Mr. HUDDLESTON. I cannot see how any harm would come to Hogate's or to the Redevelopment Land Agency by having a conference and going over this matter.

Mr. JACKSON. I cannot, either.

Mr. HUDDLESTON. The Redevelopment Land Agency certainly would not be bound to accept your figures and you would not be bound to accept their figures?

Mr. JACKSON. That is what we have asked. I was surprised when the Agency reduced the rents by 10 percent without actually asking us for our appraisal.

Mr. DOWDY. Had you finished your statement?

Mr. JACKSON. Yes.

Mr. Dowdy. I believe that is all. Thank you, sir.

Has Mr. Lyon come in yet?

(No response.)

Mr. DOWDY. Mr. Merine?

STATEMENT OF ALLAN MERINE, OWNER OF THE NEW ENGLAND RAW BAR & RESTAURANT

Mr. MERINE. I am Allan Merine, former owner of the New England Raw Bar & Restaurant in the fishing wharf at the main corner of 12th Street Southwest.

I am appearing here today to answer any questions that may be directed to me.

Before such questions, may I say that I think Mrs. Ellis covered the history of the waterfront in its demolition 5 years ago rather thoroughly. She also covered the proposed price for the land and the plan as well as the edict to supply underground parking. Mr. Jackson did the same.

In order to clarify this picture, I might add that when we think of a price of $17 per square foot given to us by the Redevelopment Land Agency, what we had better do is to add $12 a square foot to the price of such land. This does not make the land $17 a square foot but it makes it $29 a square foot. The way I got to this price of $29 a square foot for the parking that we are going to have no control over is that I asked a couple of parking experts to tell me what it would cost to build this hideous deck and the underground parking that is mandatory. They said on soft ground we can figure from $10 to $12 a square foot and we had better figure $12. So, it is sensible to add $12 to the $17 and then we arrive at a figure of $29 a square foot for the top of the deck. You gentlemen do not have to go very far and you can go to any reputable builder in town and ask him if he can build a twostory edifice on $29 land. I do not think that you can. It is not economically feasible to do so and down on the wharf the land we will say to be priced at $17 is such that if we all went up about eight stories with either office buildings or apartment houses and had restaurants on the first floor, then this makes some sense economically. However, the National Capital Planning Commission has other ideas. They say that a building shall be no higher than 50 feet from the flood line. Mr. Huddleston asked a question as to whether anyone had some basis on what land should be priced at or what we can go by to determine a proper price or rental for this land. I am not a lawyer nor

am I a good public speaker, but as a businessman I can visualize something like this: The Redevelopment Land Agency is not in control of this property. There are two businesses there at the present time whose rental is realistically priced at the present time. You asked Mr. Jackson a question as to what Hogate's is paying at the present time? I do not know. However, in the Star of not too long ago it said there is another business down there and the Star quotes how much rent they are paying.

Mr. HUDDLESTON. What restaurant is that?

Mr. MERINE. That is the Flagship. If you will bear with me a moment I will get their rent. It is in here.

I will have to read a paragraph.

* during the House District Subcommittee hearings questions were raised on the rent charged the restaurant

meaning the Flagship

as the result of the audit report they said the monthly rent was raised from $533.50 a month, which they formerly paid, to $2,083 in August 1963.

That is per month and that makes the rent in the neighborhood of $25,000 a year. The increase was made retroactive to August 1, 1960. * the Redevelopment Land Agency, however, also ruled that the Flagship could deduct the proper cost.

This meant that the rental was reduced from $2,083.33 a month to a net rental of $773.81 per month. That is the present rental the Flagship pays, $773.81 a month, which is $9,285.72 per year. If I am not mistaken they seat in the neighborhood of 550 people.

Mr. DOWDY. How many square feet do they have?

Mr. MERINE. I do not know how many square feet they have. I cannot judge square feet but if you multiply that by 16 square feet per person I think you will come up with approximately the right

amount.

Mr. Dowdy. They seat how many?

Mr. MERINE. 500. Again, I have not counted their seats and I do not know. I say it is in the neighborhood of 550 and I stand to be corrected if I am in error.

