Has Mr. Lyon come in?

Mrs. Ellis, I believe you mentioned Mr. Lyon.

Mrs. ELLIS. Mr. Lammiman was going to send his report in by letter. Mr. Lyon, I do not know; is he here?

(No response.)

Mrs. ELLIS. And Mr. Bergman.

Mr. BERGMAN. Mrs. Ellis, I am here.

Mr. Dowdy. This is Mr. Bergman. Now, Mrs. Ellis, you let me know when Mr. Lyon comes in.

Is Mr. Lammiman here?

Mrs. ELLIS. He is going to send his in by letter.

Mr. Dowdy. When it does come in, it will be made part of the record.

(The letter referred to may be found on p. 2500.)

STATEMENT OF HARRY P. BERGMAN, SENIOR VICE PRESIDENT, RIGGS NATIONAL BANK, WASHINGTON, D.C.

Mr. BERGMAN. Gentlemen, my name is Harry P. Bergman, senior vice president of the Riggs National Bank here in Washington, D.C. My purpose is not to present testimony, but to answer questions that you may have concerning this problem.

Mr. SPRINGER. Have you, Mr. Bergman, had anything to do with this area down here?

Mr. BERGMAN. Yes, sir. We have provided construction financing for quite a few of the high-rise apartments that are being constructed there now.

Mr. SPRINGER. Is there any particular problem in connection, we will say, with the relocation of those who had been on Maine Avenue on the south side of the street as far as financing is concerned?

Mr. BERGMAN. The financing that has been done there today has primarily been insured financing by the Federal Housing Administration; yes. Speaking of other areas, there has been trouble.

Mr. SPRINGER. You make them a loan and Federal Housing insures

the loan?

Mr. BERGMAN. Yes, sir.

Mr. SPRINGER. Have you made any of the loans along there? Mr. BERGMAN. We have made quite a few apartment loans, not along Maine Avenue.

Mr. SPRINGER. Not along Maine Avenue?

Mr. BERGMAN. No, sir.

Mr. SPRINGER. Is there any problem in that connection?

Mr. BERGMAN. It has not been presented to us.

Mr. SPRINGER. You have heard the testimony by Mrs. Ellis. Does this present a problem?

Mr. BERGMAN. The problem that was asked of me was, "Would there be difficulty in obtaining financing from conventional sources where the owner did not control the parking area? And my answer there is "Yes, that I think that businesses such as restaurants, where they are not in control of their parking facilities, that financing would be difficult."

of Mr. Rulon, who is the president of the company which owns Hogate's Sea Food Restaurants, because he is, unfortunately, out of town. I have lived with him through the problems of the waterfront and I think I can probably help the committee best by briefly giving the committee a status report of our efforts to obtain relocation on the waterfront. Unless the committee desires to ask me some other questions, that is what I will do.

Mr. Dowdy. You may proceed. We may have some questions and we usually do.

Mr. JACKSON. Understand, Hogate's Sea Food Restaurant and Flagship Restaurant, and some of the people who sell seafood from boats may be in a little more fortunate position with respect to their present status than somebody like Mrs. Ellis. The businesses under the municipal wharf have been demolished and have not been relocated during the time subsequent to demolition. Hogate's and the Flagship and the boatmen continue to survive and their businesses are continuing. They will suffer very great damage if there is any interruption. Their object has always been to have a new place to go to as soon as the present business buildings are to be demolished. Up to now there has been, it seems to me, the utmost good faith on the part of the Redevelopment Land Agency in permitting certainly Hogate's to remain in its building during this time. We had always maintained that one of the basic elementary errors in the entire redevelopment plan on the waterfront was that the statute did not require the adoption of a formal plan with precise boundaries and distinct determinations of the use of the land before condemnation and demolition occurred.

