MURIEL BOWSER
MAYOR
November 25, 2024
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Avenue, NW, Suite 504
Washington, DC 20004
Dear Chairman Mendelson:
Enclosed for consideration and adoption by the Council of the District of Columbia is a proposed
resolution entitled “Supermarket Tax Incentive Expansion Approval Resolution of 2024”.
The resolution will expand the geographic areas in which supermarkets may receive tax
incentives under the Supermarket Tax Incentive Program (“Program”), established by D.C.
Official Code § 47-3801. The expansion areas include downtown and the Northeast DC
neighborhoods of Woodridge, North Michigan Park, Lamond Riggs, Queen’s Chapel, and Fort
Totten.
Through the Program, the District provides exemptions from certain taxes and fees to grocery
stores that locate in specific neighborhoods. The exemptions encourage development and
investment in areas lacking access to groceries and fresh food.
I have determined that the Program should be expanded to include downtown because the
Program’s tax and fee exemptions will support the District’s efforts to add 15,000 residents
downtown by 2028. For more residents to live downtown, we will need more grocery options.
However, grocery openings traditionally lag behind housing development—creating a food
access gap and a disincentive for residents to locate downtown. In addition to our other planning
efforts, the Program’s tax incentives will combat that lag and make it more attractive for grocers
to begin investing in downtown.
Additionally, I have determined that the Program should be expanded to include the Northeast
neighborhoods of Woodridge, North Michigan Park, Lamond Riggs, Queen’s Chapel, and Fort
Totten. These neighborhoods have a total population of over 23,000 residents, but only are home
to a Walmart Supercenter and a Yes! Organic supermarket. Across the District/Maryland border,
there are a number of national retailers, specialty markets, and local/regional markets that offer a
variety of grocery options. The expansion of the eligibility area of the Program to includes these
Northeast neighborhoods will increase the likelihood that these types of food retailers will locate
in the District, offering our residents an opportunity to more easily access affordable food
options within their neighborhoods and providing the opportunity to recapture District dollars which are being spent on groceries outside the District.
I urge the Council to take prompt and favorable action on the enclosed resolution.
Sincerely,
Muriel Bowser
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g;::::-
at the request of the Mayor
A PROPOSED RESOLUTION
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
To approve an expansion
of the eligible area of the supermarket tax incentives provided by
Chapter 38 of Title 4 7 of the District of Columbia Official Code to include census tracts
47.02, 58.01, 58.02, 59, 94, 95.03, 95.04, 95.05, 95.07, 95.08, 95.09, 101, and 107.
RESOLVED,
BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
resolution may be cited as the "Supermarket Tax Incentive Expansion Approval Resolution
of
2024".
Sec.
2. Pursuant to section 47-3801.01 of the District of Columbia Official Code, the
Council approves the plan submitted by the Mayor to the Council to expand the eligible area
of
the supermarket tax incentives authorized by Chapter 38 of Title 47 of the District of Columbia
Official Code to include census tracts 47.02, 58.01, 58.02, 59, 94, 95.03, 95.04, 95.05, 95.07,
95.08, 95.09, 95.04, 95.03, 94,
101, and 107.
Sec.
3. Fiscal impact statement.
The Council adopts the fiscal impact statement
of the Chief Financial Officer as the fiscal
impact statement required by section 4a
of the General Legislative Procedures Act of 1975,
approved October 16, 2006 (120 Stat. 2038; D.C. Official
Code§ 1-301.47a).
Sec.
4. Effective date.
This resolution shall take effect immediately. GOVERNMENT OF THE DISTRICT OF COLUMBIA
Executive Office of the Mayor
Office of the Deputy Mayor for Planning and Economic Development
Nina Albert
Deputy Mayor
John A. Wilson Building | 1350 Pennsylvania Ave, NW, Suite 317 | Washington, DC 20004
Supermarket Tax Incentive Boundary Expansion Plan
Pursuant to D.C. Official Code § 47-3801.01, the Mayor has determined that additional areas (the
“expansion areas”) warrant investment pursuant to Chapter 38 of Title 47 of the D.C. Code (the
“Supermarket Tax Incentives Program”).
