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From The Ground Up

Bethesda Community Is Hot Property

By Dana Hedgpeth
Washington Post Staff Writer
Monday, April 18, 2005; Page E03

Developers can't help but covet the 50 houses tucked behind the stores and restaurants of Bethesda Row in downtown Bethesda.

In fact, developer Conrad Cafritz, chairman of Cafritz Interests of the District, made an unsolicited offer to buy the homes in the Sacks subdivision, most of them near the intersection of Bradley Boulevard and Leland Street, to replace them with a mixed-use development, according to residents, developers and real estate brokers.

Preservationists say the old Comsat building in Clarksburg is historic. (Courtesy Of Montgomery County Department Of Park And Planning)

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"He made a blanket offer for the entire community," said Benjamin King, a resident and a member of the neighborhood association's board of directors. King and other board members wouldn't confirm the exact amount of the offer. But King said "it was far in excess of $1 million" for each house. Houses sell for roughly $700,000 to $800,000 in the neighborhood, residents said.

Cafritz would not comment publicly on the purported offer or his plans for the neighborhood. The neighborhood is zoned residential and would have to be rezoned for a mixed-use development, planners said.

But the Sacks residents rejected Cafritz's deal, according to members of the board of directors. Some residents didn't want to sell because of sentimental attachment to the brick homes, built in the 1930s, that their parents and grandparents once owned. Others simply didn't think the deal was good enough, especially considering the strings attached.

"Cafritz gave an offer that was unacceptable," King said. "It was contingent on zoning three years down the road. It was a contingent offer with no guarantees that it would come to pass."

Developers and real estate brokers said the neighborhood, which is roughly 12 acres, is sought after because it backs up to a parking lot that Montgomery County plans to redevelop into housing, shops, restaurants and parking at the corner of Bethesda and Woodmont avenues.

"When [other developers] found out about Cafritz they started calling," said one Sacks board member who did not want her name used for fear that she would "be getting calls from 100 developers."

Ken Hartman, chief of staff for Montgomery County Councilman Howard A. Denis (R-Potomac-Bethesda), who represents the neighborhood, said Denis was unlikely to support any developer's plan "that demolishes this quaint little neighborhood" for a mixed-use project.

But the neighboring parking lot is another matter. County officials said they have narrowed from 13 to three the list of potential developers for the two-acre lot across from a Barnes & Noble store.

The finalists include three residential developers: PN Hoffman Inc. of the District, KSI Services Inc. of Vienna, and Archstone-Smith Trust of Colorado. County officials said they expect to select a developer for the site in May or June. Construction would start at the end of next year.

Modern History

Office and residential developer Lcor Inc. of Berwyn, Pa., is running into impassioned opposition to its plans to tear down the old Comsat Corp. building, a glass and aluminum low-rise on Interstate 270 near Route 121 in Clarksburg. A group of preservationists contend the building, which dates from the 1960s, should be saved as a historic landmark.

Lcor bought the 500,000-square-foot building and the roughly 200 acres of grassy hills and land that surrounds it in 1997. The developer wants to turn it into about 1,500 apartments and townhouses, up to 1 million square feet of offices and about 150,000 square feet of shops and restaurants.

The building had once been home to Comsat's satellite research. Lockheed Martin Corp. bought the satellite company in 2000. Now, the defense giant has a lease on the building that expires in 2007 and uses about half of it for its employees and other subcontractors, according to Lcor executives.

The building is outdated and not usable for "a modern office tenant," according to Mike Smith, a vice president at Lcor. "By any measure of today, it's a white elephant," Smith said. He added that the Clarksburg Master Plan calls for the area to be developed as a mixed-use project.

But two professors at the University of Maryland have urged Montgomery County preservation officials to designate the property historic because it was one of the early works of renowned architect Cesar Pelli and is a landmark of communications technology. "This is the building that brought you 'Live from Tokyo' and transatlantic calls," said Joey Lampl, a senior preservation planner at the Montgomery County Department of Park and Planning. "There are 300 patents associated with this building and Comsat. There's no question in our mind that this building meets historical and scientific significance."

At a meeting Wednesday night -- the third meeting on the matter -- the county's nine-member Historic Preservation Commission recommended, 7 to 2, that the building and the surrounding 30 acres be designated historic. The action, which could effectively bar demolition, would still have to be approved by the Montgomery County Planning Board and the County Council.

Having even part of the property designated as historic would "eviscerate the plan for a mixed-use site," Smith said. "It would take away most of the prime, visible, developable land on the site."

"This has a huge negative impact on our investment," Smith said.

Old Center's New Life

The D.C. Council's Economic Development Committee is scheduled to hold a hearing today and act on an agreement for Houston-based developer Hines Interests LP and Archstone-Smith of Englewood, Colo., to start planning how to turn the 10 acres of the old convention center at Ninth and H streets NW into a development of stores, restaurants, housing, offices and public spaces.

The full council is expected to vote on the deal in May. Construction on the project would start in 2009 and the project would probably be completed in 2011, according to the developer.


Boston Properties Inc., a publicly traded real estate investment trust and major developer in the Washington area, said it expects to start construction later this year on the last piece of empty land in the Reston Town Center. The developer plans to build 300 condominiums, 60,000 square feet of retail and 550,000 square feet of office space on what is now a parking lot.

Developer Westfield Realty of Arlington is selling roughly 2 million square feet of office buildings it owns in Rosslyn and Crystal City, according to Westfield executives. The largest property for sale is the 31-story former Gannett Co. buildings at 1000 and 1100 Wilson Blvd. Gannett left the Rosslyn buildings three years ago, but other tenants took much of the space.

Washington Real Estate Investment Trust paid $45.1 million for the Frederick Crossing Shopping Center, a 294,000-square-foot strip mall in Frederick that has a Kohl's and Best Buy as tenants.

Dana Hedgpeth writes about commercial real estate and economic development. E-mail her at hedgpethd@washpost.com.

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