With help from a World Bank lawyer who has renovated slum housing in Southeast Asia, tenants at McLean Gardens have devised their own $90 million competing development proposal and intend to make the $500,000 deposit for purchase of their 43-acre complex.
William P. McCulloch, a self-described "deal maker" who is on leave from the World Bank, helped tenants put together a development plan that will include cooperative units, condominiums, town houses and duplexes.
It calls for the construction of new buildings on the 10 acres of vacant land at the site in Northwest Washington a few blocks from the National Cathedral.
Tenants have scheduled a press conference for this morning. They plan to release further details about their development proposal, which calls for phased development of the project over a 45-month period.
Tenants may find themselves facing a court battle, however, CBI Fairmac, current owners of the complex, signed a $27 million contract in May with California builder Dwight Mize, who plans to purchase the complex and convert it to condominiums. Fairmac had sent eviction notices to tenants in March, telling them they no longer wanted to keep McLean Gardens as a rental complex.
But in September, Fairmac offered the tenants association a chance to buy the property for $25 million. The offer, which gave tenants 90 days to raise a $500,000 deposit and draw up a contract with Fairmac, came one day before tenants were to appear before the city's Rental Accommodations Office, charging that under city laws governing rental housing they should have been given first right of refusal to purchase the complex. That 90-day period ends Tuesday.
Mize said in an interview earlier this week that because the tenants have come up with a plan that involves other developers, he probably will contest their right to buy the complex in court. Mize contends that by bringing in another developer, the residents association itself is not buying the complex.
McCulloch said the $500,000 is to be deposited today in the Women's National Bank, but a lawyer for the tenants association said details about the deposit will not be announced until today.
McCulloch said the funds were raised from different sources, including the tenants and $150,000 from himself and partners. He said large local builders and some major national builders are "very interested" in the tenants' project, and that they are negotiating with a number of financial institutions, including the First National B ka fnCoacoghi First National Bank of Chicago and the First National Bank of Maryland.
He said he also has had the help of architect Daniel Kelleher and financial advisers in Washington and Baltimore.
Tenants also must draw up a valid contract with Fairmac. About 180 tenants continue to live at McLean Gardens despite Fairmac's attempts to evict them, according to a tenant spokesman. They have presented a draft contract to Fairmac officials and plan to negotiate with them further.
The local Advisory Neighbrhood Commission has passed a resolution supporting the tenants' plan.
McCulloch said he had spent weeks working with a German architectural firm that has built large projects in Germany and Saudi Arabia. "They walked away on the deal Monday night at 6:30," McCulloch said, forcing tenants to reschedule their press conference until they could reassemble their plan, he said.
Mize said he offered to sell 175 units of the complex to tenants two weeks ago for about $24,700 a unit but was turned down.
"No lender will get involved when there are lawsuits," Mize said of the tenants' efforts. "There is no way I will allow another developer to come in. I'm prepared to go through the courts."
McCulloch said Mize's "causing us a lot of trouble. We have to sit here anticipating a lawsuit."