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From The Ground Up

Diamond Dealer Says He Was Cut Out of Lease

By Dana Hedgpeth Dina Elboghdady
Monday, April 4, 2005; Page E03

Ronnie Mervis, the local diamond importer known for his radio commercials, filed a lawsuit March 16 against Ronnie Cohen, a well-known Rockville developer, saying Cohen backed out of a deal to lease him a retail spot on Rockville Pike.

Mervis said he agreed last summer to lease a 3,000-square-foot space at 1775 Rockville Pike, which had housed a Storehouse furniture store, for roughly $12,000 a month from Cohen. Mervis says Cohen changed his mind in February.

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"I was going to redo the space with granite, glass and steel," Mervis said of the $200,000 he planned to put into the store. "But he never turned the space over to me. It was delay after delay, and then he tells me in early February that he wanted to demolish the building and put in condos."

Mervis said that Cohen offered him temporary space in one of his other shopping malls but that he was not interested. "He said we could buy condo space in the first floor of his new building [for the store] but it wouldn't be ready for two to three years," Mervis said. "Our response was, 'Sorry, buster. We're not interested.' "

Cohen has denied the claims, saying the case is simply a dispute between landlord and tenant about when the space would be turned over. "I signed a lease and I intend to honor the lease," Cohen said. "This is just such a ridiculous process." Cohen said he had not filed a zoning change or had plans to turn the property into condos.

"I showed [Mervis] a sketch of something I was working on," Cohen said, that depicted condos and retail space on the site. Cohen said he asked Mervis whether he wanted to move into a temporary space in the developer's Congressional South shopping center if he built a project at the former Storehouse site. "He told me, 'Very interesting,' and then he goes and hires a lawyer," Cohen said.

Cohen and his brother are best known in the real estate industry for their projects on Rockville Pike, including Congressional North, a big-box shopping center that includes a Bed, Bath & Beyond and a Michaels craft store. Mervis has stores in Tysons Corner and the District and is building a second store downtown. He closed his store in Rockville, barely a mile away from the disputed site, in February.

Mervis said that without a presence in Rockville, his sales have decreased. A hearing for a temporary restraining order to stop Cohen from tearing down buildings at the site is scheduled for tomorrow.

New Offices in Chantilly

A commercial real estate company based in Illinois is developing two office buildings on 18 acres in Chantilly's Westfields Corporate Center.

Alter Group, which owns 18 business parks nationwide, said the two six-story buildings could support as much as 300,000 square feet of office space near the intersection of Routes 28 and 50.

CSX Realty Development LLC, an affiliate of CSX Transportation Inc., owns the land.

The buildings will be part of a 1,100-acre business park anchored by the National Reconnaissance Office, a federal agency that designs, builds and operates the nation's reconnaissance satellites. Alter plans to market the space through Grubb & Ellis Co. to defense contractors eager to be near NRO. Dulles International Airport is three miles north of the park.

No tenants have committed to the buildings, but two "major office users" have expressed interest in the space, which should be ready in 18 to 24 months, said Matthew A. Ward, Alter's senior vice president. Tenants that moved into the business park in the past two years include Northrop Grumman Corp., Aerospace Corp., Computer Sciences Corp. and Science Applications International Corp., Ward said.

He said that Alter had hired Hickok Warner Cole Architects to handle the design and that the company was talking with Fairfax County officials "to make sure our product is complementary with the county's vision for the project."


• Burton J. Reiner resigned as president of Rockville-based Bresler & Reiner Inc. but remains on the development firm's board of directors, the company said in a statement. Company officials did not explain Reiner's resignation and did not return phone calls seeking a comment. Sidney M. Bresler replaced Reiner as president and will continue as chief executive. Darryl M. Edelstein, chief financial officer, will replace Bresler as chief operating officer. Edelstein will remain chief financial officer until his successor is named.

• Direct Invest, a real estate company in New Jersey, bought an office building in Greenbelt for $13.3 million ($160 per square foot) from Goldstar Group Inc. of Bethesda. Real estate firm Cassidy & Pinkard represented the seller of 6401 Golden Triangle Dr.

• Cassidy & Pinkard represented Nineteenth & K Ventures LLC in the sale of an office building at 1875 K St. NW. The building sold for $113.1 million. A private investor bought the property as part of a 1031 exchange, a tax code provision that allows a buyer to sell a rental property and buy another without paying capital gains tax on the first.

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