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Capital Business
Posted at 05:07 PM ET, 03/29/2013

D.C. issued $400,000 loan for failed Metro project

On top of losing out on a deal to acquire Metro-owned property on Florida Avenue, development firm Banneker Ventures is stuck repaying a D.C. Housing Finance Agency loan that it took out despite having never acquired the land.

The housing financing agency, headed by Executive Director Harry D. Sewell, first issued a loan of $300,000 to Banneker in September of 2008 when it appeared highly likely that the Metro board would approve the sale of the property to Banneker, the D.C firm headed by Omar A. Karim. The loan amount was increased to $400,000 in 2009.

Banneker went to work planning the project, dubbing it “The Jazz,” but Metro never finalized the agreement. Its board of directors tabled approval of the sale and in 2011 opted instead to sell the property to the JBG Cos., of Chevy Chase, for $10.2 million.

Sewall issued a statement saying the loan “was made for pre-development costs associated with the construction of three mixed-income and mixed-use buildings consisting of a total of 103 residential units.”

He said the loan comes due Nov. 1 and that Banneker is current on payments, even though the buildings it planned will never be constructed.

Earlier this week, Banneker sued Metro, former Metro board member Jim Graham and competing developer LaKritz Adler, alleging in a 60-page complain that Graham scuttled the deal in an attempt to secure the deal for LaKritz Adler. Banneker asked for $100 million in damages.

Graham, who represents Ward 1 on the D.C. Council, issued a statement calling the accusations “spurious and wholly unfounded.” Metro does not comment on pending lawsuits. LaKritz Adler did not return the Post’s inquiries.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

By  |  05:07 PM ET, 03/29/2013

Tags:  Banneker Ventures, Jim Graham, Metro, commercial real estate

 
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