2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 10 - Property Exempt from Taxation › § 47–1052. Payments in lieu of taxes, lots 878 and 880, square 456

§ 47–1052. Payments in lieu of taxes, lots 878 and 880, square 456.
(a) For the purposes of this section, the term:
(1) “Bonds” means any bonds, notes, or other instruments issued by the District pursuant to section 490 of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 774; D.C. Official Code § 1-204.90), the proceeds of which shall be used in whole or in part to finance or refinance the construction of a theater with a floor area of not less than 18,000 square feet to be used for theater and ancillary facilities on a Parcel.
(2) “District” means the District of Columbia.
(3) “Initial PILOT period” means the period:
(A) Beginning on the earlier of the date on which some or all of the Site is:
(i) Under contract to a contract purchaser who is the Qualified Theater Company; or
(ii) Owned by the Qualified Theater Company; and
(B) Ending on the 6th anniversary of the beginning date.
(4) “Owner” means an owner of a Parcel, other than the Qualified Theater Company.
(5) “Parcel” means each portion of the Site.
(6) “Payment in lieu of taxes” or “PILOT” means payments made in lieu of real property taxes pursuant to this section.
(7)(A) “PILOT period” means the period:
(i) Beginning on the earlier of the date on which some or all of the Site is:
(I) Under contract to a contract purchaser who is the Qualified Theater Company; or
(II) Owned by the Qualified Theater Company; and
(ii) Ending upon the earlier of:
(I) The date on which the Initial PILOT Period expires if, on that date, the District has not issued a building permit for a theater with a floor area of not less than 18,000 square feet to be used for theater and ancillary facilities on any Parcel; or
(II) The real property tax year in which the total amount of payments in lieu of taxes pursuant to this section shall equal or exceed $30 million.
(B) Notwithstanding subparagraph (A) of this paragraph, the PILOT period and Initial PILOT period shall not begin if, on or before November 15, 2002, the District shall make and fund a grant to a Qualified Theater Company in an amount of not less than $20 million, less reasonably projected earnings on the proceeds pending disbursement determined as of the date the grant is funded, for use by the Qualified Theater Company for capitalizable expenditures incurred in connection with the planning, development, acquisition, or construction of a building to include a theater of the type described in § 47-1002(19) on all or a portion of the Site. The Mayor may make and fund such grant, which shall, if made, be subject to the following condition: if a building permit has not been issued for a theater with a floor area of not less than 18,000 square feet to be used for theater and ancillary facilities on any Parcel before the 6th anniversary of the date the grant is made and funded or, if the grant recipient determines that it is unable or unwilling to acquire title to all or a portion of the Site by December 31, 2003, the grant recipient shall:
(i) Repay the District the principal amount of the grant, less the actual third-party capitalizable expenditures incurred by the grant recipient for capitalizable costs incurred in furtherance of the acquisition and development of a building to include a theater with a floor area of not less than 18,000 square feet on all or a portion of the Site including, architectural and engineering fees and expenses; title, survey, and environmental fees and expenses; development and consulting fees and expenses; legal fees; permit fees; insurance costs; issuance costs and related costs, fees, and expenses; land acquisition deposits, costs, fees, and expenses; and capitalizable interest costs; which costs shall not to exceed $6 million in the aggregate; and
(ii)(I) Convey title to such portions of the Site as it has acquired to the District for the sum of its cost thereof, plus any interest costs incurred by it in carrying the property so conveyed; or
(II) Proceed to closing and convey title to the District at the grant recipient’s cost pursuant to simultaneous all-cash closings.
(8) “Qualified Theater Company” means any entity that:
(A) Operates a theater of the type described in § 47-1002(19);
(B)(i) Owns some or all of the Site; or
(ii) Is or was the contract purchaser of some or all of the Site as of [July 10, 2002]; and
(C) Is the current wholly-owned subsidiary of an entity that is described in the subparagraphs (A) and (B) of this paragraph.
(9) “Site” means lots 878 and 880 in square 456 in the District of Columbia, including any improvements thereon, and any combination thereof, all portions of such lots without regard to any subsequent subdivision or resubdivision of such lots, and any other lots developed along with any part of lots 878 and 880 in square 456 pursuant to the combined lot development method.
