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HOUSE OF REPRESENTATIVES TESTIMONY OF APRIL 26, 2001 Good morning, Chairman Knollenberg and Members of the House Committee on Appropriations Subcommittee on the District of Columbia. My name is John Roderick Heller and I am the Vice Chairman of the Board of Directors of the National Capital Revitalization Corporation (NCRC). Lloyd Smith, Chairman of the Board, had a longstanding European trip planned for this time and sends his regrets that he could not be here today.We greatly appreciate the strong interest in the District that you have exhibited since assuming the Chairmanship of this Committee and commend you both for holding this hearing today on economic development in the District and for your leadership in promoting this Federal/City partnership. We also extend thanks to your colleagues, in particular the Honorable Eleanor Holmes Norton who has been such a tireless advocate for the District, and such an effective legislator on our behalf. I am pleased to appear before you this morning on behalf of the NCRC Board of Directors and the Corporation. As you know, NCRC was established to help revitalize the District and in particular its neighborhoods. The Board is comprised of nine members including four appointed by the President and three by the Mayor. They include: Marie Drissel, World Link Organization; Greg Farmer, Vice President for Government Relations and International Trade, Nortel Networks; Karen Hardwick, Partner, Hogan & Hartson; Madeline McCullough, Washington DC Office Director of The Enterprise Foundation; Larry Parks, Senior Vice President for External and Legislative Affairs of the Federal Home Loan Bank of San Francisco; Lloyd Smith, Chairman, City First Bank of DC; and myself. The Mayor and the District's Chief Financial Officer serve on the Board Ex-Officio. My colleagues on the Board and I have a common vision for NCRC. We will focus our efforts on the city's neighborhoods. We will work closely with local Advisory Neighborhood Commissions (ANCs) and civic associations in order to spur economic growth in the neighborhoods. Our goal is not to engage in studies or comprehensive planning, but rather to act quickly and efficiently. We will leverage our activities both with the private sector and other governmental actors. We will be entrepreneurial rather than bureaucratic. My Board colleagues and I were installed last July. Since that time, we have worked hard to set up the infrastructure that is necessary for success. Last fall, the Board appointed Elinor Bacon as the Corporation's President and Chief Executive Officer, and she assumed her responsibilities in January, 2001. Ms. Bacon shares our vision and our commitment, and we are confident in her abilities to bring this mission to fruition. With that, I would like to turn our presentation over to Ms. Bacon who will present the balance of our testimony. Good morning, Chairman Knollenberg and members of the House Appropriations Subcommittee on the District of Columbia. My name is Elinor Bacon, and I am the President and Chief Executive Officer of the National Capital Revitalization Corporation. I would like to thank you for the opportunity to present testimony to you this morning. This is the first opportunity the Corporation has had to appear before the Congress since the establishment of NCRC, and we thank you for this honor and opportunity to discuss economic development in the District, and NCRC's role in this effort. In my testimony today, I would like to summarize our mission; what we have accomplished to date; what we hope to accomplish during the remainder of this year; and how our work strengthens and complements the work of my esteemed colleagues here today to testify before your Committee. NCRC was established by an act of the Council of the District of Columbia in 1998. It is an independent corporate instrumentality of the District of Columbia government. We are charged with a specific mission: spurring economic development throughout the District, primarily in neighborhoods of need. Our vision is to infuse economic activity into the District and create jobs for District residents, through real estate development, business finance and business development. We will focus our resources on the District's neighborhoods, and in particular those areas that have been under served, such as the areas east of the Anacostia River and along the Georgia Avenue corridor. Our mission is to implement economic development revitalization. We were not chartered to, and do not expect to act as a planning agency. We work in close cooperation with the Mayor, the City Council and the two planning agencies, the National Capital Planning Commission and the District's Office of Planning. We also work closely with other city departments and local organizations, including those represented here today, to ensure that our collective efforts to promote job training, economic development and real estate development throughout the District are well-coordinated. For example, we are working closely with the Mayor's Office of Economic Development; Eric Price, Deputy Mayor for Planning and Economic Development, represents the Mayor ex-officio on our Board. We are working with the Chamber of Commerce and the Washington DC Marketing Center to attract new businesses into the District, and with the Board of Trade's Business Learning Information Networking Collaboration (LINC) to support and promote local, small and disadvantaged businesses. Since economic development and housing must go hand-in-hand, we also work closely with the city's key housing agencies including the Department of Housing and Community Development, the Housing Finance Agency and the Housing Authority. We are also working on job development with the District's Department of Employment Services. Our operations are funded by a $25 million Appropriation from Congress. Currently, this is our only source of funding for operations. We consider the grant a seed investment. It is our intention to use these funds carefully. We will seek to invest in projects that will protect principal and generate sufficient returns to pay for our operations. We also have received a commitment of $75 million from Fannie Mae (FNMA) to be used for debt and equity in projects with a housing component. We are thrilled by the Federal commitment, which demonstrates the strength of this unique Federal/City partnership to improve the economic health of our nation's capital, and by the FNMA commitment -- the only one of this size and scope in the nation. We want to thank you, Chairman Knollenberg, for your personal commitment to the District and the tremendous leadership you have demonstrated since assuming the Chairmanship of this Committee. We also want recognize the work of Congressman Chaka Fattah, ranking Minority member, whose leadership in housing and economic development has been instrumental in this city. We also want to acknowledge Congresswoman Connie Morella who recently became Chair of the Committee for Government Reform's Subcommittee on the District of Columbia but who has been a long-time neighbor and supporter of the District. And finally, we want to extend our thanks to Delegate Eleanor Holmes Norton who has been a critical advocate for the City in promoting public/private and City/Federal