A year after Arlington County officials approved a daring plan by 22 homeowners to sell their houses in a package for tremendous profits, the deal has dissolved into litigation and the embittered homeowners have been caught in a financial vise.
Homeowners in Arlington's Courtlands neighborhood, capitalizing on rapid development generated by the Court House Metro station two blocks away, had agreed to sell their 50-year-old houses to a Bethesda developer for prices estimated at two to three times the houses' assessed value.
By combining their properties in a 5.2-acre package big enough for dense development, the homeowners seemed assured of receiving an $8.9 million payment from a developer with ambitious ideas.
But the developer, Courchevel Corp., which planned to build a $100 million complex consisting of a 594-unit rental apartment building with adjacent theaters, restaurants and supermarkets, failed to go to settlement last Dec. 31, as it had agreed.
The deal fell through, according to attorneys for Courchevel, when a partner it had hoped to enlist in a joint venture got cold feet because of possible shifts in federal tax laws. The Courtlands homeowners have now filed suit in Arlington County Circuit Court seeking the $250,000 deposited by Courchevel as earnest money.
According to their lawyers, many of the homeowners had bought new houses late last year, in several cases with the assistance of loans, on the assumption that they would be going to settlement with Courchevel Dec. 31.
When Courchevel defaulted, the lawyers said, some of the homeowners were left in severe financial straits, losing down payments and forced to cancel leases.
"Many of us who were trying to buy new homes are now saddled with financial obligations we can't make," said Thomas A. Clary III, a Courtlands homeowner.
Courchevel President Thomas F. Herr could not be reached for comment. But his lawyers said they still hoped to reach an agreement with the homeowners.
"Our perspective is that this is a bunch of people who decided to become real estate dealers and speculators, benefited from dramatic inflation of the value of their homes and assumed a risk," said Allen S. Rugg, a lawyer for Herr.
In the meantime, the homeowners have signed a contract to sell their houses to another developer, Nordheimer Brothers, an Arlington-based firm that owns other county residences as well as the Georgetown Hotel on P Street NW in the District.
The homeowners are further angered about a lawsuit filed against Myrtle W. Melnick, owner of a strategically located Courtlands tract, by National Athletic Advisors Inc., a District-based concern allied with Courchevel in the failed deal.
National Athletic Advisors contracted with Courchevel for the right to develop Melnick's property. However, Melnick refused to sell her land separately, and National Athletic Advisors sued in Arlington Circuit Court last month to force her to sell. Although the suit was thrown out, the firm is appealing to the Virginia Supreme Court.
Some Courtlands residents regard that lawsuit as a ploy by the developers to buy time and leverage in their dealings with the homeowners. "They're tampering with people's life savings and their homes," said Clary.