(b) Except as provided in subsection (d) of this section, during the PILOT period, no real property taxes shall be due and payable from the owner of a Parcel during the PILOT period. In lieu of real property taxes during the PILOT period, the owner of each Parcel shall pay a PILOT, in the amount that would be owed to the District if the Parcel were subject to real property taxation (including interest and penalties in the same amount that would be imposed on delinquent real property tax payments), to the Qualified Theater Company in the manner provided in this section.
(c) Except as provided in subsection (d) of this section, during the PILOT period, the District shall, in lieu of any real property tax bills, send a PILOT bill to each owner of each Parcel, and shall send a copy of the PILOT bills to the Qualified Theater Company. The PILOT bills shall be sent out at the same time and in the same manner as real property tax bills would be sent for the Parcels and shall state the amount of the PILOT owed by the property owner. Except as otherwise provided for pursuant to subsection (g) of this section, the PILOT bill shall state that payments shall be made to the Qualified Theater Company, or at the Qualified Theater Company’s direction, within the same time period that real property tax payments are required to be made.
(d) If, before the expiration of the Initial PILOT Period, on the date that a PILOT payment is made, the total amount of PILOT payments equals or exceeds $6 million and no building permit for a theater with a floor area of not less than 18,000 square feet to be used for theater and ancillary facilities on any Parcel has been issued, the collection of the PILOT shall be suspended and the imposition of real property taxes on the Site shall resume. If, after the suspension of the collection of the PILOT but during the Initial PILOT Period, the building permit is issued, then collection of the PILOT shall resume and PILOT bills shall be sent as provided in subsection (c) of this section.
(e) The PILOT shall constitute a prior lien on the applicable Parcels to the same extent as a real property tax lien.
(f) The Qualified Theater Company may pledge its interest in the PILOT as an account pursuant to Article 9 of Title 28.
(g) If the District issues Bonds, the District may, in financing documents that it enters into in connection with that transaction, provide for the PILOT to be made to the bond trustee for the benefit of the holders of the Bonds, to be used only to pay principal, premium, and interest on the Bonds and for any other payments set forth in the financing documents. If such provisions are included in the financing documents, the PILOT shall constitute a lien against the property on which the PILOT was assessed to the same extent as a real property tax lien and shall be deemed to be a tax within the meaning of 11 U.S.C. §§ 502(b), 505, and 507(a)(8)(B).
(h) The Qualified Theater Company, through its counsel, may file suit in the Superior Court of the District of Columbia against any owner of a Parcel whose PILOT is at least 60 days overdue. The Qualified Theater Company may recover as damages a delinquent PILOT, including interest and penalties, and the Qualified Theater Company’s attorneys’ fees.
(i) Any judgment obtained pursuant to subsection (h) of this section shall not be waived or reduced by the District and shall only be satisfied by the payment to the Qualified Theater Company of the full amount of the judgment, by waiver or compromise by the Qualified Theater Company, or by sale of the relevant Parcel pursuant to subsection (k) of this section.
(j) If the Qualified Theater Company obtains a judgment in a suit filed pursuant to subsection (h) of this section, it may execute upon the judgment using any method authorized by District law.
(k) If a PILOT shall remain unpaid for 180 days after it is due, upon the request of the Qualified Theater Company or its designee, and upon presentment of evidence in a form satisfactory to the District of the PILOT delinquency, the District shall sell the applicable Parcel in the same manner and under the same conditions as property sold for delinquent real property taxes, at the next ensuing tax sale for which proper notice may be given, if the PILOT, including interest and penalties thereon, shall not have been paid in full prior to the sale. The proceeds shall be applied towards the delinquent PILOT, including interest and penalties thereon; provided, that the proceeds from the sale shall be applied first toward any delinquent water and sewer charges, and then toward any delinquent litter control nuisance fines, in accordance, respectively with §§ 34-2407.02 and 34-2110, and § 8-807). The proceeds for the delinquent PILOT, including interest and penalties thereon, and the Qualified Theater Company’s costs associated with the sale shall be delivered to the Qualified Theater Company within 30 business days after their receipt by the District.
