D.C.'s Watergate Hotel draws no bids at foreclosure auction

McClatchy NewspapersJuly 21, 2009 

The Watergate Hotel, part of a complex made famous by a presidential scandal.

JACQUELYN MARTIN/AP

WASHINGTON — The Watergate Hotel, the iconic property synonymous with the downfall of President Richard Nixon, failed to attract any bids when it was auctioned Tuesday.

Joseph Cooper, who wielded the gavel, seemed surprised when there was silence after the auction opened at $25 million.

"It's a Washington landmark," said Cooper, the president of Alex Cooper Auctioneers, after calling the bid a few times.

Still, no one called out a higher amount.

"It's a national landmark, really," he told the crowd. The June 17, 1972, burglary of Democratic National Committee headquarters at the complex was at the center of the scandal that would lead to Nixon's resignation two years later.

In the end, New York-based PB Capital Corp., which had lent previous owner Monument Realty $40 million for the property, agreed to take the hotel for $25 million.

That means that Monument Realty still owes PB Capital $15 million, said Paul Cooper, the vice president of Alex Cooper Auctioneers, which conducted the auction.

"Something good will come out of this," said Michael Darby, the owner of Monument Realty. "This puts it in the hands of a group that can move it forward. It should be a first-class hotel."

Darby said the lender will likely look for a private buyer for the hotel, which is estimated to need tens of millions of dollars in renovations to reopen.

The city foreclosed on the property Thursday after Monument Realty defaulted on its loan, hurt by a partnership with the failed Wall Street bank Lehman Brothers. It's been closed since 2007, when Monument Realty planned a $170 million renovation.

The 251-room, 12-story hotel, built in 1967, is part of a complex of offices and condominiums made famous not only by the scandal, but also as one of the city's most fashionable addresses.

Big-name Washingtonians such as Justice Ruth Bader Ginsburg, former Senate leader Bob Dole and former Secretary of State Condoleezza Rice have been residents of the complex. So was Monica Lewinsky, the other woman in the Bill Clinton impeachment scandal, who lived with her mother next door to Dole.

About 10 mostly local bidders put down deposits of $1 million to participate in the auction, which also attracted dozens of reporters, spectators and those in the real estate industry.

After no one bid, Charles Welch Tiedemann, a lawyer representing Monument Realty, said he wasn't surprised with the outcome, saying it was typical for real estate auctions.

"Most everyone in the room was either media or curiosity-seekers," he said.

Shankar Patel, a registered bidder and one of the directors of Your DC Hotels, a company which owns several Best Western and Comfort Inn hotels in the city, said the $25 million opening bid was too expensive for his company, but wouldn't say what he would've paid for the hotel.

"It's a good hotel, but right now, it's in bad condition," he said. In this economy, he added, "there are a lot of uncertainties."

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McClatchy Newspapers 2009

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