Nevertheless, that is a problem which affects Mrs. Ellis and those people in her class at the present moment. It does not affect Hogate's. All things that are passed are relatively unimportant to us now and the main object is to get ahead with the job and get our businesses relocated and built. We are ready. The minute that a site is given to us or assigned to us which is satisfactory and agreeable and at a rental which is fair and in accordance with what we conceive to be the intent of Congress, Hogate's is ready to return immediately to start to build. It has on numerous occasions presented its requests to the Redevelopment Land Agency and has laid claim to a site from the earliest days which is a site which we think all of the administrative actions of the Redevelopment Land Agency has always pointed to as the relocation site for Hogate's and as a result of which Hogate's has spent a considerable amount of money already planning. Our main problem today and the one which we last presented to the Redevelopment Land Agency Board at its meeting of October 16 was (a) obtaining the assignment of a site; (b) a hearing on the land use value on the basis of which the rent is to be fixed. We have presented the evidenec which we think justifies an administrative assignment of a site to Hogate's and that I understand is in the bosom of the Board and of the Agency. They are considering our application.

I will say another thing about that in connection with some of the questions which have been asked with respect to parking.

At the present time, of course, the Redevelopment Land Agency has anticipated that all parking will be open to the public. I have understood that there is a certain amount of realization on the part of the members of the Redevelopment Land Agency that there are problems

Mr. BERGMAN. That is correct. She would not go into the business unless she was satisfied that there was adequate parking. Mr. SPRINGER. Are you familiar with the plan down there?

Mr. BERGMAN. Not too familiar.

Mr. SPRINGER. You do not know the story on parking?

Mr. BERGMAN. No, sir.

Mr. SPRINGER. That is all, Mr. Chairman.

Mr. DOWDY. As I understood Mrs. Ellis, the kind of lease that had been offered her she would have to build her building and build it high enough so that parking could be under the building and she would not control that parking but it would be public parking. I think, Mr. Springer, you may clear what she said you were asking about or at least the way I understood her testimony she would have trouble.

Mr. BERGMAN. Yes. Then she could not control that public parking underneath the restaurant. It could be built up for other uses than people coming to the restaurant. She could not control it. Mr. DOWDY. I understood that was the particular problem.

Mr. SPRINGER. Just one followup question. There may be an answer to this but I do not know, Mr. Bergman.

Down there they might have to have high-rise parking. You have high-rise parking in downtown Washington?

Mr. BERGMAN. A little bit of it.

Mr. SPRINGER. Sufficient. You do not have to be next door to that restaurant, but if there is sufficient parking she would have to have physical control of that parking, would she not?

Mr. BERGMAN. Not if there is an adequate amount of parking within the immediate neighborhood.

Mr. SPRINGER. The question is whether you paid for that or not is not the important thing?

Mr. BERGMAN. I do not think so. Normally, as Mrs. Ellis said, when you go to a restaurant in downtown Washington the restaurant picks up the cost of the parking.

Mr. SPRINGER. That is what I understood. That is all.

Mr. DOWDY. Any questions?

Mr. GARBER. No.

Mr. Dowdy. Thank you, Mr. Bergman.

Mr. BERGMAN. Thank you, Mr. Chairman.

Mr. DOWDY. I believe Mr. Jackson is the next witness on our list.

STATEMENT OF THOMAS S. JACKSON, ATTORNEY, HOGATE'S SEA FOOD RESTAURANT

Mr. JACKSON. I was trying to ask Mr. Bergman a question, Mr. Chairman. He has just testified or presented his views to the committee on financing and I wanted to know whether he had been asked to consider the effect of the absence of the subordination of the lease to the loan and would it affect the ability of these people to finance their businesses. I think it will affect it. I do not think it will prevent it but I think the real problem is the amount of the loan which will be obtainable. I say this as a preliminary and as an aside in connection with what I heard Mr. Bergman say.

My name is Thomas S. Jackson and I am an attorney for the Hogate's Sea Food Restaurants. I appear here today at the request

of Mr. Rulon, who is the president of the company which owns Hogate's Sea Food Restaurants, because he is, unfortunately, out of town. I have lived with him through the problems of the waterfront and I think I can probably help the committee best by briefly giving the committee a status report of our efforts to obtain relocation on the waterfront. Unless the committee desires to ask me some other questions, that is what I will do.

Mr. Dowdy. You may proceed. We may have some questions and we usually do.

