A D.C. Superior Court judge yesterday cleared the way for a partnership of two foreign-based corporations to purchase the massive Columbia Plaza apartment complex in Foggy Bottom.
D.C. Superior Court Judge William E. Stewart Jr. ruled that the project's tenants, who also tried to buy the 800-unit complex, did not reach a sales agreement with the owners within the time allotted by city law.
The two foreign corporations are the Daon Corp., based in Vancouver, and the Cadillac Fairview Corp., with headquarters in Toronto. The tenants had been vying with the partership form months over who had the right to buy the $50 million complex and convert it to condominiums. Both sides eventually sued the owners to try to determine who had that right.
Columbia Plaza comprised of five buildings between Virginia Avenue and E and 23d Streets NW, currently is owned by a limited partnership whose general partners are parking magnate Dominic F. Antonelli Jr., investor Edward Mernone, and surgeon and real estate entrepreneur Laszlo N. Tauber.
Daon-Cadillac still faces an obstacle before it can convert the buildings. On Dec. 21, the corporation requested an exemption from the current moratorium on conversions in the District.
Last week, the city denied the exemption request, taking note of the then-upcoming litigation with the tenants and noting that the company had not spent enough money to qualify for an exemption under the law.
More than 200 Columbia Plaza tenants had written the city condominium regulation office asking the city not to grant an exemption.
One of the ways in which a developer can be excluded from the moratorium and proceed with conversion is to have the consent of the tenants.
"Our next step is, when the tenants are ready, to sit down with them and really make an attempt to work out an amicable resolution," said Richard M. Aronoff, an attorney for Daon-Cadillac Fairview. "We'd like to do the conversion together with the tenant association."
An attorney for the tenants said yesterday that tenants would meet to discuss the situation.
Daon-Cadillac Fairview signed a contract with the owners to buy the buildings last March under an arrangement in which the owners will retain the land and the commercial and parking spaces. Doan-Cadillac Fairview will lease the land for about $600,000 a year, according to court documents.
But under city law, the owners were required to first offer the building for sale to the tenants association. The tenants delivered a final, revised proposal for purchase of the complex on the deadline, Sept. 10, but negotiations over the next two days failed to result in an agreement on the sale between the tenants and the owners, according to a transcript of the judge's order yesterday.
The owners then continued to negotiate with tenants, resulting in a contract proposal dated Oct. 10.
Tenants contended that the proposal they made on Sept. 10 should have been accepted by the owners because it was similar to the contract the owners had signed with Daon-Cadillac Fairview. Failure to accept it was "bad faith," they contended.
But the judge ruled yesterday that the owners had complied with city law and that tenants had failed to show an absence of "good faith."