New York firm Angelo Gordon wins bid for Shops at Georgetown Park
Thursday, July 1, 2010
The feud over the ownership of the Shops at Georgetown Park has ended, and neither of two prominent local developers, Herbert S. Miller and Anthony Lanier, came away with the retail center.
Angelo, Gordon & Co., a New York private equity fund, won control of the landmark M Street property when it received approval from a federal bankruptcy court Tuesday to purchase a loan on the mall for $61 million.
The seller, Capmark Financial Group, was Miller's financial backer in purchasing the mall for $84 million in 2006, but the firm filed for bankruptcy protection last year and Miller's Western Development defaulted on the loan in March 2010.
Miller's financial troubles stemmed in part from his inability to lease space in the mall, which currently sits half empty. The developer attributed the lack of interest to his legal dispute with Lanier, president of EastBanc, who claimed that Miller illegally excluded him from a deal to purchase the property.
When the loans on the mall went to auction on June 25, EastBanc teamed with Chevy Chase-based JBG Cos. to put up $60.25 million to purchase the loans. Vornado/Charles E. Smith, based in Arlington, bid $60.75 million.
EastBanc and JBG Cos. filed protests claiming Angelo Gordon's bid was based on credit and reimbursements that should not be counted as cash. Angelo Gordon and EastBanc declined to comment on Wednesday.
Miller, chairman of Western Development, said he will be retained by Angelo Gordon as a developer on a fee basis, allowing him to drive improvements the enclosed brick mall that he first built in 1981 before selling it. He said he did not understand Lanier's persistence in creating legal blockades.
"We've offered them to be our partner many times, and they've never accepted," Miller said. "It's just smoke -- that's all they've got. And with enough money and lawyers you can tie things up and that's what they did, and it hurt us. But the smoke doesn't last."
Miller said he is still waiting for the D.C. Superior Court to resolve lawsuits between Western and EastBanc but that he is hoping to begin leasing space and planning the property's redevelopment in earnest, even though it will not be as the property's owner.
"It's just a question of time now -- hopefully," he said.
D.C. Council member Jack Evans (D-Ward 2), a close friend to both men, said Wednesday he tried to get the two to reconcile, but the dispute had become larger than the 315,000-square-foot property.
"Everyone in the neighborhood that I've spoken to at least wishes it would be resolved," Evans said. "To have two very upstanding citizens of Georgetown in such a tussle has really been unfortunate."