Yeshiva Facility Deals Costly for Montgomery

Weast proposed shifting Yeshiva to the former Montgomery Hills Junior High School in Silver Spring, which, like Belt, was a former public school under county control and in poor condition.

Yeshiva said that it deserved to be moved into a renovated school because it had begun renovating Belt. In March 2002, the school system hired an architectural firm to design the renovation of Montgomery Hills.

Cohen updated Yeshiva parents that month about the need to leave Belt. "[T]he County will present us with a building of the same caliber as our current location, renovated to our specifications," he wrote, noting approvingly that the Montgomery Hills facility was closer to a Jewish community. "The terms we negotiated are very advantageous," he added, with "very" in bold type.

In late November 2002, a contracting firm employed by the school board drew up a $10.2 million budget for the renovation work. But school officials and Yeshiva representatives soon agreed that the school system would not employ independent contractors. According to notes dated Dec. 19 and taken by a county real estate analyst at a meeting attended by Pasternak and other county officials: "Yeshiva is now going to do the work."

The price was slightly lower than the contracting firm's estimate: $9.8 million.

Yeshiva's leaders were on familiar ground in undertaking a construction project. Cohen and Berman, by this time both members of the Yeshiva board, are partners in BECO Management Inc., a commercial real estate firm in Rockville that they founded with other partners in 1986. BECO managed the school renovation work, the financial records show.

Cohen is BECO's president and has been president of the Yeshiva board since 2001, when he took over from Abramoff.

Contract Questioned

On March 28, 2003, school superintendent Weast, then-school board president Patricia B. O'Neill and Cohen signed the "stipulated sum" contract for $9.8 million, which was later increased to nearly $9.9 million. The no-bid agreement waived the county's right to inspect the work, apart from standard inspections required for building and occupancy permits.

Associate County Attorney Eileen Basaman sent an e-mail to Pasternak dated five days later. "The Construction Contract frightens me. A lot," she wrote. "The County would never execute this contract for itself," she added, in part because "we give up our rights to inspect the project."

Hawes, the school system's director of facilities management, said that such inspections would have been pointless, because the contract gave Yeshiva the right to modify the work. He also defended the lack of competitive bidding. "We were just looking for a deal that would ensure we had Belt back by July 1 of the following year. We couldn't hire anyone else to do that," he said.

The deal with Yeshiva, Hawes said, allowed the school system to eliminate the risks of cost overruns and delays.

The $9.9 million construction contract was intended to fund improvements at Montgomery Hills to match Yeshiva's work at Belt and was simultaneously understood to represent "the agreed upon value" of Yeshiva's Belt renovations.