Assuming that there are 550 seats in the present Flagship Restaurant at a yearly rental of $9,300, this means they are paying $17 per year per seat. I have figured it out what it will cost the New England Raw Bar when and if it goes back on the wharf at a price of $17 per year, plus $12 per square foot for parking, plus the cost of the building, and all I did was to figure that I would borrow all of these funds and pay a minimum of 6 percent interest. My seats would be $180 per

seat.

Mr. DOWDY. Per year?

Mr. MERINE. Per year, versus the $17 the Flagship is now paying. I am not here to say they are paying too little, but somewhere between $17 and $180, there is a tremendous discrepancy.

Now, I am pretty sure that no one who intends to go back on this wharf, I don't think any of us can pay $180 per seat. We might just as well forget about the whole thing. Now this, of course, is because we have got to lump the cost of the land, plus the cost of the parking, and I think the RLA has to become rather realistic about the price of the land, and I am not going to tell them what to charge, but it ought

to be very, very low. That is, if they want the old priority holders to ever get back their-if that is their intent. I am ready to answer any questions that might be directed to me.

Mr. HUDDLESTON. I have no questions.

Mr. GARBER. Mr. Merine, no one here, so far, has indicated precisely where this matter stands between the priority holders and the RLA, at this moment. Do you have any kind of indication that there is to be a negotiation specifically on the pieces of property? What is your immediate outlook?

Mr. MERINE. Mr. Garber, on October 16, we met in an open hearing with the RLA, at which time they had requested us to-well, they had asked us to pinpoint the locations we required or the locations we wanted, and I picked either one of two locations, one for a restaurant; one for an inn. However, I couldn't stand for this price, and so I said that I would like to negotiate the price. I made my selection at the site, but if the price were going to remain at $17 plus the $12 for my parking facility, I just couldn't go back into business. And I couldn't see where anybody else, could either. Since that time we got a letter from the RLA that they reduced the price of the land, and they did. Of course, the Washington Post has a headline saying "Displacees in Southwest Get a Rent Slash." This was a tremendous slash; 10 percent, just on the land. That helps us to the extent of $720 a year. I have figured out as far as a 200-seat restaurant goes, I would have to pay at these prices, about $36,000 a year.

Mr. DowDY. That is ground rent?

Mr. MERINE. No; that is everything. That is interest on the value of the land at 6 percent, 6 percent on the cost of parking, which I estimated would be $120,000, 6 percent of the cost of the building, which I estimated to be $300,000. These are all estimates given to me by builders. I didn't dream them up.

Mr. Dowdy. Thank you, sir.

Mr. MERINE. You are entirely welcome.

Mr. DOWDY. I have on the list Miss Coleman Mahan or Mr. Nathaniel Keith. Is either one here?

Miss MAHAN. I am Miss Mahan. Mr. Keith is out of the city. I really just came to listen. We are anxious to go back, but we feel the price is too high. I think everybody has said everything that could be said, and I have nothing to add.

Mr. DowDY. Thank you, Miss Mahan.

STATEMENT OF HARRY P. ZITELMAN, COMMITTEE FOR THE RIGHTS OF THE WASHINGTON, D.C., BUSINESS COMMUNITY, AS PRESENTED BY JAMES F. O'DONNELL

Mr. O'DONNELL. Mr. Chairman, I am appearing here for Mr. Zitelman, who was here at the hearing yesterday, but is going out of the city, today. With your indulgence, I would like to read his statement to the committee.

I am James O'Donnell, and this is a statement

Mr. Downy. He put his statement in yesterday.

Mr. O'DONNELL. He put in the statement of yesterday, but not with regard to Southwest.

Mr. DowDY. I see.

Mr. O'DONNELL. I am James O'Donnell, here in behalf of Mr. Harry P. Zitelman, representing the Committee for the Rights of the Washington, D.C., Business Community.

