Washington developer Jeffrey N. Cohen's Shaw development partnership filed for protection under bankruptcy laws earlier this week, a blow to the redevelopment of a neighborhood that has never recovered from the riots of 1968.
The filing follows a 14-year effort by Cohen, a close friend and business partner of Mayor Marion Barry, to rebuild the neighborhood with a $250 million development called Jackson Plaza. Although the partnership will continue to exist for now, its bankruptcy court filing makes it unlikely that it will be able to pursue its ambitious goals.
Among those owed money by the Shaw Development Partnership are four banks that loaned $3.4 million; more than 20 unsecured creditors, who have claims of $2.8 million; the District government, to which Cohen owes more than $11 million; more than 30 investors, who staked up to $150,000 each on Cohen's plans; Cohen himself, whose house has been foreclosed on; and the Shaw residents.
Cohen blamed disagreements within the Shaw community for his failure, and they surfaced again yesterday.
Ronald Drake, chairman of Shaw Coalition Redevelopment Corp., the group that was his business partner, called on city officials yesterday "to do what they have now refused to do: meet with the SCRC board as soon as possible to begin plans to give back to the community what it is entitled to: a revitalized U Street corridor."
But Jeff Koenreich, interim chairman of Cardozo Shaw Neighborhood Association, said, "Drake doesn't live in Shaw. The majority of residents would feel it's time for SCRC to also go. They've been negligent in the representation of our interests. It's time for a new set of players."
Cohen said in a written statement that he regrets that he could not revive the U Street corridor. "We hope that the next mayor and the newly elected City Council will place this neighborhood and its needs high on the agenda, and that they will dedicate their resources to seeing that these needs are fully met."
Two other Cohen partnerships filed for bankruptcy protection earlier this summer. Cohen's Gateway Associates Limited Partnership had planned two office and commercial buildings at Georgia and Eastern avenues at the city's northern point. His Manhattan Laundry Limited Partnership renovated his office building on Florida Avenue NW.
A Cohen-led renovation of the historic Lincoln Theatre on U Street continues.
Cohen began assembling land in the Shaw area in 1976, but by 1985 was nearing foreclosure when he was unable to obtain construction financing. He was saved by an agreement in which the District government became both his partner and one of his lenders.
An early supporter and fund-raiser for Barry, since 1980 Cohen has been a godfather to the mayor's son, and the two men bought property together on Nantucket, Mass.
Despite support from the city -- which has not collected interest payments from Cohen for two years on the $11 million debt or declared him in default -- the ambitious project stalled. Cohen blamed his partners in the community for delays; they blamed him.
This summer Cohen hoped to forestall bankruptcy by obtaining a $150 million lease from the Barry administration for an office building he hoped to build on one of the Shaw sites.
As the mayor's trial on cocaine and perjury charges continued, Cohen said his lease proposal was hurt, not helped, by his friendship with the mayor. He said Barry's deputy mayors no longer returned his telephone calls. In a letter to City Administrator Carol B. Thompson, Cohen called her silence "inexcusable."
Investors in Shaw Development included many well-known persons: the wife and son of Delano E. Lewis, president of Chesapeake & Potomac Telephone Cos.; lawyer and city lobbyist David W. Wilmot; Charles H. Epps Jr., dean of Howard University Medical School; Dominic S. Antonelli, developer and parking lot owner; and businessman E. Robert Wallach, longtime friend of former attorney general Edwin Meese III.
The largest unsecured creditors of Shaw Development are National Cooperative Bank, $1.5 million; Vista Federal Savings Bank, $1 million; United Savings Bank, $525,000; and Independence Federal Savings, $344,000.
Staff researcher Peter Stokes contributed to this report.