- The Washington Times - Monday, October 9, 2000

The Human Rights Campaign, a homosexual rights group, said last week it will join other local nonprofits that have built their own headquarters to protect themselves from rising rents in the city.

HRC currently leases its office space on 18th Street NW.

Group leaders said they have started a five-year campaign to raise money to purchase new space. They said they don't know how much it will cost to build or buy a new office, but they estimate owning their own space will save the group $15 million over 15 years.

"The business case is clear," HRC Executive Director Elizabeth Birch said in a press release, adding that owning its own building will "insulate" the group from rising rents in the city.

The average rental rate for premium office space in the District increased to $42 per square foot, a 7 percent rise, during the first six months of 2000, according to Alexandria-based real estate research firm Delta Associates.

John Benzinger, senior vice president for D.C.-based brokerage Cassidy & Pinkard Inc., said nonprofits like HRC are increasingly buying their own office space, although rising rent isn't the only thing driving the trend.

Some groups want to own their office space because it gives the organization a sense of stability, he said.

Mr. Benzinger, who has helped groups like the American Association of Medical Colleges and the Chesapeake Bay Foundation build offices, said the strong economy has made it easier for private groups to raise money to buy office space.

"The nonprofits are getting a lot of donations these days. It's generally easy for them to raise money for a targeted project like building a building," he said.

The District offers tax-exempt financing to charitable groups that purchase office space, another reason nonprofits are buying buildings, according to Richard Newman, a District tax lawyer.

"It can significantly reduce the cost of occupancy," Mr. Newman said of the tax-exempt financing laws. He said the city enacted the laws several years ago because it wanted to encourage nonprofits which frequently host revenue-generating conferences and meetings to come to the District.

The tax-exempt financing laws generally apply to charitable groups and not to trade associations, Mr. Newman said.

Chris Vest, spokesman for the American Society of Association Executives, said trade groups generally only buy their own office space if they can find it available in a city-designated enterprise zone, where the District offers tax breaks to encourage employers to set up shop.

"[It] as been as much a cost-control issue for associations as it has been an investment issue," Mr. Vest said.

Nonprofits choosing to own their own office space isn't a new concept.

Bill Thompson, director of finance for the National Education Association, said it has owned its headquarters at 1201 16th St. NW since 1919. Over the years, the group has expanded, and now owns about 350,000 square feet at the site, Mr. Thompson said.

Other groups that have owned their own space for several years include the American Chemical Society at 1155 16th St. NW and the American Red Cross at 17th and D streets NW.



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