Earlier this year, without the objection of the Redevelopment Land Agency, Webb & Knapp sold its interest in a portion of the project area. Committee information indicates that there was a $5 million windfall profit during the life of the contract to the redeveloper for this part of the area.

About 1 year ago, the Redevelopment Land Agency concluded contracts with Webb & Knapp on which was said to be the biggest land disposition in urban renewal history. This was at a time when the financial difficulties of Webb & Knapp were a matter of common knowledge. Within months after this transaction, Webb & Knapp Co. began to sell its contracts to other syndicates for redevelopment. The Redevelopment Act prohibits speculation in urban renewal lands and the disposition of the uncompleted projects without consent of the Agency.

The committee will consider the need for a further study of these transactions between Webb & Knapp Co. and successor developers and the legality of such agreements.

Mrs. Ellis, you are the first witness this morning.

STATEMENT OF MRS. SARAH E. ELLIS, REPRESENTING THE ELLIS SEAFOOD RESTAURANT

Mrs. ELLIS. I am Sarah E. Ellis, and I represent the Ellis Seafood Restaurant, 1011 E Street NW. I am here today to answer any questions that would be of help of this committee involving the terrible situation we seem to have gotten in, in regard to the redevelopment of the Southwest waterfront. I have included some history and background, because I feel it is necessary to support some of the points I make in my testimony. After 32 years, our family business on the waterfront was closed by order of the Redevelopment Land Agency at the end of 1959. There has been no effort made to relocate our business by that Agency, despite misleading reports. The same situation applies to a majority of the other displaced businesses of the waterfront.

I have in my possession, in regard to relocation, a letter from the former Director of the Redevelopment Land Agency in which he lists the efforts that were made to relocate us.

Mr. DOWDY. That is Mr. John R. Searles you are talking about? Mrs. ELLIS. Yes, Mr. Searles.

There are quite a few discrepancies in that, because in one place he makes the statement that eight people had been offered a chance to relocate in a building. The same building, though, was offered to all eight people. Now, under the so-called Downtown Progress plan, I am threatened with the bulldozer at the door of our other business, located at 1011 E Street NW., established in 1936. This is across the street from the old Weiseroister House site, where my great uncle operated on the site of the Harrington Hotel, a raw bar, and served such historic officials as Daniel Webster and his contemporaries.

The promoters of Downtown Progress who are not really representative of downtown business in general are amazingly, extraordinarily, fanatically hungry to attain the ruthless Federal power of eminent domain in order to assemble land, to seize real estate power, to destroy buildings and to eliminate hundreds of small businesses which serve

the central city in the traditional American manner of family-owned enterprises.

Many of these buildings could have been, probably would have been, rebuilt or upgraded if it had not been for the ominous threat of the bulldozer.

As an example I call your attention to the major remodeling job undertaken by Murphy's and the new Safeway Building on F Street, which were undertaken in spite of this progress threat. And an amazing thing is the last book which Downtown Progress put out to back the plan for bringing the power of eminent domain under urban renewal, because I believe all the buildings pictured there that show progress at this time downtown have been built by private enterprise. The record stands that rebuilding and revitalization of the downtown area has lagged behind other areas; namely, L Street, K Street, Pennsylvania Avenue, and it will continue to depress the central city as long as they use the threat of the bulldozer.

In regard to the waterfront, when the urban renewal laws were enacted by Congress, the great need for slum clearance in Southwest Washington was an emotional issue, cited by many national leaders with the need for action on the fighting front of city revitalization very evident, complete with pictures of slums at the foot of the Nation's Capitol.

What has been the record? After 15 years, the Southwest area of the Federal City is largely an undeveloped prairie with little community life. Thousands of families have been displaced and scattered to the four winds. In most cases they were forced into housing which was worse than that which was destroyed. In most cases these families were forced to find their own roots outside the District of Columbia.

In the Southwest area, 748 small businesses were displaced and I would like to add that unless you are part of it you will never know the anguish and the mental strain that these people who have been displaced and it has resulted in deaths of three in the group in the old Southwest Fish Market. For instance, one man not only lost two businesses, but his family home as well, and after 42 years he still has not been relocated.

