Friday, March 28, 2008

Wheaton library eyed to solve development quandary

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Rendering courtesy of Forrester Construction Co.
Forrester Construction Co. of Rockville has been awarded the $13 million Anne Arundel Community College Careers building renovation project in Arnold. The project, to be finished in January, is to include new computer labs, video-conferencing classrooms and administrative offices for the three-story 135,000-square-foot facility that was built in 1972.
Could a shiny new county library be the answer to Wheaton’s development woes?

That’s one of the recommendations of an advisory panel of urban planning experts commissioned by the Wheaton Redevelopment Program and the Maryland-National Capital Park and Planning Commission. The six-member group called for a phased redevelopment of Wheaton’s core around the Metro as a new town center, with commercial projects clustered around a new library.

One option would be to relocate the existing Wheaton Library south from the intersection of Georgia and Arcola avenues next to the Metro station and combine it with a possible multi-purpose county facility that would also replace the Mid-County Regional Services Center at Reedie Drive, said Robert Klein, director of Wheaton’s redevelopment program. The idea is to create a central focus for downtown Wheaton, giving residents and visitors a starting point for other errands and activities.

‘‘It’s one of these potentials that can really capture the spirit of the community,” Klein said. ‘‘If you’ve been to the new Rockville downtown, you can see that. ... Another model is downtown Bethesda. It’s not a county facility, but the Barnes and Noble serves that function. It serves as a community meeting place. Everybody knows it. They meet there to go shopping or go to dinner or a movie.”

The concept could help create a center of gravity for development in Wheaton, where Bozzuto Development Co. of Greenbelt has struggled to find a lead tenant for Metro Plaza at Wheaton Square, a planned two-building mixed-use project that could be as large as 575,000 square feet with office and possible residential or hotel space. In the past, county officials have floated the notion of placing public offices there.

The library would be an add-on project to the Bozzuto complex, Klein said.

But Bozzuto is not looking for a county tenant to serve as an anchor at its Metro Plaza, said Toby Bozzuto, executive vice president.

‘‘We remain focused on finding a lead commercial tenant as a catalyst to move forward with the office building,” he said. ‘‘Once we find that, we can move forward with the residential component. ... As soon as we land a lead tenant — which the county has been very helpful with — we will be off to the races.”

Bozzuto said that no one imagines the county taking a lead tenant spot for $30 per square foot at Metro Plaza, which would be built over the Metro bus bay site at Veirs Mill Road and Georgia Avenue. He said his company supports the library move and any effort to expand use of public space.

‘‘We all want to create a sense of space here instead of just an office building or just a residential building,” he said.

Moving the library is just the latest in a series of ideas floated that would involve building major county facilities in Wheaton. In recent years, there also has been talk of relocating the Parks and Planning offices or the county schools headquarters to the Reedie Drive site.

Monterey apartmentssold — again

Federal Capital Partners of Washington, D.C., and Angelo, Gordon & Co. of New York paid $97 million to acquire the financially troubled Monterey apartments in Rockville, which displaced scores of tenants in a failed condo conversion last year, the companies announced.

The deal brings a fourth owner to the complex in three years with plans to drop the condo conversion and run the 432-unit complex as an apartment building. Federal Capital plans to pump $17 million into the project, completing the modernization of the 41-year old apartments as Class-A rental units, said Lacy Rice, a managing partner with the firm.

‘‘The Monterey is an outstanding asset in a proven location,” he said. ‘‘Access to capital and experience repositioning high-rise apartments allowed us to structure a deal that appealed to the senior lender, the mezzanine lender, and contractors left stranded by a failed condo conversion. It helped that none of the apartments ever sold as condominiums and that a substantial part of the property was renovated to Class-A condo standards.”

Over the next year, Federal Capital will complete the renovations, including granite countertops, wood flooring, stainless appliances and other luxury finishes. The property is 45 percent occupied. The remaining 55 percent of the apartments are in various stages of renovation.

The Monterey sale continues the bailout of ailing CBRE Realty Finance of New York, which told the Securities and Exchange Commission that its return to financial stability would be helped by its sale of the Monterey and Rodgers Forge in Towson. The financing company foreclosed on both condo conversion projects last year after Annapolis developer Triton Real Estate Partners defaulted on loans extended by CBRE. A third project in Annapolis was sold at auction.

‘‘With the reduction in our short-term debt and the sale of Rodgers Forge and the resolution of Monterey in progress, we will be able to focus on our core business and will be better positioned to navigate the turbulent conditions that currently exist in our marketplace,” CBRE CEO Kenneth Witkin told the SEC in its quarterly earnings statement March 13.

CBRE originally announced in August that it would continue the conversion Triton started but abandoned those plans by December, as the region’s condo market collapsed and many condo projects were dropped in favor of apartment construction.

In 2005, Triton bought the Monterey, formerly known as the Pavilion, for $117 million from Home Properties of Rochester, N.Y., and announced plans to convert the apartments to condominiums. When Triton defaulted, CBRE bought the Monterey for $100 and assumed $150 million in debt.

The Pavilion, at 5901 Montrose Road, had served as a naturally occurring retirement community because its low rents attracted numerous seniors and disabled tenants.

Approval expected forAvalon Bay project

The Montgomery County Planning Board is expected to approve an amendment to the 1990 Sector Plan for the Wheaton Central Business District that would allow the mixed-use development of Avalon Bay on the site of the current BB&T bank building north of downtown.

The board conducted a hearing Thursday on the amendment, suggested by Chairman Royce Hanson, which would expand the district to include the BB&T property. Under existing zoning, the County Council blocked the Avalon Bay plan last year because the site did not allow for residential development, as planned under the Avalon Bay proposal.

County planning staff recommended approval of the amendment, which would avoid debate over using a zoning text amendment to solve the problem. Under central business district zoning, the Avalon Bay site would be classified as a PD-88 mixed-use project.

‘‘That would enable Avalon Bay to go forward and it would not run afoul of the zoning text amendment process that has been a problem post-Clarksburg,” Klein said.

County officials have grown wary of using zoning text amendments in the wake of public outrage over County Council approval of amendments that allowed Clarksburg developers to make project changes inconsistent with the master plan, a process the Montgomery County Civic Federation has denounced as ‘‘designer legislation.”

Staff Writer Contessa Crisostomo contributed to this report.

Commercial real estate news items may be mailed to: Steve Monroe, The Business Gazette, 9030 Comprint Court, Gaithersburg, MD 20877; e-mailed to smonroe@gazette.net; or faxed to301-670-7183.

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