D.C. Housing Director Robert L. Moore has threatened to take away from Bethesda builder Nathan Landown development rights to a $30 million portion of Metro Center if Landow does not find additional minority partners.
Landow said he probably will recruit several new minority partners by the end of the week and give them equity interest totalling 10 percent without requiring cash investment or services. "I hope to sell [the interest for $400,000]," he said, "but at the present time there are no takers."
Other minority partners, D.C. bond lawyers James L. Hudson, Willie Leftwich and Chester Davenport, already hold a 15 percent interest in the project.
Landow would not disclose the names of the potential investor, but Advisory Neighborhood Commission member Edward H. Moore said he has discussed with Landow taking a free interest in the project. "I'm certainly a minority and I certainly don't have any money," said Rev. Moore, the head of the Life Church of Good Hope.
The housing director, Robert Moore, said yesterday that he does not expect Landow the give away the equity interest without cash or servicies in return. "There is no compulsion, I think, for him to go out and give somebody equity for no cash," said Moore, "If he does that, it's on his own, and there is a clear alternative to that."
The housing director said that there are "minorities in the community who can get cash . . . and we're certainly willing to help him [Landow] advertise in the newspapers, radio and trade journals" to find minority investors.
Taking away development rights for noncompliance with minority partnership guideline would be unprecedented in the city's history and indicative of a new toughness by Mayor Marion Barry's administration to use all of city's muscle to force the mostly white development community to take on minority partners.
In an interview, the housing director said that his deputy for commercial development, James E. Kerr, sent a letter to Landow on March 6 warning Landow that he had not kept his commitment to grant "a minimum of 25 percent minority equity ownership with a maximum of 40 percent."
In the letter, Kerr reminded Landow that "your development team must meet at least the minimum requirement of 25 percent minority. equity participation" and that "evidence of this participation . . . must be submitted prior" to final approval being given for the Metro Center project.
The Metro Center project, located at 12th and G. streets NW, represents one of the most ambitious redevelopment projects east of 15th Street. The land for the project will be sold to the developers by the city's Redevelopment Land Agency.
The agency and the federally-owned Pennsylvania Avenue Development Corp. control more than $1 billion worth of development projects in the center city. Both agencies have set guidelines for ownership participation by minority partners. The corporation set a goal of 5-to-15 percent minority ownership of each project and the agency a minimum goal of 25 percent.
To blacks and other minorities who represent 70 percent of the city's population and who control city government, "equity" for minorities has become a rallying point. Owning "a piece of the rock" is the goal of a new generation of black entrepeneurs.
How this goal is put into the practice of government policy has been the source of struggle in Washington. Some developers complained last fall that they were being expected to give up multimillion dollar ownership interests in their projects to minority partners without receiving investment cash or services in return.
After the project was awarded to him in late 1978, Landow did give a 15 percent equity interest to D.C. bond lawyers Hudson, Leftwich and Davenport. The lawyers, all of whom are black, made no cash investment.
However, Hudson contends that he and his partners' investment was made in the form of services: the preparation of an affirmative action plan for the project and its presentation to the RLA board. Landow maintains that he gave away this 15 percen interest "for nothing."
In this latest row, Landow says that he has been holding back the additional 10 percent equity in hopes of attracting minority partners willing to put up cash.
As it is, Landow said, "We are in the process of alocating the other 10 percent of minorities. The financial arrangement probably will involve no cash down from the new partners with their interest paid for [by a note] to be paid [back] out of cash flow of the project if and when it is available."
Landow, who has estimated his net worth at nearly $30 million, is the chief fundraiser in Maryland for President Carter's reelection campaign. A flamboyant and sometimes controversial figure, Landow's apartment and condominium buildings in suburban Maryland and the city house a number of high-ranking Democratic officials, including Hamilton Jordon, the president's chief of staff.
Mr. Moore, 52, pastor of the Life Church of Good Hope, has been called the 'outlaw priest" because his store-front ministry caters largely to drug and alcohol-addicted derelicts of the center city.
Aside from his ANC duties, Rev. Moore made an abortive bid for the City Council in 1976 onty to quit the race when dozens of the names on his candidacy petition were challenged as forgeries.
In an interview, Mr. Moore said that if he becomes a partner in the Landow project, he expects his interest to the financed by Landow. "I think the [developer] should put forth the money. To get a minority partner, you're dealing with people who don't have the money and so it's almost incumbent upon those in a [strong financial] position to help those who are not."