After a year of negotiations and financial finagling, a tenants association on upper Connecticut Avenue has bought its apartment building to turn into condominiums without the help of a developer.
The 91-unit building at 4707 Connecticut Ave. cost the tenants $2.2 million, and the sale was completed on Monday, according to the group's attorney Benny Kass. The group plans to spend about $3 million on rehabilitation.
Throughout the year, the tenants found they had serious problems getting financing to buy and rehabilitate the building because of high interest rates. In addition, the District's new condominium conversion law presented problems because of provisions protecting the rights of the elderly, making an investment in the property potentially less attractive to investors, and a requirement that only the owner of a building can convert it.
They were able to get loans individually from B. F. Saul, however, to buy their own apartments, and this was what enabled them finally to purchase the entire building, according to tenants association president Richard Blue.
A total of 29 tenants bought their own apartments at $55 a square foot, or between about $42,000 to $66,000 per unit; outside investors bought 18 units reserved for the elderly; and the tenants jointly bought the rest of the apartments in the building, which they plan to sell to the general public for about $90 a square foot once they are rehabilitated, Kass and Blue said.
The elderly who are members of the tenants association are assured they can stay at the same rent for their lifetimes, and those who did not join have the same protection under the District law. That law is due to expire in September 1983, but Blue said the association anticipates that it will be extended beyond that time.
To encourage investors to buy the units the elderly are renting for about $200 to $300 a month, the tenants group agreed to subsidize the rents to about $800 or $900 a month for two years, Blue said.
Harry Kettmer, president of Kettmer and Co., who has been involved with other tenant condominium purchases, said that most of those he is familiar with use a coventure or a shared-equity system rather than buying the building by themselves.