By Megan Sayles
AFRO Staff Writer
msayles@afro.com
The DowntownDC Business Improvement District (BID) hosted the State of Downtown Forum at Georgetown University Capitol Campus on April 22. The gathering brought together industry, government and business leaders to discuss key economic shifts and trends that are impacting the District’s Downtown neighborhood.
The day of the forum arrived after a series of freezes by Mayor Muriel Bowser to address the District’s $1.1 funding shortfall. The gap was spurred by a federal continuing resolution that forced D.C. to revert back to its 2024 budget levels in March, effectively slashing funding D.C. planned to have for 2025. Though Bowser said she remains “very optimistic” about Downtown’s condition, she also acknowledged the fiscal pressure D.C. is under.
“If the CFOs estimates hold, within the next four years we have to replace the economic activity of 40,000 employed D.C. residents. We know who those people are, and we want them to stay in the District,” said Bowser. “We want them to get new jobs in the District, to go to District universities, buy D.C. houses and put their kids in D.C. schools.”
The employed residents D.C. stands to lose are federal workers. Since the 47th president came into office, he has charged Tesla billionaire Elon Musk and the Department of Government Efficiency (DOGE) with making massive cuts to the federal workforce. Compared to other states, D.C. has the highest percentage of its workforce employed by the federal government at 13.2 percent, according to the Economic Policy Institute.
Federal contracting, hospitality and transportation jobs are also expected to be lost as the blow to the federal workforce will cause a decline in demand for the sectors.
However, Bowser said investments in public safety, families, schools and clean and safe recreation could help to stimulate the District’s economic growth. She plans to prioritize these areas in her Fiscal Year 2026 budget.
The District’s budget woes being brought on by the federal government have illustrated the economic consequences of D.C.’s non-state status, according to Bowser. Because D.C. is a federal district and not a state, Congress has the power to modify or overturn its budget and laws.
The March continuing resolution was a way for the federal government to avoid a shutdown and keep its agencies funded temporarily. Though the Senate has already approved a bill that would make D.C.’s budget whole again, the House has yet to move on it.
“The only way that this interference is rectified is when the tax-paying citizens of Washington, D.C. are full Americans. The political and democratic problem is that we pay taxes, but we’re not represented with a voting member of Congress,” said Bowser. “The business problem is we literally have a balanced budget, unlike our federal partners. Every year, we balance our spending priorities with our revenue, yet we’re talking about a Summer of cuts.”
A strategy that has emerged to curb the District’s financial challenges is converting commercial spaces in Downtown to residential units. With more people working from home and shifts in D.C.’s employment base, some offices sit vacant.
District leaders are hoping to usher in a new era where Downtown thrives as a mixed-use community. One opportunity for this is in the Federal Triangle, a central part of D.C. where many government offices and institutions are situated. As it stands, some believe the Federal Triangle blocks visitors and residents from enjoying all of the District’s attractions.
“I’ve come to view the Federal Triangle as our local version of the Berlin Wall. It separates the cultural part of our city from our commercial core, and it deprives the city of the energy of 28 million tourists who annually visit Downtown,” said Shalom Baranes, founding principal of Shalom Baranes Associates, a D.C.-based architecture firm. “This energy would manifest itself in additional tax dollars and revenues, more housing and certainly more jobs.”
Baranes recommended that the District convert federal office buildings built before 1940 into residential buildings. He explained that their designs are nearly identical to modern apartment buildings today, which would make their redevelopment less expensive.
Rather than sell these buildings to the private sector, Baranes suggested that the federal government lease them to private companies on a long-term basis. This means no public dollars would be required for converting the buildings.
“This is a generational opportunity to breathe life into our Downtown, and I don’t believe that this moment will last very long,” said Baranes. “Our city is teaming with developers who would jump at the opportunity to sign long-term ground leases and renovate these beautiful, historic buildings. I think someone needs to create a Federal Triangle master plan that could direct this development and create a vibrant, new mixed-use community.”