We are just like refugees, it seems to me, under these programs. We go from place to place and you hardly establish yourself in a new place before you are forced out of business either by urban renewal or by freeways. I could tell you the story of several that have lost their second locations.

Those displaced businesses which were relocated by the RLA could be counted on very few fingers. Public Law 85-821 which Mr. Dowdy spoke of which destroyed the Washington Fish Market had this in its report. Congress was convinced from testimony of the officials of the Redevelopment Land Agency that they would relocate these businesses temporarily and permanently. And I think 42 years is a long wait, either for temporary relocation or for permanent relocation.

At the rate of this record the Small Business Administration is fighting a losing battle. The RLA can destroy small business much faster than all forces of government and community cooperation can possibly recreate.

In the meantime, the corporate taxes, the income taxes, and the payrolls of these businesses have been lost to the Treasury forever. I ask: Is this a way to mount a war on poverty? The District of Columbia, particularly the Southwest, which was to be the showcase of the Nation, has turned out to be the disgrace of urban renewal. Families displaced without relocation which now people call "The People Removal," small businesses destroyed irrevocably.

The normal municipal tools of zoning, building codes, health and sanitation regulations, fire hazard rules, taxation methods, have been ignored almost from the moment RLA has expressed interest in bulldozing. Normal consultation with the business community has been avoided. Bankers, parking experts, economists, small business experts, nonprofit housing groups, a confusing relentless blanket of property seizure has oozed over the landscape, destroying homes and businesses, communities and churches and human lives, all at great public expense.

Justification of the huge public cost has not yet been established. Great areas of wasteland do not produce tax revenues. Families which are destroyed do not produce a sound government. You should hear some of the bitterness that I hear expressed from the people that have been displaced.

Small business which is destroyed produces no revenue to the city or Federal Government, and I ask you, where is our boast of American private enterprise which we are wont to give to the people of other countries?

Surely the District Committee should ask for a justification of this program before any more lives and any more businesses are destroyed.

Despite the fact that the waterfront has been repeatedly cited as a key feature of the Nation's urban renewal showplace, the Southwest projects, the delays and waste have been almost unbelievable. Repeatedly outside consultants and planning groups have been hired at public expense to do the work which RLA and the National Planning Commission were reluctant to perform.

After 4 years not 1 square foot has been leased or sold, rebuilt or redeveloped.

For several years the Agency blamed the waterfront delays on a need to build a new bulkhead. That bulkhead was completed in June 1963, but not one spadeful of dirt has yet been turned over in the redevelopment of parcel No. 90, the waterfront.

I might add this: That when the law was passed which destroyed S. 5821 we were told the land was needed for a temporary road while Maine Avenue was relocated. It has not been relocated yet.

A special land use study for the waterfront was prepared by the Real Estate Research Corp., Chicago, and offered to the public, February 15, 1961. Upon the basis of this research study, the priority holders submitted their proposals and applications only to discover that RLA is not following the recommendations of their own consultants. In particular, RLA has chosen to ignore professional standards for waterfront parking and has proposed a canyon of low parking garages on both sides of the new street, Water Street. Furthermore, the RLA plan would require restaurants and shops to be built on stilts, while the parking area underneath would become a community property, with no relation to the parking needs of the individual businesses.

In other words, we leased the land, we build a building over the land, but we have no control over the parking on the land which we have leased, and I hold that that is only giving us air rights and not what the priority law requires, because it plainly says we shall have the right to lease real property.

We have asked RLA for an explanation of how this grotesque plan can be managed or how it can be financed under normal business or banking procedures, because we will not have a clear lease with such requirements as that.

You can guess that there has not yet been any satisfactory solution suggested. Furthermore, RLA has resisted proposals for submitting the problem to a committee of reputable bankers and parking experts. Mr. Chairman, the committee will probably remember that when it was proposed that the city should build an underground parking garage at Farragut Square, with a landscaped roof, the Congress turned down the project when it was determined that the work would cost $7,000 per car space, and yet, if we have surface parking on the waterfront, that is what the National Capital Planning Commission has required us to do.

