By Lisa Rein | Staff Writer

The sale of the Water­gate Hotel, which is in fore­clo­sure, seems as star-crossed as ever

In Decem­ber, it looked as if Mon­u­ment Realty was on track to buy the hotel back from the bank that fore­closed on it last sum­mer. The D.C. devel­oper planned to restore the 251-room Wash­ing­ton land­mark to a lux­ury hotel and was in talks with sev­eral poten­tial operators.

But a legal bat­tle over the valu­able park­ing garage under the hotel has derailed that deal — and threat­ens to throw a wrench in any sale to other poten­tial buyers.

PB Cap­i­tal, the German-owned bank that held the loan and took the hotel back at a fore­clo­sure auc­tion in July after no bid­ders came for­ward, is in a legal bat­tle with the neigh­bor­ing Water­gate East coop­er­a­tive over whether and for how much the bank can con­tinue leas­ing the garage and meet­ing space from the co-op.

And Mon­u­ment, although it no longer owns the land­mark over­look­ing the Potomac River, is ask­ing a D.C. Supe­rior Court judge for per­mis­sion to file a claim against Water­gate East, seek­ing $20 mil­lion in damages.

Unless the law­suits are set­tled, own­er­ship of the hotel — part of a com­plex made famous by the bur­glary that led to Pres­i­dent Richard M. Nixon’s res­ig­na­tion — is likely to remain in limbo for months.