Wednesday, July 30, 2008

The Walter E. Washington Convention Center Authority intentionally interfered with one of its exterior retail leases, keeping out a small disadvantaged business in favor of a group led by Michael A. Brown, a lobbyist and former D.C. mayoral candidate, a D.C. jury has found.

The WCCA was ordered this week by the D.C. Superior Court jury to pay the local business, Miller Copying Services, $500,000 in compensatory damages. Mr. Brown and two co-defendants, who were also found guilty of conspiring to keep Miller Copying out of the lease, were ordered to pay $740,000.

“The convention center didn’t honor the promises they made [to the small businesses in the neighborhood],” said Bernard Miller, owner of Miller Copying Services.

The convention center is funded through a variety of sources, including hospitality taxes and rental fees.

When the District’s convention center plans came together in the late 1990s, many of the local neighboring businesses were promised a shot at the 12 retail spaces that line the perimeter of the center, according to Mr. Miller and other nearby retailers. As the owner of Miller Copying, then housed just east of the convention center site, he went after the lease for the business center.

Meanwhile, Mr. Brown pursued a contract to do the food service work at the convention center. When that fell through, the WCCA suggested he get involved in the business center deal, according to Mr. Miller’s attorney, J. Michael Hannon Jr.

Mr. Miller charged that Mr. Brown and co-defendants Rodney Keller and Kelvin Johnson formed Urban Hospitality LLC and later MKM PNET LLC to get the business center lease. Mr. Miller said he wrote Mr. Brown a $10,000 check to start the joint operation.

In the complaint, Mr. Miller said the WCCA and Mr. Brown had “secret” meetings in March and April 2006 to sign a lease, deleting Mr. Miller from the lease but keeping his local small disadvantaged business accreditation.

The jury agreed with Mr. Miller.

Mr. Brown, when reached by phone on Tuesday, said only that his attorneys are appealing the case and that “the evidence doesn’t support the verdict.”

Gregory A. O’Dell, WCCA’s chief executive officer and general manager, said in a statement: “It is unfortunate that we are in this situation regarding a retail tenant and one of our neighboring businesses. As part of our retail program, we have tried to help incubate local, small and disadvantaged businesses. As there have been some challenges with the retail for the convention center, we will revisit our retail strategy immediately under my leadership.”

He said the WCCA plans to pursue “all available remedies” in the case.

In previous hearings in front of the D.C. Council, former WCCA General Manager Reba Pittman Walker admitted there were problems with the retail program. A request for proposals for a new retail manager was put out earlier this year.

The dozen retail spaces that line the outside of the convention center have been a sore spot for the five-year-old complex. At least four tenants have filed lawsuits against the WCCA over problems with construction on their spaces. In addition, eight neighboring retailers have filed a joint suit against the convention center charging that it hasn’t lived up to promises made before construction started.

Once touted as economic development catalyst, the 12 spaces still haven’t all been leased.

The ruling could put a new light on the other pending lawsuits against the convention center.

“It will attract more scrutiny from the City Council and the mayor’s office to the leadership of the convention center,” Mr. Hannon said.

A hearing on possible punitive damages in the case is scheduled to be held in September.

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