We will never have the low interest Federal financing on the waterfront that they had at Farragut Square, remember that. In spite of this, RLA has no hesitancy in trying to force a similar construction project upon the priority holders of the waterfront in a brandnew soft fill which is interlaced with steel tie rods to hold back the bulkhead, and in that contract which was mailed to us we also must post bond that we will not damage those tie rods.

Another aspect of this situation is the picture of a restaurant on stilts over an underground cesspool subject to seepage and sewerage flooding. I cannot imagine the health inspector approving of this arrangement under a place where food is to be served.

Mr. Chairman, we can hardly forget also that when we were granted a hearing before the National Capital Planning Commission to protest this peculiar parking plan, we went through a cruel hoax of a hearing. We were asked to submit recommendations and to testify before the Commission at a hearing and when I returned back to my place of business I was informed that the plan had already been approved and was on the printing presses before that hearing was convened and before we even testified.

The fierciest resistance we have encountered from RLA has been to our plans for providing on-site customer parking, which is the lifeblood of the neighborhood restaurant business.

Our purpose in wanting to provide surface customer parking is simply that we wish to reestablish our displaced businesses in accordance with the priority legislation provided by Congress, because we certainly had no gardened roofs down on the waterfront where we were in business before, or underground parking, either.

The Real Estate Research Corp. strongly emphasized the waterfront need for customer surface parking; at least one car space for each two and a half restaurant seats.

That is the Research Corp.'s recommendation, which I am told RLA is not now following.

Personally, I have more faith in the report of those experts than in the proposals of any agency which ignores its own professional

consultants, which they have hired at great cost to the taxpayers. I heard at one time that this Chicago research firm alone was paid $37,000.

Every time we tried to explain our problem to RLA, we got the impression that everyone has turned off the hearing aids. Although a few meetings have been held, there has been no real communication between the Agency and the priority holders. Perhaps for this reason there has been no disposition of real estate.

At the last conference that we had with RLA we were promised, when we complained about the price, that we would have another consultation in which we could submit figures, but I take it that that is not going to take place, because I was surprised to read in the paper that they have had a meeting with their appraisers and given us 10-percent reduction in prices. so if it was announced to the papers, I presume we are not going to be heard.

Mr. DowDY. Ten percent from what?

Mrs. ELLIS. Of the amount of money that the land was appraised at in the original, in the contract we were given on February 27. Mr. DOWDY. My question is: How much is it appraised at?

Mrs. ELLIS. I was getting to that further down.

Mr. Dowdy. If it is in your statement, all right.

Mrs. ELLIS. I think it ranges anywhere from $6.85, perhaps I am not too familiar with the ones for the restaurant which will have more than one story-the land was priced at $17 per square foot, so the 10-percent reduction is really just a token, because you can see how little that would mean and we must pay 6 percent a year rent on that land, you see.

Since the land use study of 1961, and particularly since the report of the nonprofit consultant organization, Washington Channel Waterfront, Inc., in 1963, we have tried repeatedly to enter into site selection discussion. Even after the Washington Channel Waterfront recommendations for sites for priority holders, we have not been successful in getting these conversations started. An immediate stumbling block, of course, has been the parking. The Agency has repeatedly protested inability to allow thinking about underground parking, or the expensive gardened roofs.

I can imagine what a job we would have keeping that landscaping in good condition, hosing it down to give it sufficient water over these hot summers we have here in Washington.

Another block to site selection talks has been a very quaint and interesting answer. The priority holders cannot afford to lease this land anyway, or to build the buildings. I have witnesses as to that particular argument being used and have submitted testimony in regard to that because I believe that is very important to the whole city that is threatened with having the power of eminent domain used under urban renewal because it shows so plainly that if the land is going to be so expensive and the buildings are going to be so expensive to build and the requirements are going to be so difficult, this, certainly to me, is a clear admission that people have very little chance to relocate unless they are big business or corporations.

What secrets has RLA been trying to keep from priority holders, from Members of Congress, or from the public? A complete revelation of their crystal ball secrets would be extremely interesting read