- The Washington Times - Wednesday, February 15, 2006

Developers plan to continue with the $190 million conversion of the Watergate Hotel while lawyers wrangle over whether its renovation to co-op residential units should be permitted.

The dispute, scheduled for a hearing today in the D.C. Court of Appeals, is expected to drag on for years.

A group led by attorney Jack H. Olender is suing the D.C. Zoning Commission and real estate developers, saying they lacked authority under the District’s zoning laws to convert the historic hotel to co-ops.

The D.C. Zoning Commission granted the developers, a partnership called BRE/Watergate LLC, permission for the project nearly two years ago. The partnership is led by Monument Realty.

Mr. Olender also says the conversion would disrupt the lifestyles of residents who live in the adjacent Watergate East and Watergate West co-op apartment buildings.

Mr. Olender is a resident of the Watergate East and chairman of a group called Watergate East Committee Against Hotel Conversion, which he says represents more than 100 residents.

“We believe the D.C. Zoning Commission improperly allowed the Watergate Hotel zoning to be changed for co-op apartment use,” Mr. Olender said. “The Zoning Commission did not have jurisdiction over all of the properties affected by the modification.”

Residents of the Watergate East complex own partial interests in the hotel at 2650 Virginia Ave. NW, but their permission was not sought before the zoning was changed to allow the conversion, he said.

“Watergate co-op owners and residents would be deprived of our property rights because we purchased our apartments with the promise and expectation that we would have use of the hotel and its restaurant and health club as amenities,” Mr. Olender said.

Some residents of the Watergate West apartments in the complex of six commercial and residential buildings are joining Mr. Olender’s opposition.

Pauline Newman, a Watergate West resident, said the hotel is a public resource that would be lost if it is converted to co-ops.

“It just opens up the complex to the community and the public to have a hotel right in the middle of it,” she said.

Developers say the appeal stands little chance of success.

Michael Darby, principal in Monument Realty, says he does not understand why anyone would oppose the conversion to co-ops.

“A new residential building will surely help the property values of the complex,” he said.

He blamed the lawsuit on a few residents who lacked credibility.

Mr. Olender “has been opposed to the conversion of the Watergate Hotel to residences since we began the zoning modification nearly two years ago,” Mr. Darby said. “However, he has never provided any real reasons why except that he likes to use the hotel.”

In other news …

• Two investment firms have joined to purchase Laurel Mall in Laurel, Md., for $31 million.

The mall covers 23.2 acres at 14828 Baltimore Ave. and includes major tenants such as Hecht’s, International Furniture Liquidators and Victoria’s Secret.

The mall was purchased by Los Angeles-based Somera Capital Management and Boston-based AEW Capital Management in a deal arranged by Marcus & Millichap Real Estate Investment Brokerage Co. The mall was sold by a court-appointed trustee who took possession from Laurel Center Associates.

Property Lines runs on Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail [email protected]

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