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PenMar board 'vindicated' by fairness opinion

August 23, 2005|by TARA REILLY

tarar@herald-mail.com

The chairman of PenMar Development Corp.'s board of directors said Monday a cloud that had been hanging over the state-created agency has lifted.

Chairman George G.B. Griffin said he thought an Aug. 19 letter from the Maryland attorney general's office "vindicated" the PenMar board's handling of the proposed sale of the former Fort Ritchie U.S. Army base.

"I'm relieved and glad that the board has been vindicated in its stand, and this little cloud has been lifted," he said. "So, we can ... continue to go forward."

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The letter, in response to a request from two U.S. senators, stated PenMar was not required to have the former base appraised when it agreed in July 2004 to sell it to Corporate Office Properties Trust (COPT) of Columbia, Md., for $9 million.

Instead, PenMar chose to have a "fairness opinion" of the sale completed. The fairness opinion stated the sale price was fair and reasonable, despite the lack of an appraisal.

The letter states that PenMar's charge from the state was to create jobs, not to sell the base for the highest price. The letter, however, stated that PenMar should have the base appraised or sell it through a competitive bid process should the sale with COPT fall through.

The attorney general's office said knowing the market value of the base would help PenMar bargain with a developer or purchaser.

U.S. Sens. Barbara Mikulski and Paul Sarbanes asked the attorney general's office to review the actions surrounding the sale after being contacted by people who had concerns about the sale and sale price.

Randall M. Griffin, COPT president and CEO, said Monday the letter made it clear that PenMar's role is to create jobs.

"It indicates that the board did what they were supposed to be doing," PenMar Executive Director Rich Rook said Friday. "It really vindicates what the board did."

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