Firm says sale price for Ritchie is 'fair' one

October 24, 2004|by TARA REILLY

CASCADE - The sale price of the former Fort Ritchie U.S. Army base is a "fair and reasonable" price, according to a Columbia, Md., firm hired by the PenMar Development Corp., even though the firm acknowledges it didn't appraise the property.

Lipman Frizzell & Mitchell LLC made the determination in a "fairness opinion," which is to be discussed at Monday's PenMar meeting.

The PenMar board chose to have the fairness opinion instead of an appraisal on a recommendation from its lawyer, Timothy Chriss, PenMar officials said last week. That decision has drawn some criticism from PenMar officials and Cascade-area residents, who wanted to know how much the base is worth before it's sold.


In July, PenMar agreed to sell the base to Corporate Office Properties Trust (COPT) of Columbia, Md., for $9 million. That price will drop to $5 million if COPT creates 1,400 jobs over several years.

COPT also must contribute at least $7.5 million toward base upgrades, such as improving the roads and sewer system.

The report from Lipman Frizzell & Mitchell states that the fairness opinion is not an appraisal of value of the base. The firm states that a fairness opinion is designed to examine the fairness of a proposed transaction.

The fairness opinion took into account the property's characteristics, including "location and condition of the property; purchase price, timing and other terms" and "the experience, status and motivation of the buyer to convert the property to an income-producing investment," while deciding that the price and overall sale is fair and reasonable.

The opinion states that Lipman Frizzell & Mitchell found that the sale price of Fort Ritchie is in the range of other similar sales.

"For a transaction to be fair, it only needs to fall in a range of fair market value, which may mean that the price that a seller may receive may not be the highest price," the opinion states.

PenMar also is expected to discuss COPT's plan to revitalize the base by turning into a residential, community and commercial center Monday at its 7:30 a.m. meeting at Lakeside Hall at the base.

Most of that discussion is expected to take place in closed session, PenMar board Chairman George Griffin said Friday.

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