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City bonds to finance new Newseum
(Published August 12, 2002)
By THOMAS A. NEELEY
The D.C. government has agreed to provide up to $300 million in revenue bonds to finance construction of the new Newseum in downtown Washington.
The deal, approved July 2 during D.C. City Councilís last pre-recess session, requires the nonprofit Freedom Forum, which operates the Newseum, to repay the bonds over a 35-year period. A Freedom Forum spokesman said the bulk of the bonds will be paid back from the groupís endowment and from revenue generated by the news museum.
The groupís endowment, estimated at about $1 billion in July 2000 when plans to move the Newseum from Arlington County, Va., were announced, was valued at $651 million at the end of 2001. A spokesman for the group said that estimate does not include the value of the Newseumís future D.C. site.
The Freedom Forum bought the property at Sixth Street and Pennsylvania Avenue NW from the D.C. government for $100 million, displacing the cityís Department of Employment Services. Of the $100 million, $75 million went directly to the purchase of the site and $25 million went into a fund to finance low-to-moderate-income housing.
When completed, the 550,000-square-foot building will include the Newseum, the Freedom Forumís headquarters and international conference center, restaurant and retail facilities, and approximately 100 housing units. The $250-million project, scheduled to be completed in 2006, is within walking distance of other museums on the National Mall.
The Newseum, an interactive museum designed to teach visitors of the processes in the news media, opened in 1997. Financial considerations were cited when the Freedom Forum decided last March to close the popular museum, which attracted more than two million visitors a year, pending completion of its new facility in the District.
Councilman Kevin P. Chavous, D-Ward 7, recused himself from the bond measure vote. Chavous said that he recuses himself from all votes on revenue bond measures because he is a partner in the law firm of Arent Fox Kinter Plotkin and Kahn, which is involved with approximately 80 percent of D.C. bond measures. The firm is not representing the Freedom Forum.
"I was advised by general council to do that," Chavous said.
During the same session, the city council also voted to cancel real estate taxes billed to the Freedom Forum for the property going back to Dec. 21, 2000. A spokesman in the Office of Revenue Bonds said the legislation merely clarifies vague parameters defined in the original purchase agreement.
The Freedom Forum initially announced that it intended to waive its tax-exempt status for real estate and retail sales taxes in the District.
"The intent of the agreement reached, when they agreed to come into the District, was that upon occupancy they would voluntarily subject themselves to District real property taxes," said a spokesman in the Office of Tax and Revenue. "The legislation merely corrects that."
The resolution allows the group to assert its nonprofit status for the property while the building is being constructed. No real estate taxes have been collected on the property, the spokesman said.
The D.C. Department of Employment Services building, which was located on the property, was razed in January.
Copyright 2002, The Common Denominator