MURRY'S ON THE WAY OUT? With a brand-new Giant Foods under construction at 3rd and H Street NE, it looks like there may be less of a need for the much-maligned Murry's grocery store three blocks away on 6th Street. H Street Great Street heard that something's moving there. Sure enough, a reliable source in the broker community tells me that 610 H Street NE, which also includes the Good Danny's carryout, is under contract and on track to settle in November. The owner, listed in property records as "SPUTNIK LLC," is none other than taxicab magnate Gerry Schaeffer, also the owner of a certain piece of land at New York and Bladensburg Avenues NE that's slated to become a Walmart. As with that deal in its early stages, Schaeffer's playing his cards close to his chest. "It's a confidential agreement," he told me. "I can't talk about it."

CHOICES, CHOICES: Remember that crazy offer from Monument Realty for the Frontiers East and West condo developments? Well, residents have been thinking it over, and a few weeks ago entertained yet another proposition—this time from local developer Lakritz Adler. Principal Josh Adler caught me before I could sit in on the presentation, which they held at the swank Donovan House hotel, so I don't have details of the offer. But Adler assures me it's competitive, and expects to hear some indication of the homeowners' thinking in October. Of course, 100 percent of the homeowners must agree to sell, so chances are slim for a favorable outcome for either developer.

Private bids for the Old Post Office

Designed with finance partner Angelo Gordon and an NBC news producer who approached him with the idea 18 months ago, his plan would be to create high-end production facilities shared by everyone from major networks to the many DC offices of overseas press; higher floors would be offices of media-oriented law firms and lobbyists, and companies like Yahoo and Google. Consistent with GSA’s guidance that the building should emphasize interactive public use, Michael envisions tourists freely looking in on glass-enclosed studios, joining audiences of ongoing programs, or perhaps just ogling Wolf Blitzer.

Kind of like...the 102-year-old National Press Club, which houses offices for overseas news outlets. Also kind of like...the Newseum, which educates the public about the media business. Neither of those house all the folks Monument CEO Michael Darby has in mind, but still, do we really need that much real estate devoted to the fourth estate?

Developers take note: Clever ad campaigns earn you free media!

That's the choice facing 54 homeowners and their families in Logan Circle in the next few weeks, as big-time developer Monument Realty makes a bid for four separate parcels that operate as part of the same condominium association.

You probably know the properties: The plain brick townhouses between Riggs and S Street on 14th Street and clustered around 11th and N Street that don't quite fit with the large apartment buildings and historic facades around them. The city built them in the 1970s as rental housing, and finally made them available for tenants to purchase in 1998, selling the three and four-bedroom units with backyards and parking spaces for between $100,000 and $150,000. Now 54 privately owned homes, the pieces were consolidated into the Frontiers East and West Condominium Associations, and now help give the neighborhood a modicum of income diversity.

They also, however, represent some of the biggest chunks of re-developable land in the downtown residential core. And now, two developers are vying to buy them all at once, rezone for higher density, and build as much as they can.

Last night, Monument presented its offer to residents. It's a bit complicated. I'll try to fit it in a nutshell.

If the 14th Street parcel ("Frontiers West") were successfully rezoned to allow four stories, owners would get $810,250 for their units, which is 175 percent of the current assessed value. The price offered for the units on the other three parcels on and around 11th Street ("Frontiers East") would depend on the additional density Monument was able to achieve, putting the payout at between $681,000 and $794,500. The developer would even pay residents $115,000 just for agreeing to sell if the zoning change were allowed, even it weren't and the sale never went through. If the residents want to stay in the neighborhood, Monument said it could make units available in the new buildings for them.

Sweet deal, right? Here's the catch: According to how the condo associations were set up, 80 percent of all 54 homeowners would have to vote to dissolve the "master" condo association. And then, each of the two separate condo associations would have to vote unanimously to dissolve themselves. So one homeowner in each of the associations could throw the whole opportunity off for everybody. For its part, Monument could end up getting both, either, or none of the parcels to redevelop. Buying the whole thing would cost around $40 million, but hundreds of new units—either sold or rented at market rate—would pay that off in a hurry.

Even though it might be in their economic self-interest to take the money and run, judging from last night's meeting at the Washington Plaza Hotel, at least a few people seemed too emotionally attached to their homes to leave. Others seemed willing to listen—and hold out for a better price.

"We're living on a gold mine!" one resident protested.

"You can live on the gold mine for the rest of your life!" said Monument's Josh Olsen, whose patience started to erode after several minutes of audience chaos. "You're not going to get gold out of the gold mine unless you sell!"

The residents were asked to fill out surveys indicating their interest in the offer, and Olsen said he wouldn't pursue the project unless a majority came back positive. It's an interesting case: Because of how their associations are set up, each person has the power to singlehandedly forestall a big lurch forward for gentrification. From an urbanist standpoint, that means a few acres of prime land stay underused. On the other hand, it's difficult to get excited about replacing 54 mostly low-to-moderate-income households of color with yuppies who can afford pricey condos.

Either way, Monument's suits—and the other nameless bidder waiting in the wings—have a real job on their hands.

• What happened: Developer Scott Pannick built Logan Circle's Metropole, which has since been seized by his lender. Moving on: Pannick plays with his three-year-old daughter (Ugh, how pitiable!), and plans a six month move to Argentina "to contemplate his future, the options of which include writing a novel."

