The decade-old war over tenants' rights at McLean Gardens appears to have ended with a negotiated peace settlement. But a new fight over owners rights may be looming at the 43-acre complex, the biggest moderate-income project in the city to be converted to condominium ownership.
The remaining 116, out of 723 families and individuals that were renting at McLean Gardens when conversion plans were announced, recently concluded an agreement for sales discounts and special financing with the partnership that owns the low-rise, red-brick complex west of Wisconsin Avenue and Porter Street NW.
But even before the wounds have begun to heal on the tenant conflict, the condominium developer already has had skirmishes with a new battalion of residents -- the condo unit owners who bought into the project within the last couple of years while the tenants' dispute still was being negotiated.
Some of these owners are unhappy with changes they say the developer has started to make without consulting them. Most of these are additions designed to enhance the sales potential of the project but don't necessarily meet with the approval of those who have already bought, some owners are saying.
The McLean Gardens tenants' battle was one of several conflicts in the District in recent years over what rights renters have when their apartments are to be turned into condominiums and offered for sale. At issue with the owners' complaints are how much control a unit owner has when the developer is still involved with the project.
Among the unexpected and not entirely welcome planning changes cited by the owners are parking lots, a cable television dish and a swimming pool.
"It's those kinds of surprises that cause problems," said Nancy Connor, head of the unit owners association communications committee who moved in in April.
"You come home and find a big communications saucer in your back yard. It's an added selling feature . . . but it's in my back yard. A pool is an added selling feature, but what about the noise?"
Connor said the first she knew of the parking lot being put in behind her building was when she woke up one morning in July to find a bulldozer there. So she resorted to guerrilla tactics, parking her car in front of the bulldozer so it couldn't move and sounding the alarm to other owners. That night they had a meeting with a representative of the developer to explain the decision, but the lot went in anyway.
Martin Gershen said he paid a $3,000 premium for a duplex with woods behind it -- only to have the trees replaced with another parking lot.
"I'm outraged, but what can I do about it?" he said. Homeowners also were told they would have storage space in their units, but instead were give $500 to have one built -- if the owners used one particular carpenter, who was charging $1,500, Gershen said.
Some owners said they felt pressured into agreeing to a consolidation of the first two phases of the project, even though they weren't sure what the change in the condominium's legal structure would mean. Some said they feared they would be bought out by the developer if they didn't agree.
Several others had a variety of complaints -- some serious, some frivolous -- about their units, but many were not willing to be quoted by name about them. Some said they were afraid complaining publicly would make it more difficult for them personally to get things done in their units. Others said they liked living in McLean Gardens and didn't want to make the place look bad.
As for the tenants, their agreement seems to have given them peace -- and a piece of the action -- but not much pleasure.
The tenants' agreement includes sales discounts of about $18,000 from current public prices and a special financing deal: $25,552 in mortgage money at 9 percent interest. In addition, the tenants don't have to make any payments on their $25,552 loans for seven years, but then the entire amount is due. For those who choose to leave rather than buy, the agreement provides for an $18,000 cash payment.
District condominium experts say the tenants seem to have gotten a good bargain compared with other area conversion deals, but the tenants themselves seem more weary from the 10-year-old fight than delighted with the results.
"I can't say the feeling of the tenants is one of jubilation or relief," said Phil Mendelson, chairman of the McLean Gardens Residents Association. "It's been a long, long process; that's pretty much the feeling."
Another tenant, who asked not to be named, agrees: "I'm very tired after all these years. I've been at it since 1971. Now I'm sitting here in an apartment with no hot water and no heat, amidst all the dirt and grime of construction." The heat was disconnected in July and hasn't been turned on again, she said.
The $18,000 discounts and the financing plan are "really very good," but some people are dissatisfied with the current prices of the units, Mendelson said.
"People had hoped for cheaper prices. I don't know if we were naive or if the market was wrong," he said.
For the smallest 506-square-foot efficiency units, selling to the public for $65,800, a pricing formula in the agreement gives the tenant a price of $42,668. If the tenant used the delayed-payment plan, the payment for the first seven years would be on $17,116 minus a down payment.
Mendelson pointed out that the tenants had wanted to buy in the first phase of the project when prices were lower, but said the developers would not let the tenants buy there originally. The appreciation even from public prices would have been greater than $18,000 by now in some cases, he said.
Project manager Donald Epner said there have been substantial price increases since the first units were offered for sale in 1979, largely because the developer belatedly realized that the original selling prices were not even covering the actual costs of conversion. The losses from the first phase had to be made up with higher prices in the second phase, he added.
The agreement also gives the tenants a 26.9 percent share of any profits of more than $8.6 million to the developers, though Epner indicated a bonanza from that provision is unlikely.
"If all our accountants are wrong, and we get to the end and make humongous profits, the tenants will get a part of it," he said.
McLean Gardens used to be a moderate-income rental community that housed a number of elderly people in dormitory-like buildings. In 1972 the complex was bought by CBI Fairmac, developer of Fairlington Villages in Virginia, for condominium conversion, and the lengthy struggle began.
The tenants organized in an effort to keep the apartments as rental units. CBI Fairmac toyed with the idea of tearing the whole place down and turning it into a diplomatic enclave, but this idea was quashed and in 1978 the developer decided to sell out.
The tenants' group decided to try to buy the place themselves, and eventually put together a partnership with managing general partner Arthur Rubloff & Co., the Kornblatt Corp. of Baltimore, and former World Bank official William McCulloch III.
In the meantime, tenants had had both the carrot and the stick approaches used to push or pull them out of the apartments. The various efforts to get them out over the years included eviction notices and cash payments that started at $500 in the early years.
When the partnership that included the tenants bought the complex in 1979, the war of wills and of attrition had reduced the number of remaining rental households from 723 to 160. That number is down to 116, of which about 20 have decided to take the $18,000 buyout.
As that group is winding down its disagreements with the developer, however, the complaints of the new condo owners are growing.
On the parking lot issue, for example, owners said that buyers were promised underground parking at $2,000 to $3,000 a space, but now they are having to pay $5,000 for spaces in lots being built across formerly green areas.
Project manager Epner responded that the public offering statement said there would be either a parking structure or parking lots and that a garage turned out to be much too costly. When the structure idea was analyzed, "much to our chagrin and embarrassment," the cost turned out to be "astronomical" and would have required charging $12,000 per space, he said.
"We're not turning McLean Gardens into a parking lot," Epner added.
At the same time, he readily agrees that the unit owners should have been consulted first before the lots were started. "It was thoughtless on our part," he said. But Epner said that no one was promised a price of $2,000 to $3,000 and that many owners wanted the lots as much as others opposed them.
When the project is completed it is to include 723 renovated units and 650 new units. Of the 330 now available, 258 have been sold, according to Epner. The renovation is supposed to be finished at the end of 1983, and it is unclear if new construction will begin before then, Epner said.
There are 10 acres of undeveloped land where the dormatories used to be, and resident Connor said owners are watching plans for that area closely.
"Most people are concerned about what is going to happen in the future," she said. "People are very much concerned about what is going to be done with the 10-acre tract to make it marketable."
Epner, however, says there is no secret to the plans for that area, that the developer is committed to fairly low-density residential structures and about 35,000 to 40,000 square feet of commercial and retail space.
The plans call for a mix of buildings, perhaps one tall, central structure some three-, four- and five-story buildings connected with bridges and a couple of six- and seven-story buildings, all set back from Wisconsin Avenue. That mix of buildings would require rezoning, and the developers plan to talk to city officials and start zoning hearings soon, he said.