U.S. Army will not conduct environmental survey of former Fort Ritchie Army base

July 27, 2012|By JULIE E. GREENE |

CASCADE, Md. — An environmental attorney for the U.S. Army said Friday the Army will not conduct an environmental survey of the former Fort Ritchie Army base at Cascade because the property has been transferred back to PenMar Development Corp.

Such studies can be expensive and the Army didn’t start the study because Army officials knew PenMar and the property’s former owner, Corporate Office Properties Trust, were in negotiations, said David Howlett, an environmental lawyer for the U.S. Army Legal Services Agency’s environmental law division at Fort Belvoir, Va.

While Army officials didn’t know the details of the negotiations, officials with Corporate Office Properties Trust (COPT) said they weren’t going to be able to do what they had planned with the 591-acre property, Howlett said.

An official with Columbia, Md.-based COPT said Friday it was “disappointing” COPT wasn’t able to develop the former Army base and cited a 2005 lawsuit and the economic downturn as “prohibitors from us being successful.”

“It’s disappointing for us as a company to not be able to do what we came in and said we were going to do,” said Bill Hofmann, who served as COPT’s senior property manager for the former Army base property.

COPT bought the property from PenMar in 2006, paying $5 million up front. COPT was to pay up to $4 million more with the possibility of that amount being reduced if COPT could generate a certain number of jobs by 2016. But with the development stalled, PenMar transferred the property back to PenMar on Tuesday. COPT paid PenMar $2 million and PenMar forgave the remaining $2 million, PenMar Executive Director Dori Nipps said earlier this week.

COPT’s planned development for the former Army base included 1.7 million square feet of office space, and 673 homes and apartments.

That plan prompted a 2005 lawsuit by Jim Lemon and Robin Biser, who owned property in Cascade at the time. Lemon still owns property in Cascade, according to the Maryland Department of Assessments and Taxation’s website. Biser said she sold her Cascade home. Lemon and Biser alleged in the lawsuit that COPT’s plan called for more development than the scenarios the Army evaluated in its 1998 Environmental Impact Statement. They also claimed the plan introduced historical and water-related impacts not evaluated in the 1998 statement.

According to a November 2011 court filing online, the parties agreed to dismiss the lawsuit with certain conditions. The parties agreed no “new construction” would occur at the former Fort Ritchie until 60 days after the Army issued a record of decision from a Supplemental Environmental Impact Statement the Army would conduct of the property, according to the court filing.

It’s that environmental survey that Howlett said Friday the Army no longer was planning to do.

Whether that additional environmental survey will be needed depends on the lawsuit’s plaintiffs and PenMar’s plans for the property, Howlett said.

Nipps said earlier this week that PenMar officials expect the lawsuit to be dismissed because PenMar “does not have a desire to move forward” with COPT’s development plan. Representatives of businesses interested in leasing space at the former Army base will visit the property in the next several weeks, Nipps said.

Hofmann said COPT officials did not try to sell the property privately.

“It was in the best interest of the community and the potential for redevelopment for us to go back to the folks who had it in the first place,” Hofmann said of COPT transferring the property back to PenMar. PenMar is a nonprofit, independent state agency.

Earlier this week, Nipps said COPT officials were contemplating shutting down the property, which would have led to approximately 200 residential tenants on the property being evicted, and would have prevented community members from using the lakes and grounds, except for the Fort Ritchie Community Center.

Asked about the possibility of shutting down the property, COPT spokeswoman Stephanie Krewson said COPT “would have done what was prudent to minimize the cost of ownership,” but she didn’t know if that included shutting down the property.

“But, that would have been in our right,” Krewson said.

Krewson said COPT’s original plans for the property were “effectively scuttled” by the Lemon-Biser lawsuit.

“It just didn’t make sense for us to own it anymore,” she said.

Hofmann said COPT had parties interested in moving to the former Army base when COPT first entered into an agreement with PenMar in 2004 and that interest continued through the land purchase in 2006 and “through about 2010.”

Interest in the property was more robust in the mid-2000s, Hofmann said. Parties considering the property were primarily government contractors or they wanted to be part of COPT and then-COPT Chief Executive Officer Rand Griffin’s vision for the property, Hofmann said.

In 2010, interest in the property pulled back a bit, Hofmann said.

He attributed that to the judge’s stop-work order, which came in November 2009, and the economic downturn.

“It’s hard to talk to a potential customer if you can’t follow through with the product. It just doesn’t make sense to go courting customers if you can’t deliver,” Hofmann said.

Hofmann said he didn’t think the Army’s disclosure in February 2011 that it had tested tactical herbicides, such as Agent Orange, on the property in the 1960s had any influence on parties’ interest in the property.

Once the lawsuit goes away, Hofmann said, he thinks development prospects for the property will be good.

COPT’s senior management — COPT serves as landlord for office space — thinks the economy has bottomed out, Krewson said. But senior management can’t say when the economy will pick up, she said.

COPT notified its investors that the company did not expect to recover its $28 million investment in the former Fort Ritchie and, in the first quarter of 2011, wrote its value down to zero. Krewson said Friday that COPT’s total investment in the property was approximately $30 million.

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