In a Sept. 6 Washington Business article, the name of Robert H. Braunohler, an executive with Louis Dreyfus Property Group, was misspelled. (Published 9/8/04)
George D. Stamoulis, a Greek immigrant and mechanical engineer, held out for years.
He ignored the offers of Akridge, one of the District's biggest developers, which wanted to buy his small parcel of land at the corner of 11th and I streets NW. And he rejected the pleas of broker Tom Rossi of CB Richard Ellis.
Tied up in the land were Stamoulis's own emotional memories of his family getting swindled by land speculators, his mother being forced to amputate wounded soldiers' limbs after the Germans invaded Greece, and the death of his uncle, who owned the land.
But last month, after more than a year of being wooed at Caribou Coffee in Silver Spring, Stamoulis signed a deal. He will lease his 3,600 square feet of land for an undisclosed sum to Louis Dreyfus Property Group, a real estate subsidiary of a French holding company.
The story of how that deal came about and the complicated tales behind the sale of two other pieces of land near the same corner of downtown Washington show a less visible side of the commercial real estate world -- one where developers find themselves involved in long, complex negotiations with individuals who are emotionally attached to plots that are small but critical to multimillion dollar projects.
The plot next door to Stamoulis was the center of a similarly drawn out series of negotiations. It was owned by George Basiliko, the son of Greek immigrants, who turned down numerous offers from potential buyers, until this summer, when he signed a deal to sell his 28,500 square feet site to Louis Dreyfus.
Across 11th Street sits another parcel of land developers have been after for years. The family of Jan Evans -- heir to the well-known Heurich estate which made its name in the brewing business -- recently sold to developer Tishman Speyer, a deal that took some time to negotiate because it involved 20 different families.
Developers say they tried in past years to cut deals with Stamoulis, Basiliko and the Heurich estate, but the hurdles were too significant to be worth the effort. Recently however, MCI Center and new convention center have made this area -- once home mainly to parking lots and pawn shops -- extremely desirable. So developers pushed harder, agreed to bend more and worked patiently through the unique concerns of these landowners.
"It takes the right timing, persistence, understanding what the needs of the seller are, understanding the property and its value. And it takes a buyer who wants it. A lot of people don't have that kind of patience," said Rossi, a senior vice president at CB Richard Ellis.
An Uncle's Legacy
One recent evening, the 55-year-old Stamoulis sat in the same Caribou Coffee shop where he had meet with the vice president of Louis Dreyfus dozens of times to negotiate the deal. As he tried to explain why the negotiations were so drawn out and painful, he reached into his brown leather briefcase and pulled out a dark red Greek passport and a folded, brownish piece of paper. It was his uncle's immigration papers.
In the 1890s, his uncle, the eldest of 13 siblings, left his small village in Greece, a town known for wheat, tobacco and melons, and came to New York.
Inside the passport book were letters written in Greek from his uncle's sister urging him not to forget his roots, and a black and white photo of Stamoulis' great-grandfather, dressed in his military uniform -- a knee-length skirt, medals around his neck, a rifle in his right hand and a heavy parka over his left shoulder.
His uncle came to the District because he had cousins here who were insurance salesman. "I can still remember where he settled here," Stamoulis said. "It was 1408 Montague St. NW."
Stamoulis's uncle bought restaurants, including the Old Heidelberg, a popular German restaurant at 515 11th St. NW. "The money my uncle made from his restaurants, he used to buy real estate," Stamoulis said. His uncle bought the property at 11th and I streets in 1945, according to D.C. land deeds.
Stamoulis' father, a lawyer, came to Washington briefly to help his brother, but returned to Greece during World War II, when the Germans invaded the country. "My father was very, very Greek and very proud of his country," Stamoulis said.
During World War II, his mother was plucked from her medical school class and put on the frontlines of fighting in the war, amputating soldiers' limbs, according to Stamoulis.
"She was like a butcher," Stamoulis said angrily.
Stamoulis was born in 1948 during the Greek War. As a student, he excelled in math and attended an engineering school in London. His uncle, whom he never met, wrote him often. "He used to send me some money and write me to encourage me in my studies," Stamoulis said. "And he always sent money back to Greece. I never asked him for a penny."
When his uncle died in the 1960s, he left his estate -- which was mostly land in the District -- to Stamoulis and his father. His uncle had appointed a lawyer friend to manage his estate. But eventually Stamoulis and his father became upset with the lawyer, who they felt sold property too cheaply to speculators. In 1990, his father insisted Stamoulis move from England to the United States to run what was left of the family's estate.
