Friday, May 01, 2009

N Street Hotel Prolongs the Agony

If Development Hell is a real place, surely the planned renovation of the former Gralyn Hotel and Woodbine Apartments at 1743-1755 N Street, NW holds a place in its ninth circle. Since purchasing the stately and historic Dupont Circle properties in 1988, Washington DC real estate tycoon Morton Bender and his N Street Follies Ltd. (NSF) corporation have pursued a variety of redevelopment schemes for the buildings - all of which have been vacant for more than a decade. First, it was going to be an office building and apartment complex - but, since that attempt fell apart in the late-1990s, NSF has been pursuing a hotel for the site. It’s not going well.

This week, NSF was back before the DC Board of Zoning Adjustment (their fifth appearance in two years) to request several variances for the project. Once again, the Board postponed their hearing, this time until October. According to ANC 2B05 Commissioner Victor Wexler, the BZA hearing is just the latest in an eternity of changes and stay requests that Bender and company have wrangled out of the system.

“It’s been going on for many years and I just walked into it,” said Wexler. “I don’t know what this Bender wants, but he’s been turned down by the Federal Court, he came back on appeal and now they want an extension. It’s beyond me…I think Bender would like it to go on forever, so he doesn’t have to pay taxes.”

And The Washington Post agrees. According to that outlet – which in 2006 described Bender as “a litigious developer” and “not a man who likes to negotiate” – the hullabaloo surrounding the N Street site is, in fact, based on Bender’s contention that the District has overvalued the property and charges him a tax rate far in excess of its intrinsic worth. It can't help the District recently raised its tax rate on vacant property from 5% to 10% of the appraised value; according to DC tax assessment records, they're currently valued at $12.5 million. In 2004, he told the Washington City Paper, he wasn't even sure if they had ever been added to the city's vacant property registry.

“What difference does it make?” said Bender. "The bills come in, they get paid.”

Perhaps to prove a point, NSF consequently let the six historic buildings at the site lapse into disrepair over the past decade. Since purchasing the century-old buildings for $8 million in cash in 1988 and finally vacating the final tenants from the 1755 N Street Apartments in 1998 (reportedly by slashing the tires on the last remaining occupant's car), next to no upkeep has been performed on the properties – leading to a 2005 citation for “demolition-by-neglect” from the DC Board of Condemnation for Insanitary Buildings and the site’s inclusion on DC Preservation League’s 2007 list of Washington’s "Most Endangered Places."

"They're not endangered," Bender told the Post following the site's inclusion on the list. "I maintain them." In the same article, he laid blame for the delays afflicting the project at the feet of "unreasonable preservation protections." Nonetheless, the buildings' windows were subsequently boarded up.

But while the properties themselves have seen better days, that hasn’t stopped NSF from continually tweaking their redevelopment plans. Said Bender at a January 2006 BZA hearing:
We were going to [do] an office building [and] apartment house and that didn’t receive too much acceptance. We then have been working on it and have come up with doing a hotel…After going to the ANC and the Office of Planning and hearing all the negative comments, I went back to the architects and said…what can we do?…So we cut the building back from 117 hotel units to 77. We cut the garage to 96 from 127 and minimized whatever issues would be questionable by anybody.
The reduction of the scope of the project, however, hasn’t put its critics to bed. Over the past two years, the Dupont Circle Conservancy, the Historic Preservation Board, the local ANC and host of area businesses and office tenants - including the Tabard Inn, Science Services Inc., United Auto Workers, the Penn Art Ladies, the Middle East Institute and Johns Hopkins University – have all voiced their disapproval of the planned hotel's design scheme. In the meantime, NSF has traded up architects for the project – from JSA Inc. to HAA Architects – and legal counsel. Only after the project’s next BZA appearance this coming October 13th will we know when (and if) N Street will be seeing ever being seeing a new hotel.

For what it's worth, the N Street "folly" is one of the numerous legal battles Bender has immersed himself in over the years. In 2006 alone, he was engaged in two concurrent lawsuits. The first against Independence Federal Savings Bank, where, as the majority shareholder, he waged an unsuccessful take over the District-based financial institution. In the second, he was drawn into a bitter dispute with residents of Northwest's Palisades neighborhood - including former Federal Reserve Chairman Alan Greenspan and his wife, NBC News correspondent Andrea Mitchell - when he sought to build thirteen "mansions" on thirteen acres adjoining Chain Bridge Road. For one of the few times in a conflict-studded career, he lost. Said Mitchell of her opponent: "[He's] a developer with the deepest of pockets and no sense of community obligation."


Chris Loos on May 4, 2009, 9:30:00 AM said...

Sounds like a great guy.

I've always wondered what the story with these buildings was; it's such a posh area of town and then you get to these couple of buildings with boarded up windows. Very strange.

Anonymous said...

He's actually on his third or fourth architect I think. I recall one of the first was Shalom Baranes who he dropped cause he wouldn't deign as tall or large an addition as bender wanted.

si on May 4, 2009, 6:00:00 PM said...

20 years of lost vacant property tax revenue...mmm hmm. I'm surprised DC didnt let this slumbanker put a giant billboard on it while they were at it.

Anonymous said...

I will never understand what motivates people like this. He must have had a rough childhood and feels the need to take it out on everyone else.

tulip on May 5, 2009, 4:35:00 PM said...

Real Property Records show that he owes $579,000 on 1745, 1749, and 1755 N Street. The question I have: will Morton Bender be resourceful enough and DC GOV lame enough to get out of paying this humongous tax bill.

Anonymous said...

Its amazing this guy turned down a $20 million offer from PERS Development last year, during the worst recession in decades. How deep are his pockets and how didi he get there?

Anonymous said...

I just happened on this site while looking to see whatever happened to the Hotel Grayln. We spent our honeymoon there in 1977 and thought we might find a room there for a few nights in July... but i guess that won't happen! I remember we had a room with a four post bed with adjoining bath looking over the street. What a shame !

Henry said...

The hearing is not October 13; it is actually part of an October 6 hearing, at 441 4th St NW, Suite 200, and the case will come up somewhere around 10 or 10:30am. I got this information from Mr. Nero, at the D.C. Office of Zoning.

Henry said...

Oops, the hearing address is 441 4th St NW, Suite 200-SOUTH.

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