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Neighbors try to slow GWU growth

(Published October 4, 1999)

By NADINE GRANOFF

Special to The Common Denominator

Condemning George Washington University's actions as "a farce of the ‘Campus Plan’ concept," the Foggy Bottom and West End Advisory Neighborhood Commission passed a resolution Sept. 29 asking the mayor to delay GW’s request for $440 million in industrial revenue bond financing until the university makes certain neighborhood concessions.

GW wants to use about $150 million of the revenue to refinance real estate already purchased and construction underway. City residents who share the West End neighborhood with the university say they have increasingly felt their quality of life threatened by GW’s recent aggressive real estate transactions that some feel are not in the best interests of area residents who have no direct connection to the university.

The ANC proposes that GW reduce the number of undergraduates over the next few years and provide on-campus housing for at least 80 percent of its full-time students. ANC chairman Barbara Spillinger said the resolution passed by a 5-1 vote, with only GW student Stephen Mandelbaum voting against it.

Putting the responsibility for how GW deals with city residents on Mayor Anthony A. Williams’ shoulders is in line with Ward 2 Councilman Jack Evans' strong advice. At a community meeting Sept. 27 Evans warned, "If the council conditions approval for the bonds, Congress will take the program away from us."

Congress explicitly prohibited such conditions on issuance of industrial revenue bonds (IRBs) in the fiscal 1999 D.C. appropriations bill. Congressional micro-management of the bonds is a unique feature of the idiosyncratic relationship between the District and its federal overseers.

"In Baltimore, if a neighborhood had zoning or other objections to such a project it would just delay the process," not defeat it, according to John Selfart, head of the public finance law group at Miles and Stockbridge in Baltimore.

But the ANC's compliance with Evans's idea doesn't mean everyone in the community is happy with their councilman. In fact, the GW bond proposal is fueling a small political realignment in Ward 2.

Agitated Foggy Bottom voters, including ANC representatives Dorothy Miller and Ellie Becker, have sought support from councilmen Phil Mendelson, D-At large, and David Catania, R-At large.

"Phil has been wonderful," Becker said. "He gives us advice on strategy and how to organize."

Possible Evans opponents in next year’s Ward 2 council election have joined the public backlash against the sitting councilman.

"Once again we see council member Evans supervising the destruction of a neighborhood to serve the special interests of his large campaign donors," commented Shaw community activist Beth Solomon, who has shown some interest in a possible Evans challenge for the Democratic nomination.

Industrial revenue bonds are a federal program in which states and cities act as a "conduit" for the bonds, meaning they issues them and help to shop them with private underwriters. The District is not liable in any way for the loan. If the university defaults, its insurer pays; if it doesn't get insurance, the debt becomes "an unsecured general obligation of the university," according to Charles Barber, GW’s senior counsel.

Much of the University's debt is at 10-12 percent interest rates; under the IRBs, it would be reduced to 2 percent interest. Last year, according to documents in GW’s bond application, the university spent $113,000 to service debt, but total revenues were close to $600 million.

According to Moody's Investment Services GW's bond rating is A1 (the highest being AAA), with a watch for a possible downgrade. Even with a dicey rating from Moody's Investment Services, the university could easily afford new land and buildings without the city’s help. Barber conceded that even without the bond funding GW will go ahead with planned construction and presumably find private financing options.

GW’s operating budget is built on healthy endowments and research grants. Unlike many other private universities, it's not living hand-to-mouth on tuition payments. In 1998, student tuition and fees accounted for only about a third of revenues.

Prominent deep-pocket contributors and board members include real estate moguls Lazlo Tauber, Oliver T. Carr, Abe Pollin and Robert Kogod. Robert E. Smith, president of major D.C. developer Charles E. Smith is an emeritus trustee.

The board also includes J. McDonald Williams, chairman of real estate giant Trammell Crow, which recently bought the last developable parcel in downtown Washington: 1615 I St NW. Trammell Crow is also renovating the new GW dorm, "Hall on Virginia Avenue," the former Howard Johnson's that it recently purchased.

Others with political clout are significant contributors to GW, including Norman "Chip" Glasgow of the über-zoning firm Wilkes, Artis, Hendrick and Lane as well as attorneys Jack Olender and Arrington Dixon.

Some speculate the university and its president may be victims of their success, or hubris. Characterized as arrogant and belligerent by many neighbors, the demeanor of President Stephen Trachtenberg was particularly targeted by area residents during interviews for this story.

"Trachtenberg says he’s in the real estate business and the education is on the side," exclaimed Dorothy Miller. "The university workers had a slogan when they were demonstrating: ‘Trachtenberg five, six, seven, eight, all you care about is real estate.’"

According to Miller, the university president has paid students to testify in favor of GW's positions at community meetings. Trachtenberg's penchant for alienating the neighbors is admitted even by residents who like living among the students, such as ANC representatives Richard Sheehy and Roland Lekher, a volunteer at Miriam's Kitchen.

Trachtenberg could not be reached for comment.

Many neighbors feel besieged by a university they see as bloated and indifferent to them. As longtime area resident Olga Corey said, "When I first moved here, I was ready to give them the benefit of the doubt, but I just don't like the way they do things."

The university's unabated acquisition of apartment buildings in the area means many residents have fewer housing options. "Rental buildings have disappeared around here," said Corey, who lives in the one of the last rent-controlled buildings in Foggy Bottom. The university's bond application shows it spent $6 million to buy four apartment buildings in the campus area over the past few years.

Ironically, what infuriates the neighbors delights the students: GW's students praise their upscale dorms. "We have our own bathrooms and kitchens. They're the best dorms anywhere," said one sophomore. "But we don't have a real campus like other schools."

To promote cooperation with the neighborhood, or at least the façade of cooperation, the university has a department of community relations. Jane Lingo, who heads the department, says, "people in the neighborhood call me when a truck is noisy and they think it's ours, or if they want tickets for something at Lisner. We also have an arrangement through the campus police. The neighbors sometimes request service."

But Lingo did not acknowledge the long-brewing hostility between the university and its neighbors. Even a GW freshman noticed that "when the people who live around here see us walking down the street, they almost spit at us. You can see the hate in their eyes."

GW also arranges periodic meetings with the community but they have been less than sensationally popular.

"I stopped going after the first few," said ANC commissioner Ellie Becker, "because they were a waste of time."

The frayed "town-gown" relationship apparently has seen little change for almost a century. According to Laura Bergheim, author of The Washington Historical Atlas, there wasn't much there when the university moved to the area in 1909 -- that's why they moved there.

"The depressed neighborhood of Foggy Bottom, with its empty houses and central location, seemed ideal for the school's planned urban sprawl," Bergheim said.

Copyright 1999, The Common Denominator