The Pennsylvania Avenue Development Corporation yesterday rejected the request of Willard Hotel developer Stuart S. Golding for a six-month delay of the project because of high interest rates. Instead it told him to start construction on his project no later than next April.
The corporation, created by Congress to supervise the rebuilding of the ceremonial route betwen the White House and the Capitol, also approved another developer's proposal for a $120 million office complex on the west side of the FBI headquarters at 10th Street NW.
In both cases the corporation's directors made strong statements that they do not expect tight money, rampant inflation or the highest financing costs in history to thwart progress on what they condsider to be the most exclusive 110 acres of real estate in America.
But neither group of developers could guarantee that they would begin building on schedule if 18 to 20 percent interest rates are still prevailing this time next year.
"It's very difficult, I'd like to avoid answering that question," said David W. Evans, who along with developer Richard S. Cohen has nearly completed purchasing the land on the block west of the FBI building for their 13-story project.
The federal corporation will have a tougher time forcing Evans and Cohen to begin construction by a certain date because the government does not own the property.
However, in the case of the Willard, the federal agency spent $7 million acquiring the property and then selected a developer from nine competing groups.
The action on the Willard followed a 50-minute closed-door meeting of the corporation's directors. When the session was opened, the directors approved a resolution requiring Golding to sign a 99-year lease for the Willard site by April 22--or lose his right to develop it. The hotel, at Pennsylvania Avenue and 14th Street NW, is considered to be a key part of the redevelopment of the avenue and the old downtown east of 15th Street NW.
Under the lease, the federal agency would have six months to clear the site next to the Willard--where the hotel would be expanded--and turn it over to Goldberg. The Florida developer would then have another six months to make final financing arrangements and then would have to begin construction by April 22, 1981.
To make his point that he should be given more time because interest rates are so high, Golding interrupted a speaker at one point to announce, "I've just been told that the prime rate has gone to 20 percent while we have been talking."
Earlier, Golding had pulled four bottles of pills for a heart condition from his pocket, lined them up on the podium and said: "If you think this is an easy project. . ."
To rebut Golding the corporation staff called on an outside lawyer, R. Robert Linowes, who had helped negotiate the complicated lease for the Willard property. Linowes told the directors that under the original terms been required to start building six months after the lease was signed. At Golding's request, Linowes said, one additional six-month period was added to give him time to arrange his financing.
Golding's request for a second six-month delay would have pushed the deadline for starting construction to October 1981.
Because of other delays, including a lawsuit by rival developer Oliver T. Carr Jr. and lengthy negotiations with the Hotel Washington over an alley closing, the Willard restoration is nearly a year behind schedule now.
Orginal plans called for construction to begin by last January.