Neighbors face uphill battle against abandoned foreign missions

The long-vacant Argentine-owned row house at 2136 R St. NW is one of many abandoned foreign missions in the Sheridan-Kalorama area. (Brian Kapur/The Current/June 2017)

When Alan and Irene Wurtzel purchased a Sheridan-Kalorama town home in 1993 next to a vacant building owned by the government of Argentina, they were assured their neighbors would return soon.

Twenty-four years later, neighbors are nowhere to be seen and the once-opulent home at 2136 R St. NW has fallen into a state of disrepair. It’s a surprisingly common sight in the highly desirable neighborhood, where abandoned diplomatic properties sit starkly juxtaposed with sprawling mansions and elegant gardens.

“The Argentine property is an eyesore and a health hazard,” Alan Wurtzel told The Current. It’s infested with rats, he said, and he fears the crumbling facade could easily collapse onto his property.

Similar issues have swirled around properties owned by Serbia, Sri Lanka, Egypt and Pakistan, among others, and are a source of frustration for neighborhood leaders. When the Wurtzels complained to Advisory Neighborhood Commission 2D (Sheridan-Kalorama) in May, commissioner Ellen Goldstein expressed little optimism based on fruitless meetings with U.S. State Department and D.C. government officials about a Serbian-owned property at 2221 R St. NW.

“[The officials] just keep saying, ‘We’ve talked to them and they say they’re going to fix it up.’ I know that’s not going to happen, and even the State Department probably knows that’s not going to happen,” Goldstein said at the meeting.

According to a spokesperson from the State Department, there are no immediate plans to remove the Serbian Embassy’s diplomatic status; however, the property is “under regular review.” The department has authorized restoration efforts, although officials suspect that funding issues may have stalled work.

But for two properties — including the Wurtzels’ neighbor — relief may be in sight. Argentina’s ambassador had told the Wurtzels more than a decade ago that the country would gladly be free of the property with its tax burden, but the country’s 2001 default meant it couldn’t freely dispose of its assets. Now, a spokesperson for the Embassy of Argentina told The Current that as the nation’s economy has improved in the last couple of years, the government is reviewing what to do with its R Street house.

“There isn’t a use for it anymore,” the spokesperson said. “We will probably sell the property. A decision will be made not in years — I think in months or weeks.”

Complicated tax laws apply to properties owned by foreign governments — and play a role in the fates of abandoned buildings there. Properties with diplomatic status are exempt from any local property taxes, but the State Department can revoke that status if a property is vacant. However, although most vacant or “blighted” D.C. properties are taxed at a much higher rate than those that are occupied and well-maintained, government-owned properties — including those held by foreign governments — are exempt from that rule.

According to a U.S. State Department spokesperson, the Argentine property lost its diplomatic status in the late 1980s, but the country kept control of the property by paying the standard property tax rate — currently $0.85 per $100 of its assessed value of $2.6 million. That’s the same rate paid by the Wurtzels, rather than the $5 or $10 per $100 of assessed value normally billed for abandoned and decrepit buildings. “It might seem unfair, but these are the laws,” Matt Orlins, spokesperson for the D.C. Department of Consumer and Regulatory Affairs, told The Current.

The Argentine government generally paid its taxes punctually, despite four penalties of about $1,000 apiece since 2005, when online records became publicly available.
The former Sri Lankan Embassy at 2148 Wyoming Ave. NW is similarly vacant and dilapidated, according to ANC 2D chair David Bender. Bender submitted an inspection request to the regulatory affairs agency that was ignored, he said. The property has been taxed at occupied commercial building rates — $1.65 per $100 — since 2016, still a fraction of vacant or blighted rates.

Pakistan’s former embassy sits at 22nd and R streets NW. (Brian Kapur/The Current/June 2017)

Meanwhile, hope is in sight for Pakistan’s former embassy at the corner of 22nd and R streets. It currently looms abandoned in echoing silence aside from the chatter of occasional vagrants and the squeaks of rats. Its boarded-up windows, deserted parking lot and mangled fence suggest occupants have no plans to return.

But the property’s diplomatic status was revoked in February 2016 after years of lobbying by ANC 2D, according to Bender. Like the Sri Lankan Embassy, it is taxed as an occupied commercial property. However, the Pakistani government never made a payment — even at the normal tax rate — resulting in an outstanding balance of $131,606.79 as of July 15. After the Pakistani government failed to pay any portion by the May 31 deadline, the city government seized the property. The residence was purchased by investment company MCAG at the District’s annual tax sale July 17 and 18, according to Renee Van Dyke of the Office of Tax and Revenue.

Such leverage doesn’t exist when a property retains its diplomatic status, as in the Serbian case. Although it’s assessed at $4.8 million, D.C. can’t collect property tax for the unused building or seize it for nonpayment.

Ward 2 D.C. Council member Jack Evans said it’s difficult to police foreign properties because actions impact U.S. diplomatic relations. “The State Department needs to look at the whole picture,” Evans said. “But it does take a very long time.”

According to a State Department spokesperson, before a foreign-owned property is deemed abandoned, “matters of reciprocity” must be considered.

The Wurtzels are well aware of the difficulties. In 2004, a representative of the Argentine ambassador had breakfast at their home, and they pointed to evidence of the neighboring property’s dilapidation. According to the Wurtzels, the Argentine response was brief and superficial: Front steps were swept once and an unattractive rock garden was installed to replace overgrown weeds. “We never saw them again,” Irene Wurtzel told The Current.