This plan describes the expansion areas, geographically and otherwise, and provides a detailed
rationale for extending the tax incentives provided for by the Supermarket Tax Incentives Program
and an explication of the benefits to be derived for the expansion areas and the District as a whole.
1. Expansion Areas
The chart below describes the expansion areas:
Census Tract Ward Location Population
47.02 6 Downtown 3,934
58.01 2 Downtown 1,672
58.02 2 Downtown 2,145
59 6 Downtown 2,617
101 2 Downtown 2,699
107 2 Downtown 2,296
94 5 Woodridge (Northeast) 4,424
95.03 5 Michigan Park (Northeast) 3,106
95.04 5 North Michigan Park (Northeast) 3,208
95.05 4 Lamond Riggs (Northeast) 3,796
95.07 4 Queen’s Chapel (Northeast) 1,525
95.08 5 Queen’s Chapel/Fort Totten (Northeast) 4,243
95.09 5 North Michigan Park (Northeast) 3,194
2. Downtown Expansion Area
The area for expansion of eligibility in the downtown area (the “Downtown Expansion Area”)
is bounded generally by New Hampshire Avenue, NW, to the west, Pennsylvania Avenue, NW,
to the south, Louisiana Avenue, NW, and North Capitol Street to the east, and Massachusetts
Avenue, NW , and K Street, NW, to the north. Encompassed in this area are the Downton East,
Chinatown, Penn Quarter, and Golden Triangle neighborhoods and the area traditionally
known as downtown. The current population of the Downtown Expansion Area is estimated to be 15,363 residents. These neighborhoods and the traditional downtown area are the focus
of the District’s Downtown Action Plan, which includes over $400,000,000 in investments,
including residential, public realm, retail, and economic evolution. The goal under the
Downtown Action Plan is to add 15,000 residents within the expansion area. The population of the Downtown Expansion A rea is expected to double over the next 5 years
as some of the current office buildings convert into residential buildings. Retail and grocery
openings traditionally lag behind housing development creating a food access gap. To address
this concern in the development of new housing in downtown, there has been a focus on
incentivizing mixed-use development, which combines housing and retail options, and which
has been successful in other areas of the District and in other jurisdictions nationwide. By
making the Supermarket Tax Incentive benefit available in the Downtown Expansion A rea, the
District will add another tool to incentivize supermarket development and help build a robust
downtown for living, work, and play.
3. Northeast Expansion Area
The area for expansion of eligibility in the Northeast area (the “Northeast Expansion Area”) is
bounded generally by North Capitol Street, Blair Road, and Kansas Avenue to the west, Rhode
Island Avenue, NE, to the south, and Eastern Avenue, NE, to the east and the north.
Encompassed in this area is a total population of 23,496 residents, but only two grocery
options. Just across the District/Maryland border, however, there are a number of national
retailers, specialty markets, and local/regional markets that offer a wide variety of grocery
options. This concentration of grocers on major routes into/out of the District on the Maryland
side have become the primary grocers for District residents in this area of Northeast DC.
The expansion of the Supermarket Tax Incentives Program to the Northeast Expansion Area
will provide an opportunity to create access to food options directly within these
neighborhoods. Additionally, expansion of the program, and the creation of additional food
options, provides the opportunity to recapture District dollars which are being spent on
groceries outside the District. In addition, by incentivizing grocery store development within
the Northeast Expansion Area, the District can capitalize on the co-location of grocers with
major public transportation amenities, including the Fort Totten and Brookland Metrorail
stations, potentially driving more commuter dollars to be spent within the District.
4. Benefits to the District
The proposed expansion of the Supermarket Tax Incentives Program to the Northeast and Downtown Expansion Areas will create targeted incentives to attract new grocery stores to the
downtown and Northeast areas which will benefit both current and future District residents and businesses and foster further economic development. The expansion will also allow the District
to capitalize on existing demand for groceries by capturing market share from neighboring
jurisdictions. As an added benefit, with the strategic location of grocery stores in the two expansion areas, the District will be able to attract new spend from the commuter population who work and shop downtown, and those who drive through the Northeast corridor on Riggs
Road, New Hampshire Avenue, and Rhode Island Avenue. This expansion will support the
District’s commitments to increase food access and affordability, create new jobs within the
food economy, support economic mobility and growth, and recapture District dollars being
spent externally.