I would like to make an observation which is itself not in the statement, at the outset. After hearing some of the remarks; that is, that I sometimes think with the publicity that has been given to the problems of the priority holders that sometimes the public is lost sight of in the press. And after all, as I understood the Southwest redevelopment program, it was conceived as a program to rid an area of slums and to provide better housing for people, and that the commercial aspect of it was undertaken only incidental to the residential aspect. Based upon the figures I have heard the counsel discussing at this table in the last few minutes and the other witnesses, I would have to assume that the only type of shop, restaurant, and other retail outlet which could exist with such overhead would be a so-called luxury shop. Certainly a restaurant operating with the kind of overhead that is being suggested by the price range and the design requirements could hardly serve a patron a fishplate at $1.50 or a bowl of chowder at 50 cents, and of course, it is the public that provides the patronage, and it is the dent that is going to be made in the wage earner's take-home pay that is going to be effected here, too. So I do think that-I just want to make this observation, that the public has been left out of the picture and it looks as though we are gravitating toward luxury shops which can only operate by charging high prices and providing luxury services for a limited class, in order to meet their overhead.

Now, the statement of Mr. Zitelman is that he is the proprietor, together with his brother and sister, of Basin's Restaurant of 1747 E Street NW. He is a past president of the Restaurant Beverage Association. He is making this statement today on behalf of the newly formed Committee for the Rights of Washington, D.C., Business Community, which came into existence a couple of months ago, and to correct an impression that Downtown Progress, Inc., speaks for the entire Washington business community on urban renewal

matters.

This new committee is comprised of a true cross-section of smalland middle-class business houses throughout the District of Columbia, including Southwest, I might add.

This committee must know that the eyes of businessmen throughout the District of Columbia are now closely focused on RLA, and its treatments in the Southwest program of the so-called priority holders who approximately 5 years ago were displaced from the waterfront. The true test of the kind of treatments that can be expected by businessmen in other parts of the city under RLA can be measured principally by the treatment which is now being accorded to the priority holders displaced in the Southwest urban renewal project. We read in the paper a few days ago that RLA is now adjusting downward by 10 percent the square-foot price to these priority holders at the reloca tion sites. This reduction at this late hour must be an open admission of unfairness and impracticality in the per-square-foot price, which still ranks up to $17.

The businessman of Washington has never fully understood how RLA arrived at the sales price of $3.50 per square foot for projects such as Harbor Square to a nonpriority holding syndicate for land

96-227-65-pt. 6--13

comparable in location, in use and value to that now being offered to the priority holders at almost three times this price per square foot. Explanations appearing in the press on this price differential indicate that the low price of land sold to out-of-town nonpriority syndicates was based upon a so-called negotiated price, whereas the price of land to the priority holders is based upon real estate appraisers. Be that as it may, the businessman of Washington cannot understand why RLA could not have used the top negotiated price figure as the basis for the price of land to the priority holders.

As to the price of land, we must conclude that the priority holders are victims of indefensible discrimination. The situation is a frustrating one in that 5 years after displacement of the business, the displaced businessman is fighting not for preferred treatment, but for treatment equal to that given by RLA to the out-of-town developers. We cannot fail to take note that the most difficult design requirements, particularly parking requirements, which are being imposed by RLA, on the so-called priority holders, but not on the out-of-town redevelopers.

We were shocked at a recent meeting of our committee to hear that the priority holders are being required to provide parking spaces covered with concrete roofs, and they estimated, based upon a survey they made, at an estimated cost of $4,000 to $6,000 per parking space, and that such spaces will not be owned or controlled by the individual proprietor, the priority holder, and therefore will hardly support consideration for a bank loan.

In light of the fact that hundreds of taxpaying businessmen were displaced by the bulldozer in Southwest, that relocation of such displacees in Southwest, in the Southwest area has been negligible, and that approximately 5 years has elapsed after bulldozing, we urgently request the Congress to take all legal and feasible steps to see to it that RLA carries out the intent of Congress in its subsequent treatment of the priority holders seeking to relocate in Southwest.

The situation as of today reminds me of a man who would ask a boy to give up his place in a long line at a ticket window of a circus with the promise that tomorrow the boy could be at the head of the ticket line. When tomorrow comes, the boy is told the ticket price has been raised from $2 to $5, but that he can stil have his place at the head of the line.

On behalf of the members of our newly formed committee and the businessmen whose viewpoint we voice, we greatly appreciate this opportunity to be heard.

This is Mr. Zitelman's statement.

Thank you.

Mr. DowDY. Is there anyone else here who wishes to be heard? We will adjourn until 2.

(Whereupon, at 12:30 p.m., the committee was adjourned to recon vene at 2 p.m. of the same day.)

Mr. DOWDY. The subcommittee will be in order.

Give your name to the reporter.