Legal battle drags on over ownership of Brightwood apartment building

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The Rittenhouse is a 208-unit building at 6101 16th St. NW in Brightwood. (Brian Kapur/The Current/October 2016)
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long-running legal saga involving ownership of The Rittenhouse apartments in Brightwood remains much farther from a conclusion than residents had hoped.

In the latest step, a judge agreed last month to take a stab at settling the most recent dispute. But the possibility of further appeals continues to loom — as the aging building continues to deteriorate.

Tenants said their painful, draining process began when they tried to exercise their right of first refusal when the property went up for sale in fall 2014. Under the Tenant Opportunity to Purchase Act, or TOPA, tenants associations have the option to purchase a for-sale building or, if they don’t have the funds, partner with a new owner of their choosing. The effort has endured a bewildering array of lawsuits from various firms interested in taking over the 208-unit building at 6101 16th St. NW.

“Nobody in the building knows what the heck is going on,” tenants association president James Spanelli told The Current in July. “This has gotten so protracted over time and complicated, that the regular folks living in the building, except for a few people on the board, and the very few people that actually pay attention, don’t even know what’s going on.”

The Rittenhouse was developed in the mid-1950s by Abe Pollin — onetime owner of the Washington Capitals, Wizards and Mystics — and local architect Joseph Abel. The nine-story International Style building opened in 1957 and marked the first large-scale luxury apartment dwelling of its kind in the Brightwood area, according to several local history books. Civil rights activist and former D.C. shadow senator Rev. Jesse Jackson lived in the building during the late 1980s. Comedian and civil rights activist Dick Gregory, who died on Aug. 19, lived in the building for the last decade-plus of his life.

But the building has since fallen into some disrepair. When investment firm TIAA-CREF put The Rittenhouse up for sale in fall 2014, tenants expected to take advantage of their TOPA rights with few complications. Instead, they’ve had to pass an exhausting series of hurdles which has had the effect of unifying them as never before, Spanelli told The Current.

“It has made us so strong and pulled us together, as we have been fighting this and waiting together,” Spanelli said earlier this year. “We’ve had this collective goal in which we were standing strong against … an invading force in the building.”

In the tenants’ eyes, that force first came in the form of the Orlo Fund, which Spanelli and his neighbors initially chose as their development partner. But they never signed a final agreement because 47 out of 56 association members voted not to accept the development agreement with Orlo, choosing instead Urban Investment Partners. Orlo sued the tenants, arguing that they had broken the law in backing down from Orlo after indicating interest in a partnership. That suit dragged on for months, eventually reaching a settlement agreement in January 2017 that afforded Orlo an undisclosed sum of money in exchange for abandoning The Rittenhouse entirely.

But around then, another firm ramped up its own interest in the building: Akelius, which had agreed with current building owner TIAA-CREF in November 2015 to purchase The Rittenhouse for $40.2 million if the tenants failed to secure a deal, and put $2 million in escrow toward the purchase.

So, rather than moving forward with Urban Investment as they hoped, tenants instead faced a lawsuit from Akelius directed at the tenant association as well as Orlo, Urban Investment and TIAA. The suit essentially argued that the association was legally obligated to hand over the building rights to Akelius immediately after the Orlo agreement was signed — without a chance to go back to its original deal with Urban Investment.

For the tenants, defeat had been snatched from the jaws of victory. Just as one contentious dispute appeared to wrap up, another reared its head. Residents groaned and some considered moving. Others dug in to continue their fight, filing a motion to dismiss Akelius’ suit.

On April 13, D.C. Superior Court Judge Jennifer Di Toro granted the motion. Then tenants spent the next weeks anxious to get confirmation from Urban Investment Partners that the sale had been successful — only to find out in May that Akelius had filed a motion for reconsideration of Di Toro’s decision.

After two months of silence, DiToro announced on July 14 that she will consider the developer’s request as a matter for summary judgment, in which both parties will offer their cases during an abbreviated non-jury trial. Replies from both parties were due by Aug. 8, with a hearing slated for later this fall. A representative for Akelius didn’t provide comment in time for publication.

Even if the motion for reconsideration is eventually dismissed, Akelius could still appeal the decision to a higher court. Meanwhile, maintenance of the building has started to deteriorate, according to Spanelli — a parking garage elevator was inactive for days, the lock on the garage door has stopped working several times, and water began leaking onto one resident’s exterior wall. On several mornings, a pungent smell of sewage wafted in the building’s lobby. “Things just aren’t getting fixed,” Spanelli said.

The building’s management company, Greystar, declined to comment.

Though the winning developer, Urban Investment Partners, still has the tenants’ favor, it hasn’t gotten away unscathed. Legal fees on behalf of the tenants totaled “many hundreds of thousands of dollars,” according to Urban Investment principal Steve Schwat. The company also hired a staff of five to manage the property and then shuffled them around to other properties while the Rittenhouse was tied up in litigation. Still, Schwat stayed resolute.

“It couldn’t possibly become unsustainable. You couldn’t have that much legal costs that it would be unsustainable for us,” Schwat said. “And we are 100 percent certain that we are in the right.”

All of the involved developers told The Current they were genuinely eager to purchase The Rittenhouse and saw great potential for improving it in the long term. Marty Saturn, Orlo’s executive vice president, told The Current he still laments the outcome.

“I think the tenant mix is fabulous. I think they care about where they live, and there’s a lot of pride of ownership in the building,” Saturn said. “It would have been a lot of fun to renovate the building and give the tenants who have been living there for so long a first-class asset.”

Assuming the agreement with the tenants is eventually successful, Urban Investment Partners hopes to initiate a “significant amount of capital improvements and management improvements” as part of the development agreement the tenants signed back before Orlo sued, Schwat said.

For Spanelli, the legal fight has provided motivation to stay in the building. He and his husband likely would have moved out by now if not for his role in the litigation, Spanelli said. Still, he’s emotionally invested now, for the sake of his neighbors and the building itself, which he still loves.

“I’m sticking this fight out for sure,” he said. “They’re fantastic apartments.”

This article has been updated to correct the reason the tenants association did not select Orlo as the building’s buyer. The association’s membership, not the association’s board, voted against the deal.