The audit also concluded the developer did not meet a mandate to grant all its apprenticeships to District residents.
The Bowser administration approved the abatement “after a confidential mediation with the Office of the Attorney General, review of additional documentation submitted to the OAG and updated legal guidance,” a spokeswoman for the Department of Employment Services said in a statement Friday.
The granting of the tax subsidy was first announced by the Line, which has long contended that it met all requirements. Jake Lamstein, the managing partner of the Sydell Group, which developed the Line, said in a statement that the hotel had been “vindicated.”
“In a time of such uncertainty it is nice to see that facts and law still prevail over the self interest of a very few,” he said.
But council member Elissa Silverman (I-At Large), chair of the council’s Labor and Workforce Committee, said she wants to review the new information the hotel presented to the District.
“I’m surprised and angry the council was not alerted to this redetermination,” said Silverman, who had been unaware that the District had granted the subsidy. “We want to understand what changed to meet these milestones.”
The spokeswoman for the employment services agency did not respond to a request for additional detail on why it issued the subsidy.
Michael Robbins, a Line spokesman, said the hotel gave “the same” documentation it had previously submitted to the District. He said the employment services agency “failed to properly review” that documentation when it was turned over in 2019.
Unique Morris-Hughes, the agency’s director, wrote in an October letter to the District’s chief financial officer, that her office had “conducted a compliance review” and concluded that the Line had met its hiring requirement.
Morris-Hughes also wrote that her agency, guided by a “legal opinion” from the attorney general’s office, had concluded that the hotel had met the requirement of reserving all apprenticeships for D.C. residents “because no District resident who requested an apprenticeship was turned away.”
A spokesperson for the attorney general’s office declined to comment, citing attorney-client privilege.
Of the project’s 31 apprenticeships, 14 went to District residents, according to the March audit. That total fell far short of what community leaders were expecting, said Bryan Weaver, a former advisory neighborhood commissioner who helped conceive the tax abatement legislation.
“They didn’t try to get people in the neighborhood, which was the whole idea behind it,” he said. “Everything about this was, how are we going to get local people jobs?”
Weaver was the first to question whether the developer had met the requirements of the tax abatement legislation, which the council passed a decade ago.
In 2019, the employment services agency recommended that the Sydell Group pay a $600,000 fine instead of losing the abatement. But Attorney General Karl A. Racine (D) advised at the time that the legislation required strict adherence to the requirements.
At one point, the hotel created a website that included a list of what it said were