When plans for a $40 million shopping and residential development in the heart of Georgetown were announced a few months back by Western Development real estate man asked "Western who?"
Others recognised the name of Western Development's President Herbert s. Miller and wondered how he'd pulled off such a deal.
As project director for Shannon and Luchs, the District of Columbia's biggest real estate office, Miller had earned most of the credit for creating the Mazza Gallerie.
But since going out on his own nearly five year ago, Miller had built nothing bigger than a neighborhood shopping center or an office building.
The Georgetown project put Western Development - Miller and partners Gerald L. Dillon and Richard Kramer - on the front burner of Washington's superheated real estate market.
Called Georgetown Park, the massive development between the C & O Canal and M Street NW, west of Wisconsin Avenue is a joint venture of Western and the Donhoe interests, one of the old-line giants of Washington real estate. Donohoe Construction will start building the project this spring, on a sprawling site purchased from O. Roy Chalk, former owner of D.C. Transit.
Just getting Chalk's name on a sales contract is considered a coup by many real estate people, who regard Chalk as one of the most difficult men to deal with in Washington. Other developers had tried to buy the site, but had given up after Chalk refused phone calls, broke appointments and ignored offers from heavyweight local developers.
Miller admits that knowing an attorney who was a long-time business associate and friend of Chalk helped, but he says the secret of securing the multimillion-dollar site was persistence and patience.
"It takes so much time to get anything done these days," Miller said in an interview last week in his office, which happens to overlock the Wisconsin and Mintersection. "A lot of these guys (other developers) don't want to be bothered.
Miller, Dillon and Kramer can afford the time, they admit, because they're newcomers to Washington development, and because, their competitors suggest, they're hungry enough to sweat over deals that other developers figure aren't worth the hassle.
On a small shopping center Western is now building in Great Falls, Va.,which includes a Safeway supermarket, a People's Drug Store and a few shops, "it will be four years from conception to completion," Miller admitted.
To get approval of that project - in a neighborhood at least as demanding as Georgetown - Miller met repeatedly with citizen's gorups to wrangle over details. The citizens dictated the kind of brick used in the building, the shape of the planters in the parking lot and even the carved wood signs.
Said another developer, "Four years for a project that size? My time is worth more than that."
Dillon said longer lead times are becoming routine in the building business. "We spend more time doing the pre-development that we do on construction." The Washington area is the pace setter inthat costly trend, added Dillon, who called this "the worst place in the country to get anything built. Compared to Washington, everywhere else is easy."
Dillon was senior vice president in charge of construction for the Taubman Company, a Detroit firm that is the nation's largest developer, before starting his own partnership in Michigan in 1973, then moving form Detroit to the Watergate to link up with Miller in 1976.
Kramer, the third principal, is a Wharton School of Finance graduate who worked as a management and investment consultant and managed his family real estate holdings - more than 1,000 Washington acres - before joining Western Development.
Miller incorporated Western Development in 1967, then shelved the corporation about the time he went to work for Shannon and Luchs. Building a reputation as an idea man not overly concerned with details, Miller brokered what is perhaps the most glamorous menage a troisin Washington real estate.
He matched Mrs. Olga Mazza, a widow sitting on a multimillion-dollar site at the intersection of Western and Wisconsin Avenues with a real estate subsidiary of Exxon and presented the pair to Neiman Marcus, the ultimate upscale department store.
In the process of developing the Mazza Gallerie, Miller got to know every property owner in the Friendship Heights business district as well as most of the business interested in moving there. After leaving Shannon and Luchs in 1973 and spending a year-and-a-half as eastern regional director for Taubman, Miller used that background to develop the Jenifer One building just south of Mazza Gallerie on Wisconsin Avenue, with partner David Evans.
Real estate people familiar with Jenifer One - which houses the Jenifer Twin theater, Herman's sporting goods a pair of restaurants and a Riggs National Bank office - say Miller made little money on the $3 million project. "He gave away the family jewels to get it off the ground. But he got it off the ground." said one.
Accumulating capital from their work for others, the Western Development partners have built equity in their later projects. Miller said the usual real estate financial deals have been used - limited partnerships and syndicates with financing from conventional bank and insurance company sources. The experience of Western Development staff members and partners in working for or with major developers has given the firm access to and credibility with lenders.
To get capital for the Georgetown project and others, a half interest in the Great Falls Shopping Center was sold to Connecticut General Life Insurance Co. for $1 million, Miller said. One major property the company hoped to develop, however, appears headed for a rival firm that made a an offer involving more cash than Western could come up with.
Having proven with the Jenifer project that he could do a decent-sized deal on his own, Miller began building a business - the staff now includes six professionals plus the three partners - that other developers say will probably became a major factor in the Washington market.
Western Development now has a nine-story office building under construction at 19th and K Streets NW, that is nearly 90 percent leased.
In the Dale City area, along Interstate 95 South of Washington, four related projects are in various stages of development. The 141-acre Northern Virginia Industrial Center was started last year. Four industrial sites have been sold in a 66-acre industrial park that will be linked to a 40-acre office park and a 31-acre shopping center.
The Woodbridge Mall, a one-million square foot shopping center to be developed as a joint venture with the Ernest W. Hahn Co. Inc., a major shopping center builder, is scheduled for construction in 1981. Another stores will be The Hecht Co., Woodward and Lothrop, Sears Roebuck and J.C. penney. An adjacent 100 acres is reserved for related facilities.
The Green Valley Center, a 39-acre tract also linked to the Woodbridge Mall property, is owned by Miller and Kramer as partners in Green Valley Associates, and is planned as a residential-retail-office development.
Construction is supposed to start this summer on Greenbelt Shopping Center, a 23-acre retail project at the intersection of the Baltimore-Washington Parkway, the Capital Beltway and Glen Dale Road in Prince Georges County.Other developers had given up on that site also, Dillon noted, but Western won approval of local officials by offering to build $750,000
The firm's latest project is the Shady Grove shopping center annouced last week for the Shady Grove Music Fair site. The music fair will close after this summer.
Western Development's most ambitious project, however, is Georgetown park, a $40 million undertaking scheduled to start construction this summer. Miller said the project will carry the heaviest mortgage per square foot in Washington.
Roughly a block square, Georgetown Park will occupy the south side of M Street west of Wisconsin Avenue. Four restaurants on the block -Rive Gauche, City Tavern, Publick House and Clyde's - will stay, but the other buildings will be torn down except except for their facades, which remain to retain the character of M Street.
Behind those familiar fronts, behind, will be a multi-level shopping arcade. The lowest level - two stories below M Street - will open onto the tow path of the C&O Canal, and will house food shops and restaurants. The upper levels will be retailers, with a small, high fashion Garfinckle's store and a centralized Britches heading the list.
Beneath the project - well below the bottom of the canal - will be three levels of parking, making the construction job one of the most difficult ever in the city.
Atop the retail complex, on a concrete deck, will be an apartment building and a cluster of luxury townhouses, not visible from M Street.