Mr. JACKSON. Understand, Hogate's Sea Food Restaurant and Flagship Restaurant, and some of the people who sell seafood from boats may be in a little more fortunate position with respect to their present status than somebody like Mrs. Ellis. The businesses under the municipal wharf have been demolished and have not been relocated during the time subsequent to demolition. Hogate's and the Flagship and the boatmen continue to survive and their businesses are continuing. They will suffer very great damage if there is any interruption. Their object has always been to have a new place to go to as soon as the present business buildings are to be demolished. Up to now there has been, it seems to me, the utmost good faith on the part of the Redevelopment Land Agency in permitting certainly Hogate's to remain in its building during this time. We had always maintained that one of the basic elementary errors in the entire redevelopment plan on the waterfront was that the statute did not require the adoption of a formal plan with precise boundaries and distinct determinations of the use of the land before condemnation and demolition occurred.

Nevertheless, that is a problem which affects Mrs. Ellis and those people in her class at the present moment. It does not affect Hogate's. All things that are passed are relatively unimportant to us now and the main object is to get ahead with the job and get our businesses relocated and built. We are ready. The minute that a site is given to us or assigned to us which is satisfactory and agreeable and at a rental which is fair and in accordance with what we conceive to be the intent of Congress, Hogate's is ready to return immediately to start to build. It has on numerous occasions presented its requests to the Redevelopment Land Agency and has laid claim to a site from the earliest days which is a site which we think all of the administrative actions of the Redevelopment Land Agency has always pointed to as the relocation site for Hogate's and as a result of which Hogate's has spent a considerable amount of money already planning. Our main problem today and the one which we last presented to the Redevelopment Land Agency Board at its meeting of October 16 was (a) obtaining the assignment of a site; (b) a hearing on the land use value on the basis of which the rent is to be fixed. We have presented the evidenec which we think justifies an administrative assignment of a site to Hogate's and that I understand is in the bosom of the Board and of the Agency. They are considering our application.

I will say another thing about that in connection with some of the questions which have been asked with respect to parking.

At the present time, of course, the Redevelopment Land Agency has anticipated that all parking will be open to the public. I have understood that there is a certain amount of realization on the part of the members of the Redevelopment Land Agency that there are problems

on that score and that it is entirely likely that there will be some modication of the present contemplation to the extent that the owner of a site, the owner of a building constructed over a parking area, will have some priority of control of the parking under his building. A plan for that has not come out of the Board but we hope that it is presently in the mill. In connection with that, Hogate's Sea Food Restaurant has asked for not only a particular site for its building, but it has asked in the nature of an offer for the neighboring site on which it is willing to construct not as a business proposition entirely. We hope it will not be a lost matter to construct a building to house some of the other people who have been dislocated from the waterfront, who would in turn be tenants of the Hogate people but at a rent formula which would be exactly the same insofar as the land is concerned and Hogate's would pay the Redevelopment Land Agency so that there would be a combination of the parking area under the Hogate's building and under these buildings so that there could be a coordination of parking to take care of different times of intensity of the use of parking.

For example, where the restaurant building of Hogate's will require its heaviest parking in the evenings or at lunch hours. The building housing some of the sales of seafood businesses would not require parking at night or probably none, so that that area would have a more intensive use for restaurant parkers.

In any event, I do not pose as a parking expert and all I know is that Mr. Rulon, as the primary owner of Hogate's sees an advantage to everybody in combining not a single building but combining a single parking area for the use of a number of businesses.

So, we have pending an application for a site for Hogate's. We have pending an application for a second site on which this additional building will be constructed but which we believe would be entirely in conformity with the intent of Congress, to make available an area for relocation of businesses which have been displaced and which may not, because of high rents or other reasons, have been able to accept the tenders made by the Redevelopment Land Agency some time ago to them.

However, the main thing that is troubling Hogate's is the same thing that is troubling the other displaced people and that is rent charges. The proposal is that the 180-day notice ran on a plan in which the businesses were not specifically assigned any particular location and presumably they were to give notice of an intent to relocate after which there would be as assignment or a negotiated assignment of sites to various businesses. Hogate's came in and asked for a particular site. They did not agree to pay the rent which was asked for that site, on that particular site, as it was on several similar sites. The rent in the first notice was a rent based on a land use value of $17.30 a foot. Mr. SPRINGER. Per year?

Mr. JACKSON. The rent would be 6 percent of the land use value. Mr. SPRINGER. Per year?

Mr. JACKSON. In round numbers, putting it in concerete terms, 30,000 feet in the site selected and it had a land use value of $17.30. The rent would be 6 percent of the 30,000 feet at $17.30. That is the simple formula on annual rent.