A major area developer has engaged in “extortionist tactics” and false claims to stall development of the $550 million D.C. convention center hotel, the District claims.
In a lawsuit filed last week in D.C. Superior Court against JBG Properties Inc., and JBG principals Benjamin Jacobs and Kenneth Finkelstein, the city says JBG has schemedto delay construction of a new Marriott Marquis Hotel adjacent to the Walter E. Washington Convention Center.
The proposed 1,100-room hotel, with 100,000 square feet of meeting space and an underground parking garage, is regarded by D.C. leaders as critical to convention center success. The District has agreed to lay out $160 million for the project, with repayment coming from tax revenues generated by the property.
JBG, the District claims, has interfered with the convention center project to force concessions out of Marriott related to the JBG-owned Washington Marriott Wardman Park. JBG wants to convert a portion of Wardman Park into residential, according to the lawsuit, but Marriott has refused to concede to the developer’s terms.
The dispute dates back to July 8, the lawsuit claims, during a meeting between Jacobs and Finkelstein and Marriott executives. At that time, according to court documents, Jacobs explained that “he knew how important the Hotel project is to Marriott, and that there were actions Wardman [Investor] might take that might impact what Marriott is doing there.”
On July 28, Jacobs and Finkelstein filed an action with the D.C. Contract Appeals Board, claiming the District’s contracting process for the convention center hotel was invalid. That action was later tossed, but JBG also took its case to D.C. Superior Court, tying up the development.
The District, the suit claims, “is being held hostage in a petty private squabble at a time when it and its residents can least afford it.”
D.C. is asking for monetary damages and an injunction barring the firm from interfering with the convention center project. It also is seeking expedited review, D.C. Attorney General Peter Nickles said Friday.
“We’ve got a deadline coming up when the banks, if they choose, could bow out or hold to the terms,” Nickles said. “[JBG is] effectively causing the city very, very substantial losses, and we’re not going to stand by and accept these losses.”
Calls to JBG were not returned.
