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Do you remember when a developer sued the District over not being chosen to build the mixed-use complex over the Petworth Avenue Metro station? No? We didn’t either—but a firm called Urban Development Solutions (UDS) did, and finally lost their case just last week.
The story begins back in 2003, when the city issued a request for proposal to build a large retail/residential complex at Georgia Avenue and Quincy Streets. UDS submitted a bid, along with Donatelli and Klein. After a lengthy selection process, Donatelli won out.
UDS, however, wasn’t taking no for an answer: The firm filed a formal complaint, accusing the District of “rigging the award process” and acting “fraudulently, collusively, in bad faith, and arbitrarily and capriciously.” Furthermore, UDS alleged, the city had conspired “to damage UDS…and to deprive UDS of the award to which it was entitled.” Finally, the firm sought lost profits of $15 million, plus another couple hundred thousand in bid preparation and legal expenses.
The court first ruled against UDS, on the grounds that the selection committee’s decision was immune to challenge. But UDS again appealed, and the District conceded that it wasn’t totally immune to challenge. Rather, it was entitled to judgment as a “matter of law,” if no serious factual dispute existed. To win on appeal, though, UDS would have to come up with “irrefragable proof” that the city had acted in bad faith. The closest that UDS got to such proof was a veiled accusation that the Mayor had intervened on Donatelli’s behalf, through officials in the Office of Planning and Economic Development. UDS Managing Member Norman Beeke testified:
Well, we know from Des Bracey‘s testimony that his office was next to Steve Green, and we know that Steve Green is close to the Mayor,” said “We’ve established that. And I think that the evidence — I wouldn’t call it necessarily evidence but the circumstantial evidence that we have would be that it’s entirely possible that Mr. Green, at the behest of the Mayor, asked Mr. Bracey to do certain things in relationship to this award.
Five years after Donatelli broke ground on the project, which now sits waiting for residents and retailers to occupy, UDS’ case was rejected on appeal—a lot more money down the drain than if they’d taken their loss and moved on.