Stamoulis moved his wife and two daughters to a simple rambler with well-pruned roses lining the front walkway in Silver Spring. Stamoulis said he got work consulting for large energy companies.
He spent his spare time trying to find out what had become of his uncle's land, pouring over tax records and deeds at D.C. offices. He created timelines and maps, tracing who owned the land around the site he still owned at 11th and I streets. Most of the mini-parcels around him were owned by Basiliko, 87, the Greek landowner next door. In fact, Basiliko tried repeatedly to buy Stamoulis' two lots.
"I tried to get that Greek to sell, but he wouldn't," Basiliko said.
Talks Over Coffee
As Stamoulis was trying to explain why he eventually decided to sell, he pulled out a small yellow notebook. He has kept stacks of these notebooks with hand-scribbled notes about every detail of the land.
"Here it is," he said, as he flipped to the page with his first contact with Rossi, the land buyer for CB Richard Ellis. "It was Nov. 1, 2002 at 2:30 p.m. that he left me a message on my machine," Stamoulis said, as he pointed to a page with his notations.
When Stamoulis returned Rossi's call, he told him he wanted to deal directly with the developer, not a middleman. "I wanted to know who was behind the deal," he said. "I've had people buy land from my family and then turn around and flip it in just a few months and make money off of it. I lost three properties that way. I wasn't going to let that happen."
Rossi tried to explain to Stamoulis that that's not how commercial real estate deals work here. But Stamoulis felt it was necessary to protect what his uncle had worked hard to build and to honor his parents' sacrifices.
After eight months Rossi and Louis Dreyfus gave in. In July 2003 Robert H. Braunholer, vice president of development and operation at the Louis Dreyfus real estate subsidiary, and Jeff Sussman, who is president of Louis Dreyfus Property Group and is based in New York, met Stamoulis at the Four Seasons hotel for breakfast.
By that meeting Louis Dreyfus was negotiating to buy the 28,500 square feet that his neighbor Basiliko owned. Braunholer showed Stamoulis the site plans. One plan had a large office building with corner offices sitting on Stamoulis' land. The other had a building that was constructed around his lot.
For months Braunholer courted Stamoulis. He noticed that Stamoulis had seemed uncomfortable at the Four Seasons breakfast, only ordering water. They met one evening at Caribou Coffee because it was close to Stamoulis's home. Braunholer realized that Stamoulis felt more at ease there. Numerous meetings followed, with the two often chatting until the coffee place closed. "I must have had coffee with him 50 times over a year and a half," Braunholer said, laughing.
"He was suspicious that we were speculators and that we were just trying to steal his land and flip it," Braunholer said. "It took him a long time to trust us."
Braunholer described to Stamoulis the firm's work, including its development of the new Securities and Exchange Commission headquarters near Union Station. He also spent hours listening to Stamoulis, an engineer, describe his life, his family and his work developing more efficient ways to burn fossil fuel for power.
Stamoulis started to feel comfortable with Braunholer. "He was very straightforward," Stamoulis said. "They didn't try to manipulate me."
But even when Stamoulis decided he wanted to do business with Louis Dreyfus, there were minor snags. Stamoulis had recently leased a row house on the lot to a buffalo wing and billiards establishment. He was able to get out of that deal because the restaurant failed to meet certain deadlines.
The other snag was that Stamoulis remained uncomfortable totally parting with the land. So the two sides worked out a compromise: Stamoulis would lease the land for 98 years. Louis Dreyfus has an option to buy the land after that.
The deal that was signed on Aug. 1 was less clear cut than what Braunholer wanted: "It's not what we prefer, but it's the only way he'd deal with us so we ended up accepting that."
Neither Louis Dreyfus or Stamoulis would say how much he will receive. A source familiar with the deal estimates that Stamoulis will get approximately $100,000 a year in rent or about $9.8 million over the life of the lease.
Construction is to start this fall on a 380,000 square foot office building, which is already half leased to the national tax practice of Ernst & Young. It is scheduled to be completed by mid-2007.
Braunholer said it was a time consuming endeavor, but "we really had to have that corner site of his. Otherwise it would greatly reduce the impact of the building we could build."
He added: "We finally won him over through a combination of timing, charm and money."