Children's Hospital has threatened to take its former site in the heart of Shaw away from developer Jeffrey N. Cohen and two partners because the developers are overdue on $500,000 in mortgage payments.
The hospital filed a formal notice of foreclosure on the property this week, and a foreclosure sale is scheduled for Feb. 11.
Architect Theodore F. Mariani, one of Cohen's partners, said the hospital would be paid today. If the payment is made, the foreclosure sale would be canceled, hospital attorney Richard Cornelius said yesterday.
Cornelius said the foreclosure notice was filed because the developers had failed to make payments totaling $500,000 that should have come in monthly installments due in November, December and January. Mariani agreed on the amount owed the hospital, but said the $500,000 had not been due until the beginning of January.
Cohen and his partners bought the former Children's site at 13th and V streets NW and five surrounding parcels from the hospital two years ago in order to build a new national rehabilitation hospital that would treat paralyzed patients who needed therapy.
Both city and federal officials objected to the plan, and late last year Cohen announced he had reached an agreement to build the rehabilitation hospital on the campus of the Washington Hospital Center at North Capitol Street and Michigan Avenue NW. City health officials are considering whether to allow that move.
Neither the developers nor the hospital would disclose the total purchase price of the land in Shaw, but both said $4.4 million was originally scheduled to be paid to the hospital in June 1982.
When that deadline approached, the partnership asked for an extension, according to Cornelius and Robert Jeffers, an attorney for Cohen.
Cornelius said the loan deadline was extended several times, and both sides agree that another extension has been under discussion since last November. Jeffers said the partnership did not want to pay the full $4.4 million until the partners knew exactly what they would build on the site.
Since his decision to move the rehabilitation hospital elsewhere, Cohen has been working with two community groups to plan the redevelopment of the former Children's Hospital site in Shaw.
Jeffers said the partnership believed that an agreement had been reached on a new payment deadline, and that he was surprised to see the foreclosure notice published. But Cornelius said no agreement was to go into effect until the overdue funds were paid.
"All we are asking is for them to get out of default," Cornelius said.
Cohen, a well-known local developer, also owns two office buildings on Connecticut Avenue NW, the Parkside Hotel, and several parcels on 14th Street between H and I. He is building a subsidized housing project, called Franklin Commons, in Northeast Washington near Catholic University.