• What happened: Former co-owner of Monument Realty Jeff Neal leaves a bunch of half-finished projects around D.C.—most noticeably in the Capitol Riverfront/ballpark area—to take over a "failing brokerage that he closed this year." Moving on: Still developing...this time, in the realm of reality television; he declined to discuss his new show, "except to say that he's not the star." Neal also plays golf and works on a book about politics.

• What happened: Trained architect Dominque Kostelac "amassed up to $5 million, buying, selling and rehabilitating properties in Mount Pleasant, Adams Morgan and Shaw" before beginning a more substantial 21-unit condo in Adams Morgan in 2000. But construction  delays caused him to eventually foreclose on nearly all his properties. Moving on: His new business Arganica Farm Club is freshening up palates across the D.C. region with a produce delivery service, based in Charlottesville, plus he produced sorbets and syrups.

An old Monument Realty sign near the entrance to the Watergate Hotel. Rooms should be available right about now!

Back in July, I and many members of the national and international press corps packed into a small Friendship Heights office for the auction of the Watergate Hotel. BBC was there! And CNN! And then...and then...nothing really happened.

One offer was tossed out: $25 million from the original lender for the purchase of the hotel, PB Capital. No other hands shot up. Developer Monument Realty lost the property. PB Capital took it back.

Since then, the story's taken a few twists: In October, the Wall Street Journal reported that the hotel was under contract to “a venture led by Holland Development Group for a price that is expected to be in the $40 million range.”

But just today, DCmud reported that Holland is now out of the picture—but Monument Realty is back in again.

Right after the auction, DCMud talked to Monument's Michael Darby, "who indicated he had raised the necessary funds to buy back the property," but was turned down by the bank. But now, with Holland no longer interested in the building, rumor is Monument's steppin' up its efforts again (according to DCmud):

An industry source says Monument is seeking contractors for a "top to bottom renovation of the existing 13-story, 250-room hotel. Renovations will include reducing the number of rooms, while expanding the rooms that do remain to 650 s.f." The project costs are estimated at $20 million. When DCMud inquired about Monument's plans, Natasha Stancill, spokesperson for Monument, responded "we are going to pass on commenting." Which of course increased our suspicion.

Image by Ruth Samuelson

What's behind many of those signs, of course, is a cavernous hole in the ground.

The view from Capitol Riverfront's 55 M Street, which just signed its first tenant.

The Capitol Riverfront hastened its slow trickle of tenants and businesses during the last few weeks. On Friday, Mayor Adrian Fenty announced that the city would be taking over a building, located at 225 Virginia Ave. SE on the northern border of the neighborhood. In two years, Child and Family Services Agency (CFSA), Office of Chief Technology Officer (OCTO), and District of Columbia Commission on the Arts and Humanities (DCCAH) will move into the newly renovated, 350,000-square-foot LEED Silver certified office building.

Yeah, city agencies! Just what a neighborhood needs to generate buzz  and inch onto people's radars! Thankfully, there have been other new signs of life: As I previously noted, Harris Teeter signed a letter of intent to open a new location in the Capitol Riverfront. More recently—as in last week—the Washington Business Journal reported that a new Italian pizza/salad/sandwich joint will move into the recently completed Velocity Capitol Riverfront condo building.

Justin Ross, formerly of Austin Grill, is the owner, and he says he hopes to open in two months.

In addition, 55 M Street, SE—which hosted Artomatic this summer, introducing thousands of visitors to the neighborhood's gaping holes and empty spaces—signed its first tenant in late October. "Sayres, a government services contractor providing engineering, technical, acquisition and program management, business financial and IT, and security analysis support to DoD, DoT, Homeland Security and other federal agencies, will locate its 20,000 SF headquarters in the new building," according to a press release from Monument Realty.

A sign, posted by the hotel's entrance, from more optimistic days

After attending yesterday's auction, I went down to the Watergate Hotel itself to check out the not-so-desirable goods.

For the record: There were interested parties at yesterday's auction—just none that wanted to surpass the lender's initial bid of $25 million.

Paul Cooper, of Alex Cooper Auctioneers, Inc, said there were "less than a dozen" registered bidders.  Then, with some cajoling from reporters, he redefined the group as approximately 10.  So: Eleven bidders perhaps?

Here's the circular entrance and some shots looking into the lobby. The last photo is a shot taken from inside one of the Watergate office buildings.

When the Watergate Hotel gets auctioned off, people show up. Nearly ten TV cameras, a whole bunch of real-estate types, and your favorite Housing Complex reporter packed into a Wisconsin Avenue office for the event.

Then we sat in the ultimate state of real-estate/legal boredom, as a functionary read aloud about 15 pages of technical stuff about the sale, the property, the minutiae. That took about 40 minutes.*

Then, to the auction: An immediate opening bid hit the floor—$25 million for this piece of historic Washington. The bid came from a lawyer connected to PB Capital, which happens to be the lender for the current owner of the property, Monument Realty.

Following the bid, there was a bit of commotion. A phone call was made from the front row. People did some whispering and gesticulating. Then, well, nothing. Soon enough, the bidder and the auctioneer went into a private room for some discussions. They returned a short while later.

The proceedings resumed but no more bids surfaced. Sold.

Paul Cooper, a representative from the Alex Cooper Auctioneers, Inc., identified the bidder as David Astrove, who was representing PB Capital, a New York-based real estate outfit, in this transaction.

If nothing else, the auction reflected the Watergate's upside-downness: Though its market value is $25 million, the outstanding loan balance for Monument Realty is $40 million.

*Original reporting stated that "about 12" pages were read. An Alex Cooper employee later said 15 pages were read.

Image by Ruth Samuelson