AMERICAN IRON AND STEEL INSTITUTE
American Iron & Steel Institute (AISI), a $19 million 501(c)(6) organization based in Washington, D.C., had offices in the Central Business District for over 50 years. AISI engaged West, Lane & Schlager nearly four years before the lease was scheduled to expire to begin strategic planning.
There were several major takeways from the strategic plan. The first was that the Institute’s current space was highly inefficent. The office layout and location did not allow AISI to effectively perform its core mission. And while a Capitol Hill location was ideal, the cost of space in that neighborhood was $10.00 – $15.00 per foot (20 – 25% higher) than comparable options in the Central Business District. Therefore, AISI’s senior leadership and the board finance committee could not justify a move to Capitol Hill.
During this time, real estate costs in Washington, D.C. had significantly increased, causing a number of nonprofit organizations to relocate to Arlington, Virginia. To stem this outflow of tenants, WLS Principal Eric West and a small group business people lobbied the D.C. Government to provide real estate tax abatements to nonprofit organizations. Four years later, the D.C. Government approved a trial program. In exchange for a nonprofit signing a lease in an emerging market (such as Southeast Waterfront or Anacostia), the D.C. Government would grant a 10-year real estate tax abatement of up to $8.00 per square foot.
WLS helped to dramatically elevate the American Iron and Steel Institute’s position as an industry leader. Our goal was to increase our effectiveness and visibility by hosting more meetings with members of congress. Unfortunately, office space costs on Capitol Hill were 20% more expensive than the current location – a cost we couldn’t justify. Eric and the WLS team secured a previously unused DC government real estate tax abatement worth over $1.0 million that effectively eliminated the cost premium of moving to the Hill. As a result of our move, we now host dozens of meetings per month with members of Congress.
WLS Principals Eric West and Ganon Rich secured a Capitol Hill building for AISI on 25 Massachusetts Avenue NW, which is technically located inside the emerging submarket of NoMa (North of Massachusetts Avenue). While the asking rent was almost $10.00 per foot above the cost of the Central Business District alternative, the tax abatement narrowed the gap to only $2.00 per foot. In addition, WLS was able to secure a year of free rent, which effectively eliminated any cost premium. As a result, the total value of the abatement for the client was more than $1 million dollars.