The nondescript brown brick office building at Ninth and D streets NW doesn't look like a battleground, but that's what it has become.
Western Development Corp., one of the city's biggest developers, wants the 23-year-old, 10-story Federal Triangle building, but the owners don't want to sell. The Pennsylvania Avenue Development Corp. will have to untangle the arguments in its meeting tomorrow.
The building sits on the northwest corner of an empty lot where Western plans to build Market Square, a $150 million office-retail-condominium project. In November 1984, the PADC chose Western from a field of competitors to build the project, which is considered the centerpiece of the avenue's redevelopment.
All the bidders said they could build Market Square without the Federal Triangle building, occupied mostly by Justice Department offices. Now Western is asking PADC, the quasi-public agency set up to redevelop Pennsylvania Avenue, to buy or condemn the building, and Western says the property is needed to guarantee the success of Market Square.
The office building's owners, a partnership of local business persons called Ninth and D Joint Venture, are objecting to Western's request that the PADC declare "eminent domain" over the building.
Market Square, between Seventh and Ninth streets NW and Pennsylvania Avenue and D Street, sits atop a Metrorail stop and across the avenue from the National Archives.
Western -- developer of the Georgetown Park shopping mall and the controversial Washington Harbour project on the Georgetown waterfront -- plans two 13-story neoclassical buildings at Market Square.
Part of this debate involves 225 condominium units that Western said it would build on the project's upper floors. The PADC had insisted that bidders pledge to build housing, though some developers thought housing economically unfeasible.
Two years ago when PADC chose Western, Herbert S. Miller, Western's chairman, said, "Some of the other developers think the housing is a negative. We think it's a positive. It will make Pennsylvania Avenue very much like the Champs Elysees" in Paris.
But in a statement to the PADC asking for the takeover last Dec. 3, Western said that "the collapse in the D.C. housing market poses long-term high risk for all future housing developments . . . . The pioneering aspect of a new residential location with attendant security problems makes the residential component of Market Square much more difficult to market."
Western had said it wanted to demolish the Federal Triangle building and build offices. Income from the offices would act as an "internal subsidy" to the condominiums, "thus reducing the chances of project failure," Miller said in an October letter to PADC Chairman Henry A. Berliner.
Sylvan Herman, a Washington developer and one of the building's owners, said in a letter to PADC, "As the old saying goes, you simply cannot change the rules of the game in mid-stream."
Western also said acquiring the Federal Triangle property would allow it to build a more attractive complex and improve the layout of the building.
In the last 14 months, Western has offered to buy the Federal Triangle building three times, each time offering a higher price. The most recent offer, made this month, was $9.6 million, according to a memo the owners filed with PADC yesterday.
The owners say in the memo that Western's offers have been "half-hearted" and "ridiculously low," and that a mortgage banking firm recently appraised the building at $18 million, the memo said.
If PADC agrees to Western's takeover plan, the agency would first try to buy the building from the owner, and, if unsuccessful, it would ask a court to condemn the property. If the building were condemned, the agency would take control of the building at a price it would set with the owner, then sell it for that amount to the developer.
The owners' lawyers said that the owners do not want to sell under any circumstances. "We intend to fight to keep it," said one of the lawyers, Henry Hubschman.
In addition, the owner's memo -- written by its law firm, Fried, Frank, Harris, Shriver & Jacobson -- mentions what the lawyers said is evidence of "shocking" collusion in the takeover plan between PADC and Western.
The memo cites a Feb. 5 letter from Steven A. Grigg, a Western senior vice president, to M. Jay Brodie, PADC's executive director, in which Grigg said, "it was in part on the basis of your assurances in this regard about the eminent domain plan that we proceeded with this transaction."
The owners' memo said that Western apparently believes that someone at PADC said the company "could count on getting" PADC help in the takeover -- assurances the memo said would be improper.
Grigg said yesterday that "there is no collusion with PADC" and that the owners were taking the reference to "assurances" out of context in the letter.