Financing Amendment Act of 1998”, was introduced into the Council in September, 1997 and referred to the Committee on Economic Development. Two public hearings on the bill were held jointly with the Committee on Finance and Revenue; and additional Council hearings were held at which the public was allowed to comment on the new convention center project. The bill passed on two readings by the Council, was signed by the Mayor, approved by the Financial Authority and is currently before the Congress for its review.

The Act amends the Washington Convention Center Authority Act of 1994 — the law that I previously mentioned which created the Authority and established its mission.

The Act also:

  • repeals the Hotel Occupancy Tax and eliminates the transfer of certain business surtaxes to the Washington Convention Center Authority Fund;
  • increases the Hotel Sales and Compensating Use Tax rate from 13% to 14.5% and the percentage of the tax to be collected on behalf of the Authority from 2.5% to 4.45%;
  • subject to Council approval by resolution, authorizes the Authority to enter into various interest rate protection agreements, which will allow for cost savings;
  • requires the Authority to enter into marketing services contracts for the purpose of promoting conventions and tourism in the District of Columbia;
  • clarifies that taxes dedicated to the Authority shall not be a part of the District’s General Fund;
  • increases the permitted maturity of revenue bonds issued by the Authority from 30 to 34 years;
  • allows the Authority to use revenues for redemption or purchase of outstanding indebtedness of the Authority prior to delivering excess revenues to the District and, subject to Council approval by resolution, permit the Authority to create additional reserves, if required; and
  • amends the provisions specifying the procedures employed by the District of Columbia Auditor in certifying as to the sufficiency of certain taxes to meet debt service expenses and reserves of the Authority.

It is indeed with pleasure that I present today this legislation for the subcommittee’s consideration, and would be pleased to answer any questions members may have.

Thank you.

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