Who’s Behind $15 Million Bid?

West Heating Plant

UPDATE: GM was mistaken. While the Levy Group owns several of the buildings along Pennsylvania Ave. next to the Four Seasons, it doesn’t own the hotel, Strategic Hotels does. However the root of the prediction still holds since the Levy Group is teaming with Strategic Hotels to bid on the West Heating Plant.

Original Post:

As of last night, the standing highest bid on the West Heating Plant is over $15 million. The auction was supposed to close on February 19th, but it was always labeled a “soft close” and GSA will likely keep the bidding open until 24 hours goes by without a higher bid.

The bids are anonymous. Until last night the high bidder was “Bidder #5″ for $15 million. That was topped by a bid for $15.2. All we know is that neither is EastBanc; Anthony Lanier announced that they are no longer in the running.

GM has heard no rumors or tips as to who could be throwing around that much dough. But for the record, he is going to guess that the winning bid will come from one of two sources: the Levy Group or New York money.

The Levy Group owns the is teaming with the owners of the Four Seasons and they have been the most aggressive group pushing various ideas they’d like to implement as if they already owned it. For instance, they’ve already privately floated the idea of building a bridge across the canal to connect the two buildings (that has no chance in hell getting built).

They have the most to gain by grouping the massive West Heating Plant with the Four Seasons. They could turn it into hotel rooms or residences. They also could consider converting part of it into an indoor activity center.

And not for nothing, but they also know their way around DC politics. Anticipating the Old Georgetown Board putting its foot down on exterior changes, the Levy Group might already be planning an end-around to the Mayor’s Agent.

Other DC-based developers might be familiar enough with the lay of the regulatory/historic preservation land while lacking the potential upside that the Four Seasons connection could provide. So that’s why GM is predicting that if it’s not the Levy Group that wins the auction, it’ll be some New York-based group blissfully unaware of the unknown unknowns that this property could have in store.

So who do you think will win it? GM will reward the first person to guess correct below a free lunch at Stachowski’s.

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12 Comments

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12 responses to “Who’s Behind $15 Million Bid?

  1. Whoever has the winning bid please consider making a “Tate Modern” on the Potomac, something that will redefine the space and potentially Washington, rather than more condos.

  2. dave4al

    I’d guess MRP if it isn’t Levy. Secretly I am hoping Levy pulls it off — I think they will be at least a bit more creative and as you say can navigate the DC RE waters with an expansion of the Four Seasons property. (I would have preferred Eastbanc overall because they seem to have the best vision for Georgetown) I think an MRP would simply figure out some way to develop an office building/embassy, anything to flip it asap.

  3. I’ll go with Douglas Development, although that might not bode well for the site being developed any time soon.

  4. Walter

    The bidding on Sunday and Monday almost went to the closing time of the auction, Monday’s bid was made with about four minutes to go, resetting the clock for another day. Thus, it would seem as if bidders 2 and 5 are the only bidders still engaged, but who knows for certain.

    The property is assessed for $42 million. GSA reserves the right to reject any and all bids.

    My guess is MRP will have the top bid. Does the prize get doubled if one predicts GSA will reject all bids?

  5. Topher

    @Walter

    Dave’s already guessed MRP, but I’ll give you the “GSA doesn’t sell” ticket. Same prize though…

  6. dave4al

    Was there a “whisper number” price that folks thought this thing would go for? Gosh I hope the “GSA doesn’t sell” card doesn’t get pulled — folks are taking a good bit of risk on this property and I assume that’s why we will see such a discount to appraisal.

    Also curious if anyone has seen any possible renderings from Levy or others? This area is a bit of a dead spot but anything that can inject some life, plus open it up a bit to the creek and canal would be a nice win for the community. I’m sure the owners of those cute little rowhomes across the street are very interested.

  7. Walter

    @dave4al, the wall is considered a contributing factor to the site’s historic significance. More than that, the wall, particularly the walls on the east side, are flood prevention barriers. The site has flooded in both the historic and relatively recent past. Rock Creek, at the West Heating Plant, is still tidal Potomac, and thus subject to major Potomac flooding. A 19th Century flood on the Potomac rushed down the canal and destroyed structures on the site. A repeat during Agnes in 1972 was avoided because the National Park Service had constructed stop locks on the canal above Georgetown, to help drain some Potomac flooding out of the canal.

  8. Patrick

    In a vain effort for a Stachowski sandwich, my (completely, absolutely uninformed) guess is Vornado.

  9. Pingback: Linkage: Another Kettler Building For Arlington; First Time Buyers | Arlington DC Metro Real Estate Blog

  10. The Levy Group will win the bid….The Levy Group has Councilman (future mayor? Jack Evans in their pocket. Richard Levy was Evans’ first campaign manager. That’s my guess.

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  12. Pingback: Rumor: Levy Group Won West Heating Plant Auction | The Georgetown Metropolitan

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