There goes the neighborhood … to lobbyists and fundraisers
Residents say they fear their neighborhoods are morphing into a commercial district
Jamie Hogan and Amy Paul, partners in a Republican fundraising agency called HSP Direct, purchased a $1.5 million federal-style townhouse half a block from the Hart Senate Office Building back in January 2017. Now the residential property has become a subject of controversy.
Neighbors allege Hogan and Paul bought the home to serve as their Ashburn, Virginia, business’s Capitol Hill outpost — using the C Street Northeast pad to host fundraisers and other political or policy events.
Strange as it may seem, it’s a common complaint in the enclaves around the congressional campus. As more K Street shops and political operations snap up real estate on Capitol Hill for the proximity to lawmakers, residents say they fear their neighborhoods are morphing into a commercial district, in some cases in violation of zoning regulations and allowing the lobbyist homeowners possibly to pay less in taxes than the business rate.
“In the last few years, what was a residential block has now seen commercial interests coming in and using zoned residential properties for commercial purposes,” said Richard Fiesta, who has lived on the same block as Hogan and Paul’s house since 1994. “The commercial creep obviously has deteriorated the feel of the block.”
Fiesta, who is executive director of the advocacy group Alliance for Retired Americans, and other neighbors, some of whom like Fiesta are professional lobbyists themselves, have raised their concerns with local officials, who have taken notice and are urging the D.C. government to investigate potential zoning violations and to clarify the rules.
“I think this issue is certainly bigger than one house and one property,” said D.C. Councilmember Charles Allen, who represents Ward 6, which includes Capitol Hill. “Every residential house that gets turned into a lobbying headquarters or a fundraising house, it’s one less house that a family can live in.”
Allen recently urged the D.C. Board of Zoning Adjustment to deny Hogan’s application for special exceptions to allow him to expand a garage, adding a finished room and bathroom, on the property, located at 224 C Street NE, across the street from the home of Senate Majority Leader Mitch McConnell.
Zoning in on concerns
It’s that application that has given neighbors, such as Fiesta, an opportunity to bring their concerns about the HSP Direct property, and other homes they say are used as businesses, to the attention of local officials. The zoning application created the circumstances to look at this issue, Allen said.
For his part, Hogan said his neighbors had not previously complained to him and that their opposition to his renovations took him by surprise.
“I try to be a good neighbor,” Hogan said during an interview inside the home, which features a living room, kitchen and dining area on the first floor with access to a patio festooned with lights and leading to the garage he wanted to expand.
Upstairs, the home has a bedroom and an office with two desks and a bathroom with an HSP-branded candle.
One of Hogan’s sons lived on the third floor during his internship this summer, Hogan said, noting he has 10 children. Hogan said he thought he would stay in the home more frequently than he does but noted he’s walked to local sporting events from it and sometimes has hosted receptions.
Another neighbor, Minoo Rouhanian, said catering trucks have blocked up the small alleyway her home shares with Hogan’s property, and she worries that an enlargement to the garage will only increase traffic congestion and noise behind her house. She and other neighbors have submitted photographs and invitations to events at the property to zoning officials.
The home, dubbed the HSP Direct Townhouse, has been listed as the location of political events, including one in May for Ohio GOP Rep. Steve Chabot.
Additionally, neighbors, in researching HSP Direct, discovered that the firm had outlined the home among official duties in a job advertisement including one on LinkedIn stating that the position would include planning and executing “events at our company-owned townhouse in D.C.”
Members of the D.C. Board of Zoning Adjustment, which is planning an Oct. 16 hearing on the matter, expressed skepticism about the residential use of the property during a September session in which Fiesta and other neighbors, including a representative of St. Joseph’s Roman Catholic Church, argued against Hogan’s application.
Hogan did not appear at the September hearing; his architecture firm Fowlkes Studio represented him instead.
Elizabeth Gardner, a nurse at Washington Hospital Center who lives in the 300 block of Third Street Northeast, told the zoning board in September that she bought her home 16 years ago because it seemed like a quiet pedestrian village.
“But since 2003, this pocket of very inner Capitol Hill, the blocks immediately around the Capitol, the Senate buildings, the Supreme Court, et cetera, have become less characterized by neighbors living here and more populated by quasi-business political uses, such as HSP’s event space townhouse at 224 C,” she said.
Two other homes on the 200 block of C Street Northeast have also been the subject of neighbor complaints, Fiesta said, including 211, which serves as the Eagle Forum Education and Legal Defense Fund’s Capitol Hill office, according to the nonprofit organization’s website.
The Eagle Forum’s president, Ed Martin, did not respond to emails seeking comment. The home is classified as residential for tax purposes and the owners receive the D.C. homestead deduction, according to public Office of Tax and Revenue documents.
Also on the block — which is home to the now-infamous Scott Pruitt rental unit and the political power broker paradise 116 Club — is a home owned by solo lobbyist Geoffrey Gray of Bethesda, Maryland.
Gray said after his neighbors complained that he was operating his consulting business out of the property, an investigator with the D.C. Department of Consumer and Regulatory Affairs paid him a visit, finding no violation.
“That’s my house,” Gray said, though he noted it was a secondary residence. “I don’t have a business running there.”
Fundraising and lobbying homes dot the neighborhoods directly around the Capitol, though many, such as the Nike Townhouse on Second Street Northeast and the Credit Union House on C Street Northeast, are zoned and taxed as commercial properties, records show.
Another firm, Runyan Public Affairs, is based out of a commercial space on E Street Southeast, while the Majority Group Townhouse is in a residential/multi-unit space on D Street Southeast, according to property and tax records.
The engineering and construction firm Fluor Corp. has owned its East Capitol Street townhouse for 16 years, said the company’s in-house lobbyist David Marventano. He said the company can document commercial activity in the mixed-use/residential property since the 1840s to a woman-owned dairy. He said his company carefully follows the myriad zoning regulations that apply.
“We bought a facility before the whole craze of going to buy facilities,” Marventano said.
“For us, we just thought it was good for government affairs to be closer to the government.”
Capitol Hill restoration
The American Dental Association Townhouse on C Street Southeast serves as a venue that has the ability to host a variety of events for the group’s members and guests, including meetings, conferences and social gatherings, said the ADA’s Katherine Merullo in an email. She said the D.C. government changed the zoning status from residential to a “private club.”
That can be an easier option for nonprofit organizations as opposed to changing the zoning status from residential to commercial, something experts on D.C. zoning regulations say is nearly impossible.
Gary Peterson, chairman of the Capitol Hill Restoration Society’s zoning committee, said Capitol Hill features large swaths of commercial districts with space to lease.
Commercial tax rates, he estimates, are about three times higher than rates paid for residential properties, especially those receiving the homestead deduction, which reduces homeowners’ tax burden.
Additionally, owning a property on Capitol Hill is viewed as a good investment, he said.
Still, Peterson said, it’s difficult to enforce zoning regulations. He said he’s seeing a new wave of complaints about residential homes being used for business reasons. “It depends on how discrete people are,” Peterson said.
If they’re only doing events or conducting business activities occasionally, “we don’t get complaints,” he added.
Back at his townhouse, Hogan said that he has hosted events infrequently and that he wished his neighbors had reached out to him with their concerns before bringing them to local officials, who plan to consider the zoning application in two weeks.
“I’m probably not going to get approved to do the project,” he said with a shrug.