Supermarket Tax Incentives Plan Expansion Map
with District Grocery Stores 2
GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE ATTORNEY GENERAL
BRIAN L. SCHWALB
ATTORNEY GENERAL
Legal Counsel Division
MEMORANDUM
TO: Tomás Talamante
Director
Office of Policy and Legislative Affairs
FROM: Megan D. Browder
Deputy Attorney General
Legal Counsel Division DATE: October 18, 2024
SUBJECT: Legal Sufficiency Review of the “Supermarket Tax Incentive Expansion Approval Resolution of 2024”
AE-24-515
_____________________________________________________________________________________
This is to Certify that the Office of the Attorney General has reviewed the
“Supermarket Tax Incentive Expansion Approval Resolution of 2024” and determined that it is
legally sufficient. If you have any questions, please do not hesitate to call me at (202) 724-5524.
_________________________________ Megan D. Browder
Government of the District of Columbia
Office of the Chief Financial Officer
Glen Lee
Chief Financial Officer
1350 Pennsylvania Avenue, NW, Suite 203, Washington, DC 20004 (202)727-2476
www.cfo.dc.gov
MEMORANDUM
TO: The Honorable Phil Mendelson
Chairman, Council of the District of Columbia
FROM: Glen Lee
Chief Financial Officer
DATE: October 17, 2024
SUBJECT: Fiscal Impact Statement – Supermarket Tax Incentive Expansion
Approval Resolution of 2024
REFERENCE: Draft Resolution as provided to the Office of Revenue Analysis on
September 25, 2024
Conclusion
Funds are sufficient in the fiscal year 2025 through fiscal year 2028 budget and financial plan to
implement the bill.
Background
The Supermarket Tax Incentive (“Incentive”) is an exemption of certain property and sales and use
taxes for ten years for new retail supermarkets that locate in specified areas. Established in 2000, the
incentive was initially limited to one of six census tracts or in a Historically Underutilized Business
Zone (“HUBZone”), which is defined by the United States Small Business Administration (SBA) and
updated periodically. Legislation enacted in 2021
1 changed the definition of eligible area to include
neighborhoods with over 20 percent participation in the Supplemental Nutrition Assistance Program
(SNAP) or other public assistance programs, as well as properties in low-income census tracts where
residents are more than a half-mile from the nearest supermarket.
To qualify for the Incentive, at least 50 percent of the store’s selling area must be dedicated to at least
six of these seven categories of food: meats, poultry and seafood, dairy, canned food, frozen food, dry
goods, and non-alcoholic beverages. The stores must also accept SNAP and the Special Supplemental
Nutrition Program for Women, Infants, and Children (WIC) as payment.
1
Supermarket Tax Incentives Amendment Act of 2021, effective November 13, 2021 (D.C. Law 24-45; 68 DCR
12567). The Honorable Phil Mendelson
FIS: “Supermarket Tax Incentive Expansion Approval Resolution of 2024”, Draft resolution as provided to the
Office of Revenue Analysis on September 25, 2024
Page 2 of 2
Eligible stores qualify for 10 years of exemption from real property taxes, the food merchant license
fee, personal property taxes, and sales and use taxes on the purchase of all building materials used in
constructing the store.
The 2021 legislation also granted the Mayor the authority to propose new areas to be included in the
Incentive and established a passive approval process for the Council. This approval resolution from
the Mayor proposes to expand the Incentive to include certain census tracts in areas of Downtown
and Northeast DC. The census tracts in the Downtown area include the neighborhoods of Downtown
East, Chinatown, Penn Quarter, and Golden Triangle. The census tracts in the Northeast DC area
include the neighborhoods of Woodridge, Michigan Park, North Michigan Park, Lamond Riggs,
Queen’s Chapel, and Fort Totten.
Financial Plan Impact
Funds are sufficient in the fiscal year 2025 through fiscal year 2028 budget and financial plan to
implement the bill. No planned supermarkets are under construction in the newly eligible areas.
Because of the lead time required to plan and open a supermarket, the expansion of the eligible areas
to additional neighborhoods in Downtown and Northeast DC is not likely to significantly change the
number of supermarkets taking advantage of the credit during the financial plan period.