GW among the District’s highest property taxpayers

Media Credit: Skylar Epstein | Photographer

GW owns The Avenue complex that houses Whole Foods.

The University pays the 10th-highest amount of property taxes to the District, according to the city’s 2018 Comprehensive Annual Financial Report released late last month.

GW owns more than $428 million in taxable property and pays approximately $8 million in property tax to the District each year, according to the report. This marks the first year that the University has owned enough taxable property to qualify for the list.

GW is the only university that was listed in the report as a principal taxpayer. CC Owner, LLC, a a joint venture between MetLife and Clarion Partners, is the top principal taxpayer with more than $770 million worth of taxable property, according to the report.

While GW does not pay taxes on its educational buildings, it dishes out money to the D.C. government for its commercial properties like Tonic Restaurant, the 2000 and 2100 Penn complexes and The Avenue.

Buildings like District House and Gelman Library are partially taxed because they are both educational and commercial buildings because they include restaurants and coffee shops. Other universities in D.C. like Howard and Catholic universities own some of the most valuable tax-exempt properties in the District, according to the report.

University spokeswoman Maralee Csellar said GW pays property tax on investment properties that do not house University-related functions.

“GW’s investment real estate holdings are used to generate non-tuition driven revenue to support the academic mission of the University,” Csellar said.

She declined to say how officials reacted to GW’s ranking as the 10th-highest property taxpayer in D.C. She also declined to say what factors or real estate endeavors contributed to the ranking.

Csellar declined to say how paying an increased amount of property taxes affects the University. She declined to say how GW intends to continue expanding its real estate portfolio.

The University uses its real estate holdings to contribute to a $1.8 billion endowment. Last fiscal year, GW invested roughly $1.03 billion in real estate and made more than $128 million from increases in property value and rent payments, according to an audit of University finances.

Richard Auxier, a research associate at the Urban Institute and Brookings Institution Tax Policy Center, said GW’s investment in commercial real estate means that the University is contributing to the District by funding local government initiatives.

“They’re a major employer in D.C., they are a major landowner in D.C.,” Auxier said. “They want to have a big footprint both literally and metaphorically on this city because they think it adds to their inherent value not just as a prominent university but a prominent member of the D.C. economy.”

John Petosa, a professor in the accounting department at Syracuse University and an expert in real estate law and taxes, said it is not common for universities to own a lot of commercial property because it is “not necessarily part of its usual mission.” He said GW’s investment in real estate is primarily a financial gain to support the endowment and other University priorities.

“GWU must see an opportunity that they can take advantage of which may contribute to the overall financial health of the University and assist with the future viability of the overall mission,” Petosa said in an email.

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