Parties: Business affiliations didn't aid in Ritchie deal

October 29, 2004|by TARA REILLY

CASCADE - The real estate consulting company that decided the sale of the former Fort Ritchie U.S. Army base was "fair and reasonable" lists as its clients the developer buying the property and the law firm representing the seller, the PenMar Development Corp.

The firm, Lipman Frizzell & Mitchell LLC, also operates out of the same building as the developer, Corporate Office Properties Trust (COPT). The Gordon, Feinblatt, Rothman, Hoffberger & Hollander law firm, for whom PenMar lawyer Timothy Chriss works, also is listed as a client of Lipman Frizzell & Mitchell.

M. Ronald Lipman, of Lipman Frizzell & Mitchell, and Randall Griffin, president and chief operating officer of COPT, said in interviews Thursday that the business relationships among the companies had no bearing on the outcome of the real estate company's "fair and reasonable" determination.


They also dismissed that the relationships might give off an appearance of a conflict of interest.

"There's absolutely no conflict of interest," Lipman said.

PenMar hired Lipman Frizzell & Mitchell to write a fairness opinion on the sale of the approximately 630-acre base to COPT for $9 million. That price would drop to $5 million if COPT creates 1,400 jobs over several years.

COPT plans to turn the base into a mix of residential and commercial uses. The Army first must transfer the land to PenMar before PenMar can sell it.

Lipman Frizzell & Mitchell was charged with ruling whether the sale of the base was "fair and reasonable" without performing an appraisal of the property.

The state created PenMar in 1997 to redevelop the former base, which the Army shut down in 1998.

Lipman said that Lipman Frizzell & Mitchell is the largest company of its kind in the Baltimore/Washington area and has a number of clients. He faxed a list containing more than 400 clients to The Herald-Mail on Thursday.

"Half of the business world and all of the large law firms are also listed," Lipman said.

Lipman said he felt the company was getting caught up in internal PenMar "bad blood."

"It's obvious that there's some bad blood ... and it's coming out now," Lipman said. "This is a silly thing."

PenMar board Chairman George Griffin, who is not related to Randall Griffin, said Thursday that the PenMar board had discussed whether hiring Lipman Frizzell & Mitchell would be a conflict of interest and that "the answer was no."

He said he couldn't remember who had told the board that hiring Lipman wouldn't be a conflict of interest.

"Just because two offices are in the same building doesn't mean anything to me," George Griffin said. "We have gone out of our way to make sure we don't have any conflicts of interest."

Lipman Frizzell & Mitchell's fairness opinion prompted PenMar board member Ron Sulchek to file an ethics complaint against the company.

Sulchek questioned whether the firm went against professional appraisal standards by determining the sale of the base was "fair and reasonable" without first performing an appraisal.

Randall Griffin said he thought the appraisal issue was being "overplayed" and that the public should focus on the base's redevelopment.

"They should look at the fact that we're willing to invest a lot of money in the property ..." he said.

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