Four years ago, Congress voted to spend $3.1 million to buy a small tract of land behind the Longworth House Office Building from a group headed by Washington developer Oliver T. Carr.
A year later, with the approval of the House Democratic leadership, the Architect of the Capitol agreed to buy the property in stages and spent $4 million to acquire just the first half.
Last week, when Congress passed a catchall spending resolution, few members realized that it included a provision to pay Carr another $4.5 million for the remaining half of the land.
The technical amendment was inserted in Carr's behalf at the behest of a local lawmaker, Rep. Michael D. Barnes (D-Md.).
Congress thus could spend $8.5 million for the 1.5-acre parking lot, possibly eight times what Carr and his partners paid for it and 174 percent more than Congress originally agreed to pay.
Spokesmen for Carr and Architect of the Capitol George M. White, who negotiated the deal, said the settlement is reasonable and reflects the escalating value of Capitol Hill property.
"The bottom line is we're getting less than it's worth," said Richard Carr, vice president of Oliver T. Carr Co. "We've been sitting on land we can't develop like we wanted to for three years, paying interest and real estate taxes . . . . When we negotiated the deal for $8 million, I think that was a fair price. It's worth more now."
But Rep. Clay Shaw (R-Fla.), a leading critic of the purchase, said, "This clearly was a back-room deal. Those who participated in it should be ashamed of themselves. They did not want this whole slimy mess debated on the floor of the House."
Barnes' press secretary, Bill Bronrott, said that "Oliver Carr turned to Mike Barnes because they have worked together. They have a friendship of sorts." He said it was irrelevant that Carr, a former president of the Washington Board of Trade, has been a political supporter of Barnes.
"We got involved to resolve a longstanding snafu," Bronrott said. "There was absolutely no controversy associated with the issue. It was merely a technical matter."
White has been trying for years to acquire the land at Canal and Ivy streets SE for future expansion, although his master plan for the Capitol says that no House office building will be built there for at least 50 years. The site is across the street from the National Democratic Club, whose guests often use it for parking.
In 1979, White became worried about Carr's plans to erect a three-story office building on the site, which would make it prohibitively expensive for Congress to acquire. White hired a McLean appraiser, Robert H. Jones, who valued the tract at $3.1 million.
Congress authorized the purchase in 1980 and appropriated the funds in early 1981. By then, however, Carr refused to sell the land at that price, saying that its value had more than tripled in two years.
But Carr was willing to negotiate, largely because Congress has the power to condemn the property and let the courts decide the compensation.
White had Jones do a second appraisal, which found that the property's value had jumped to $11 million. "That blew our minds," said Ben Wimberly, the architect's general counsel. "It seemed crazy."
White then hired two more appraisers, who valued the land at $6.6 million and $7.2 illion.
In late 1981, White agreed to buy the Carr property for $8 million. But since White had only $4 million available -- the money Congress had voted plus some contingency funds -- he decided to "buy in" to the deal.
White arranged to buy half the tract for $4 million and the other half later for another $4 million, plus up to $500,000 in interest if he didn't complete the deal within 10 months.
He took the contract to House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), who heads the House Office Building Commission, and Rep. James J. Howard (D-N.J.), chairman of the House Public Works and Transportation Committee. Both signed off.
An aide to O'Neill said the three-member building panel formally approved the purchase. But the sole Republican member, House Minority Leader Robert H. Michel (R-Ill.), said he does not recall approving the contract and thinks the price is too high. Approval by two of the three commission members would be sufficient.
White took title to half the tract in February 1982, but his option for the second half expired as the issue bogged down in Congress. The House appropriated the additional $4.5 million, but Howard could not win final House approval for a bill to authorize the purchase. Without the authorization, the money could not be spent.
Howard brought his authorization bill back to the Public Works Committee last spring. The Republicans balked, and it failed on a tie vote. But some Democrats later switched sides, and the bill was approved on a straight party-line vote.
As the 98th Congress headed for adjournment last week, Howard again could not get the bill to the floor. It was then that Carr approached Barnes.
Since it was too late for House members to add amendments to the continuing budget resolution, Barnes asked Sen. Patrick J. Leahy (D-Vt.) to do it for him. Leahy's language waived the need for an authorization bill, clearing the way for the architect to buy the second parcel for $4.5 million.
Leahy, a member of the Senate Appropriations Committee, offered the amendment "as a courtesy," an aide said. "There's a comity between the two houses. If the House needs something, we don't oppose it."
Bronrott, Barnes' spokesman, said the maneuver was used because "time was short. The architect had bought half the land and left Carr with too little to build on. Congress had followed through on only half its commitment and left this person out in the cold."
Shaw, however, said that the deal was "preposterous" and that the House never would have approved it in a roll-call vote. He noted that the second Carr parcel is one-sixth the size of a nearby tract that Conrail proposed to sell to a developer in 1981 for the same price, $4.5 million. That deal still is pending.
Richard Carr said his company would have preferred to develop the land and sold it only as an "accommodation" to Congress. He said that the architect's first appraisal was too low and that the combined property was worth far more than the smaller parcels originally purchased by the partners. "The person who bought the property for the White House in 1792 didn't pay a lot, either," he said.
Elliott Carroll, White's executive assistant, said the architect was required to base his offer on the independent appraisals. "This is one of the problems with the length of time that it takes for legislation to pass," he said. "There were extreme rises in real estate prices in Washington."
The saga isn't over yet, however, for the architect still doesn't know whether the deal can be completed for the $4.5 million price negotiated three years ago. If Carr asks for more money, Carroll said, "then we have a problem."