Judge dismisses lawsuit, rules Marriott can build D.C. convention center hotel

By Lisa Rein
Washington Post Staff Writer
Tuesday, March 30, 2010; 11:51 PM

After a court ruling Monday night, D.C. Attorney General Peter J. Nickles said Tuesday that he expects the city to break ground on a convention center hotel in late May or early June.

The order by D.C. Superior Court Judge Natalia Combs Greene dismissed a lawsuit that had threatened the $537 million project.

Wardman Investor, an entity controlled by JBG Companies, alleged favoritism in the bidding process, saying the city acted illegally by negotiating exclusively with Bethesda-based Marriott International to build a 14-story Marriott Marquis across the street from the Walter E. Washington Convention Center. But the judge, in granting Marriott's motion for partial summary judgment and motion to dismiss, said the D.C. Council had the authority to exempt the project from city procurement laws.

The dismissal seemed unexpected, coming hours after Nickles announced Monday that the litigation, with countersuits by the city, the Washington Convention and Sports Authority, and Marriott, had been put on hold for three weeks while the involved parties negotiated a settlement.

The judge scheduled a status hearing for April 23. It was unclear Tuesday whether JBG will appeal the ruling. JBG managing partner Ben Jacobs was out of town and could not be reached for comment. Marriott spokeswoman Stephanie Hampton declined to comment.

Nickles said that even if JBG appeals, the hotel will break ground. "I feel confident our investors now have confidence their investment [in the hotel] will be protected."

The District's 11-year quest for a high-end hotel to draw convention visitors seemed to be a go last fall after the city agreed to finance the project with $206 million and give the development team a 99-year ground lease on city-owned land. But then Wardman filed suit, halting the groundbreaking and threatening the private financing for the deal.

What's widely thought to be behind the suit was Jacobs's dispute with Marriott over another Marriott in Woodley Park. JBG bought the Wardman Park Marriott hotel with another company in 2005 and planned to convert hundreds of rooms to condominiums. Jacobs said in January that with the hotel market flat, competition from a convention center hotel would threaten the Wardman.

The judge's ruling did not affect the countersuits against Wardman, including a claim by Marriott alleging that Wardman's lawsuit was part of an "extortionate plan" to stop construction of the convention center hotel and force Marriott to renegotiate the Wardman Park's management agreement.

Nickles said Tuesday that the city "might be disposed" to dismiss its suit if JBG and the hotel come to a separate settlement.

Nickles said Mayor Adrian M. Fenty (D) asked him three weeks ago to get the parties to discuss a settlement. "The District has played the appropriate role as facilitator," he said.

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