Cousins Dennis and Gary Berman and their partner Richard Dreisen seem to have a knack for doing well while doing good. They take hard-to-use properties--empty schools--turn them into office buildings and convince the neighbors and government officials that the whole thing was a good idea.
Their first project, Phair Elementary School in Laurel, has blossomed into the Phair Office Park. The deteriorating one-story red brick and glass structure was transformed into a sleek tan stucco office building with mansard roof and private entrances for the professional businesses inside. And in a time of economic doldrums in the Washington area and nationwide, the building is virtually fully rented.
"This has been a bigger success than anyone thought it would be," says Dreisen. "We just really got a hot thing. It shows it can be done still if you use your imagination."
Phair has been such a success that the three partners have bought two more schools from Prince George's County and plan to turn them into similar office buildings. Laurel Junior High School adjacent to the Phair Office Park will become Phair, Phase Two, and, if zoning authorities agree to it, Beltsville Elementary School will become Beltsville Office Park.
Prince George's County officials have been delighted with the reincarnation of Phair Elementary. A somewhat flowery County Council proclamation calls the project "a celebration of a mutually beneficial partnership between the county and private enterprise." And no wonder. With the school population declining--as it has been throughout the metropolitan area--there are a dozen schools for sale in the county now and six more are scheduled to be closed at the end of the school year.
Lorraine Collins, a county property specialist whose job it is to arrange sales of unused schools, says Phair is "our pride and joy." She said the county likes to work with the Bermans and Dreisen because "those young men are knowledgeable and they can come up with the figures. It's just great to have people like them around."
The partners, all of whom are in their 30s, have no doubts about the reasons for their success: They say they are very good at what they do. Gary Berman said his family has a long history in Laurel. His father, Melvin Berman, and uncle, Wolford Berman, were builders in the Laurel area for years and "we're sort of married to the Laurel community."
None of the partners wants to get into zoning fights. "I wanted to go into a business that was very positive," Dreisen said. "If we made a decision that would involve a fight with the citizens, I wouldn't want to do it. Life's too short."
When the three decided to take over the Phair School, it had been empty for two years and Dreisen said it was becomong a problem for the county. The paint was peeling, there were leaks in the roof, and youngsters had begun to hang out there. In addition to the $500,000 purchase price, the county now gets real estate taxes from the building and taxes from the businesses that have offices there. They include an engineering firm, a laboratory, a dance studio, and county and state government offices.
To make the transition from purchasers to landlords, the three partners have used some unusual business methods.
They answer the telephone themselves. They knock on doors and ask for meetings with neighbors of the schools they want to turn into offices. They make their own presentations before zoning examiners and boards. They are their own general contractors, hiring roofers, electricians and plumbers, many of whom are local people. Dreisen says, "These are the people who put the electrical outlet in the right place for our tenants when we can't be there." Between them, the three also lay out the offices and then, when the tenants are in, they manage the buildings.
"If the tenants have a problem they can call. One of us is always here," Dreisen said. "We can't be bureaucratic. A big staff would slow us down." Besides, he said, the three are looking for referrals for their new projects so they can't just renovate and walk away.
Both Gary Berman and Dreisen say the do-it-yourself method has enabled them to rent their offices at lower-than-market rates for the amenities they offer. Dreisen said rents in Phair are $7 to $9.50 a square foot and they will be $8 to $10 a square foot in Laurel Junior High School.
Their unusual business methods also have generated unusual cooperation from the people who live near the schools and from government officials. The Beltsville-Vansville Citizens Association presented a letter at a county zoning hearing in favor of a zoning change that would allow offices in Beltsville Elementary School.
Both the Phair School and the adjacent Laurel Junior High were half in Prince George's County and half in the city of Laurel. After agreeing first to buy Phair and later Laurel Junior High, the three contractors asked Laurel to annex the properties and grant the zoning to convert them to offices. Because the neighbors did not oppose it and there already are businesses across the street from the site, the city agreed. Dreisen said renovation work in the Phair School cost something over $1.4 million.
In their latest agreement with Prince George's County, the Bermans amd Dreisen have agreed to pay $1.1 million for Laurel Junior High and $457,000 for Beltsville Elementary. Purchase of the Beltsville school depends on a zoning change allowing offices in a residential neighborhood.
Lorraine Kenyon, the president of the Beltsville-Vansville Citizens Association, said the association has been working with the developers since June "when they told us what they wanted to do" with the Beltsville school.
"Let's face it, we have an empty building that was becomong an eyesore," Kenyon said. She said some neighbors would have preferred housing for senior citizens on the site but no money was available for that.
Kenyon said the neighbors were afraid they would lose the only ball field in the area with the conversion, but the three developers offered to deed the field to the park planning commission for the residents' use. Kenyon said the citizens association has found that the three do quality work and are cooperative, so the neighborhood has gone along with their plans,
Another hurdle was the only tenant the county had found to rent part of Laurel Junior High School--the Tablernacle Church, a born-again Christian sect. Gary Berman said the church also wanted to buy the building, "but they couldn't match our price."
To get the cooperation of the church, the three partners offered it free rent until mid-1984, when Dreisen said church officials hope to buy a place of their own. Berman said the partners would like to have that portion of the building sooner but "in the long run, it won't make that much difference."
To do business this way, Dreisen said all three partners need the financial strength to get loans and the youth and energy to carry it off. He said the system is just the sort of enterprise President Reagan has proposed--"citizens, government and business all together."