A funny thing happened to Ben H. Swig on the way to the Willard Hotel.
Swig is chairman of Fairmont Hotels of San Francisco, the company chosen recently by the Pennsylvania Avenue Development Corp. to reopen and run the Willard in partnership with Florida developer Stuart Golding.
But Swig is also a partner in the real estate group that used to own the Willard, it has been learned, and Swig and his partners last year collected $4.55 million in a lawsuit that forced the PADC to buy the Willard.
How Swig sold the Willard to the PADC, then got it back is a story that even people at the PADC don't understand.
And it's a story the PADC board had not heard last month when it picked Golding and Fairmont from a group of developers bidding for the right to reopen the vacant Pennsylvania Avenue landmark.
Swig's former interest in the Willard was mentioned at one PADC board meeting, recalls Rita Abraham, the agency's public information director.
But PADC staff members apparently didn't know that Swig was one of the sellers of the Willard, because his name does not appear on records of the Willard, which have been passed through a series of government agencies.
The records in a U.S. Court of Claims case involving the Willard identify the owners as Charles B. Benenson, Robert H. Arnow and the Benenson Capital Co. of New York.
Swig's son, Richard, chief executive of the Fairmont Hotels, said in a telephone interview Monday he didn't know details of his father's connection with the Willard. "I'm in the hotel business," Richard Swig said, adding that he didn't know if his father sold his interest in the Willard to his partners or still was a part owner when the hotel was sold to PADC.
Robert Arnow said he "didn't recall" what Swig's involvement was with the Willard. A similar answer came from Alan Weiler, the Weiler in the New York real estate firm of Swig, Arnow and Weiler, which is identified in Washington Post stories from a decade ago as a partner in the Willard.
Swig's ownership was confirmed yesterday by Benenson, "of course he was," Benenson answered when asked if Swig was a partner in the Willard at the time it was sold.
Swig, who is in his 80s, could not be reached for comment.
Golding said he did not know of Swig's previous connection with the Willard. He said he recruited Swig because they were old acquaintances, and he wanted a hotel operator of the "Fairmont caliber" to manage the project.
Golding said he assumed that Swig's role had nothing to do with the selection of his team to redevelop the Willard.
Swig's ownership of the Willard is interesting because of the way in which the hotel was acquired by the PADC and because of the way PADC plans to transfer the hotel to the new developers.
The developers will not be expected to pay the full price paid by PADC for the hotel, said Peter Meszoly, assistant director and legal counsel to the PADC.
PADC and the developers will negotiate a compensation agreement, one of several matters that are being worked out in talks now going on between the two.
The developers, Meszoly said, may get a long-term lease on the building or may buy it at a discount, or may agree to share operating profits with the PADC, or make some similar arrangement.
But the prospectus soliciting proposals for rebuilding the Willard makes clear that PADC is not expecting the developers to pay the full price of the building. That's because restoration costs are expected to be so high that it might not be economically feasible to rebuild and reopen the hotel, which is little more than a shell of a building.
The PADC bought the Willard through an unusual legal maneuver called "inverse condemnation."
The usual kind of condemnation involves the government's use of the right of eminent domain to obtain a property needed for some public project, like the redevelopment of Pennsylvania Avenue. The government condemns the property and a court decides a fair and equitable price to be paid to the owners.
In the case of the Willard, the owners struck first, filing a lawsuit in 1975 in the U.S. Court of Claims, charging that the government had already taken their property and asking to be paid $8 million.
The lawsuit claimed a series of federal agencies -- including the General Services Administration and the Pennsylvania Avenue planning agency, which preceded the PADC -- had in effect, taken the property away from them.
Government agencies began talking about tearing down the Willard to build a giant park in the 1960s, then changed their minds and went to court to stop the owners from tearing it down themselves.
The owners lawsuit said the various government actions had deprived them of their right to the property, and tried to force the government to pay.
PADC, which inherited the case from the other federal agencies involved, settled with the owner last January, agreeing to pay $4.55 million for the hotel. Meszoly said that by the time the case got to him, there was no mention of Swig's partnership.
PADC officials acted a little embarassed when they were asked about Swig's dual role in the decline and rise of the Willard.
Why Swig would sell the property then join the competition to get it back -- taking the risk of losing to a rival is a question they can't answer.
One explanation is that there was money to be made selling the Willard to the government and there is money to be made taking over the Willard from the government and reopening it, but there's no profit in keeping the hotel and restoring it as a private venture.
Across the street from The Willard, the National Press Club is making peace with Quadrangle Development Corp. and Marriott Corp., the rivals who beat the Press Club in competition for the right to redevelop that block.
No agreement has been reached but the two sides are talking about including a new press building in the office and hotel project planned by Quadrangle and Marriott.