(l) A Parcel owner may challenge the accuracy of any PILOT bill in the same manner as if it were a real property tax bill. If, after a Parcel owner pays a PILOT bill, the District determines that the amount of the PILOT bill was incorrect and resulted in an overpayment of some or all of that payment by the Parcel owner, the amount of the overpayment shall be credited against the next PILOT bill with respect to the Parcel.
(m) The remedies available to a Qualified Theater Company under subsections (h), (i), and (j) of this section shall be satisfied only by execution against the Site and no deficiency arising therefrom shall give rise to a personal obligation of the Owners. The penalties, interest, and legal fees provided for in subsections (h), (i), and (j) of this section shall be limited to those available to the District in connection with a tax sale for delinquent real property taxes under Chapter 13A.
(n) This section shall expire on the day after the date on which the District and the Qualified Theater Company have entered into a grant agreement for the making of the grant identified in subsection (a)(7)(B) of this section, and the funding of that grant. The Mayor shall notify the Council when the District and the Qualified Theater Company have entered into the grant agreement and the grant is funded.
(May 2, 2002, D.C. Law 14-129, § 2(b), 49 DCR 2331; Mar. 25, 2003, D.C. Law 14-234, § 2(c), 49 DCR 9775; Apr. 12, 2005, D.C. Law 15-333, § 2(b), 52 DCR 2010.)
Section References
This section is referenced in § 47-1002.
Effect of Amendments
D.C. Law 14-234, in the section heading, substituted “456” for “856”; in subsec. (a), rewrote pars. (7)(B) and (8)(B)(ii); rewrote subsec. (e); and added subsecs. (m) and (n).
D.C. Law 15-333, in subsec. (a)(8), deleted “and” at the end of subpar. (A), substituted “; and” for a period at the end of subpar. (B); and added subpar. (C).
Emergency Legislation
For temporary (90 day) amendment of section, see §§ 2(c), (d) and 3 of Square 456 Payment in lieu of Taxes Extension Emergency Act of 2002 (D.C. Act 14-405, July 10, 2002, 49 DCR 7100).
For temporary (90 day) amendment of section, see § 2(b) of Lot 878, Square 456 Tax Exemption Clarification Emergency Act of 2004 (D.C. Act 15-423, May 10, 2004, 51 DCR 5182).
For temporary (90 day) amendment of section, see § 2(b) of Lot 878, Square 456 Tax Exemption Clarification Congressional Review Emergency Act of 2004 (D.C. Act 15-467, July 19, 2004, 51 DCR 7584.
For temporary (90 day) repeal of section 3 of D.C. Law 14-234, see § 7019 of Fiscal Year 2010 Budget Support Second Emergency Act of 2009 (D.C. Act 18-207, October 15, 2009, 56 DCR 8234).
For temporary (90 day) repeal of section 3 of D.C. Law 14-234, see § 7019 of Fiscal Year Budget Support Congressional Review Emergency Amendment Act of 2009 (D.C. Act 18-260, January 4, 2010, 57 DCR 345).
Temporary Legislation
For temporary (225 day) amendment of section, see § 2(c) of Square 456 Payment in Lieu of Taxes Temporary Act of 2002 (D.C. Law 14-201, October 17, 2002, law notification 49 DCR 10019).
For temporary (225 day) amendment of section, see § 2(b) of Lot 878, Square 456 Tax Exemption Clarification Temporary Amendment Act of 2004 (D.C. Law 15-181, September 8, 2004, law notification 51 DCR 9223).
References in Text
The effective date of the Square 456 Payment in Lieu of Taxes Extension Emergency Act of 2002, passed on an emergency basis on June 18, 2002 (Enrolled version of Bill 14-701), referred to in par. (8)(B)(ii), was July 10, 2002.
Effective Dates
Section 3 of Law 14-234 provided that this act shall take effect subject to the inclusion of its fiscal effect in an approved budget and financial plan.
Editor's Notes
Section 7019 of D.C. Law 18-111 repealed section 3 of D.C. Law 14-234.