Monday, March 03, 2008

Monument Wins Injunction on WMATA's Ballpark Site

Monument Realty won a temporary victory last week in its dispute over the Washington Metro Area Transit Authority (WMATA) site near the ballpark, scoring an injunction on the sale or transfer of the bus depot that it had unsuccessfully sought to purchase in 2007. Monument originally planned 100,000 s.f. of retail on the site, located on the western side of Half Street - the block-long street that will serve as the main promenade to the ballpark (see rendering, above). The site would complement the 275,000 s.f. of office space, 50,000 s.f. of retail and 320-unit residential building that Monument is already constructing on the other side of Half Street (see photo, below), all just a block away from the Nationals' new stadium. In a ruling issued February 28th, a U.S. District Court enjoined WMATA from selling the land until further consideration by the court.

The site became the nexus of a dispute between Monument and WMATA last year, after Monument's failed attempt to secure the land in a public offering that WMATA eventually awarded to Akridge. Both Monument and Akridge (among 8 others) had responded to the solicitation for the bus garage by submitting bids to WMATA, but the Monument bid contained an escalation clause, a term that WMATA's offering had specifically prohibited, and which WMATA disregarded in their calculation of the bids. Discounting Monument's escalation clause, Akridge had the higher offer and was awarded the site for its bid of $69 million. With the game apparently over and Akridge heading for the showers, Monument is now asking for the instant replay.

Specifically, Monument is looking back to December of 2005, when the Anacostia Waterfront Corporation (AWC), on behalf of the District, designated Monument Realty as the Master Developer for the Half Street area. Under the designation, Monument was given the exclusive right to negotiate, acquire and develop properties along Half Street owned by the District. Monument then acquired the eastern side of Half Street, incorporating the Navy Yard Metro Station. AWC then attempted to negotiate the acquisition of the disputed bus garage (see photo, below), to be folded into Monument's plan.

It was then that WMATA issued a Joint Development Solicitation to invite developers to jointly (with WMATA) develop the bus garage. The District then requested that WMATA end its solicitation and coordinate all further development plans with the AWC; WMATA voluntarily complied, vowing to synchronize future development with the AWC. As the District Court pointed out in its Injunction, WMATA was obligated, based on its own Policies and Procedures, to offer the host government the first right of refusal on any property it sells, priced at fair market value.

After a successful purchase of the site above the Navy Yard Metro Station, Monument then made an unsolicited bid on the bus garage site, negotiating directly with WMATA rather than the AWC. Rather than accept the sole bid, WMATA's board - believing itself not obligated to deal exclusively with Monument - voted to invite competing bids, and issued an Invitation for Bidders. Shortly thereafter the District informed WMATA that it would exercise its right to purchase the site. WMATA withdrew its invitation, and agreed to sell the site to the District. WMATA claims that the District subsequently decided not to purchase the Bus Garage, and with that in mind, issued a second invitation for bidders. It was this second phase that attracted 10 bidders, and ended in Monument's bid being partially disqualified and Akridge being awarded the property last September.

On October 26th, Monument sought a Temporary Restraining Order against WMATA to enforce the right of first refusal as an intended third party beneficiary, claiming breach of contract, fraud, and breach of fiduciary duty. The District Court threw out the tort claims because of WMATA's sovereign immunity, but did not throw out the remainder. Monument re-filed on January 2 of this year, with a widdled-down motion for a preliminary injunction against the sale, which the judge granted last week.

"The Court recognizes the merits of this case by taking the serious step of ordering injunctive relief. We are committed of the Capitol Riverfront neighborhood as evidenced by our investment of tens of millions of dollars in this project over the past several years. We've always had a grand vision for Half Street and realize the importance of the project as it is the gateway to Nationals Park. It is great to know that we still have the opportunity to make the city's goal of having a coordinated development plan. A successful project for us also equals success for the city and for The Nationals", said Jeffrey Neal, co-founder and principal of Monument Realty (and former Akridge executive).

A 'Status Conference' will be held to discuss further proceedings on March 7th, after each party has been able to file their individual recommendations.


monkeyrotica on Mar 4, 2008, 8:19:00 AM said...

Okay, dumb this down for me, please.

1. Who owns the Half Street property in question?

2. When will it be developed?

3. Who do I have to lobby to get a Texas Cheescake Suppository built there?

Ken on Mar 4, 2008, 9:34:00 AM said...

WMATA owns the site, and has for a long time. We don't know when it will be developed, the courts must first determine if Akridge or Monument will get the site, then it will be up to the developer to determine the timeframe. We offer no guesses on either issue.

monkeyrotica on Mar 5, 2008, 3:09:00 PM said...

Cool. Hopefully, the foot traffic going to the stadium will generate some interest.


DCmud - The Urban Real Estate Digest of Washington DC Copyright © 2008 Black Brown Pop Template by Ipiet's Blogger Template