partnerships to spur important redevelopment initiatives in the District. NCRC greatly values both the support and input of its Federal partners in carrying out our mission of "building our capital city." NCRC has a strong entrepreneurial spirit, and we are charged with becoming self-sustaining. To meet this ambitious goal, NCRC has been given the power of eminent domain, with Council approval, and the authority to raise funds through several channels. We have the authority to raise capital through the sale of bonds and other endeavors. We can receive contributions of funds and other assets. The Corporation also intends to earn fees from financing, development management and service programs. For all intents and purposes, fiscal year 2001 is our first year of operation. Our Board of Directors was installed in July of 2000, as mentioned by NCRC Vice Chair Heller. Since that time, NCRC and its Board have had three major tasks: (1) completing the Revitalization Plan which sets forth a framework for operations; (2) completing the Performance Plan which specifies our objectives for this year; and (3) making the organization operable. District Council legislation required that we develop a Revitalization Plan within 180 days of the Board's first meeting. The Board is firmly committed to full public participation in all aspects of our operations and thus sought extensive community input during the development of the Revitalization Plan. Three public hearings were held on the proposed plan and approximately forty-five witnesses testified. We welcomed input from Advisory Neighborhood Commissions, civic and community organizations, and all members of the community. The comments received were invaluable and helped myself and our Board to better understand the needs and goals of the community. To the extent possible, comments were incorporated into our final Revitalization Plan, and will be used to identify strategic projects where investments and assistance will be targeted. The Plan was approved by the Board on January 18, 2001 and forwarded to the Council. Council has since approved our Revitalization Plan. We submit a copy for the record. We also were charged with preparing a Performance Plan, to- enumerate our specific goals for the year. Our Performance Plan was approved at the Board's April 19, 2001 meeting and we submit a copy to the Chairman for the record. We have been working hard to develop the infrastructure necessary to implement the Revitalization Plan and our mission. In the fall I was appointed as the CEO to direct and supervise the general management and administrative affairs of the Corporation and assumed these responsibilities in January 2001. We are in the process of hiring a highly skilled staff with private sector experience and sophisticated expertise in real estate development, finance and law, and business development, and expect to be fully staffed by early summer. Late last year, we moved into our leased office space, and we have purchased the telephones, computers and office equipment necessary to support our operations. We also have a web site up and running. At our April Board Meeting we also adopted policies and procedures that will govern our procurement and personnel activities, and ethics and conflict rules which will insure that NCRC and its employees maintain the highest ethical standards. Our guiding principle in these endeavors has been to adopt the best practices used by other governmental entities such as ours. Equally important is the need to maintain an entrepreneurial spirit that will enable us to work quickly and effectively in our revitalization efforts. The Corporation intends to move aggressively forward to accomplish many more goals this year. Under the Revitalization Act, we are to assume the functions of the Redevelopment Land Agency's Board of Directors by July 2001. We have launched an intense effort in close cooperation with the RLA, The Department of Housing and Community Development and the Mayor's Office, for an effective transfer of the roles and responsibilities of the RLA and its assets to NCRC by summer 2001. Similarly, the Act provides that NCRC will succeed to the duties, powers and responsibilities of the Economic Development Finance Corporation (EDFC). As with the RLA functions, we intend to complete this transfer by the summer of 2001. Our plan for the remainder of the year is as follows: First, complete feasibility studies and, if feasible, commence the pre-development process on at least two projects that have a high probability of being able to be brought to fruition and/or to demonstrate significant progress within the first year. Second, commence feasibility analyses of at least five mid-range developments that we anticipate will take approximately two to five years to complete. Such projects include but are not limited to redevelopment of the Skyland Shopping Center and other development opportunities East of the River; economic development of areas surrounding relocated municipal facilities and metro stops; redevelopment of the Howard Theater/Shaw Cultural Area; and development in connection with Howard University's redevelopment efforts. Third, commence feasibility analyses of at least five large-scale, extremely complex efforts that we believe will take five to ten years to complete. These typically are efforts that will require close Federal/city cooperation and include but are not limited to redevelopment of the Southwest Waterfront, the St. Elizabeth's Hospital site, the South Capitol Gateway, NOMA (North of Massachusetts Avenue), Buzzard Point, McMillan Reservoir, etc. With the transfer of the RLA and EDFC Board responsibilities and assets, we will begin management of the RLA portfolio, including those properties with Exclusive Right Agreements, developments that are in various stages of pre-development, properties for disposition where Requests for Proposals must be issued, etc. We are hiring staff with the range of sophisticated real estate development skills capable of taking on complex projects and implementing them in an expeditious manner. Thus, in addition to focusing on neighborhood redevelopment, we will be ready to take on major development management projects for the District, as appropriate, such as the redevelopment of the former Convention Center site. Finally, we will develop a business development/business finance program to support existing businesses and attract new ones with the goal of increasing the tax rolls and providing jobs and business opportunities to existing and new residents. In this regard we will work closely with the entities represented here today, and others, including the Chamber of Commerce, the Board of Trade, the Office of the Deputy Mayor for Planning and Economic Development, the Washington DC Marketing Center, the Department of Employment Services, etc. We are charged with being self sufficient, so our final task for this year is to develop a strategic business plan that will allow us not only to be self-sufficient, but also to earn monies through our activities. We have an ambitious agenda and we are eager to carry it out in close cooperation with you and your committee. Thank you again for the opportunity to testify today. Mr. Heller and I will be glad to answer your questions. |
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