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New urban design guidelines for Twinbrook in Rockville provide enough density for redevelopment of the massive federal Department of Health and Human Services Parklawn building as a mixed-use project whether the agency stays or leaves.

The 18-story building — where the General Services Administration has extended its lease for HHS as it considers a possible relocation — could shrink to no more than 12 stories under the Urban Design Guidelines for the Twinbrook Sector Plan released last week by the Montgomery County Planning Board. The recommended height of the tallest buildings near the Metro stop would be capped at 143 feet, compared with the current 160 feet at 5600 Fishers Lane, Parklawn's address.

But that is plenty of room to accommodate HHS, which no longer needs the 1.34 million-plus square feet of available space in the 40-year-old building. Somerset Development is planning a mixed-used complex that would include office, retail and residential space.

"For new development, the height and density guidelines are enough," said Greg Trimmer, senior vice president of the JBG Cos. of Chevy Chase, which is a development partner with Parklawn owner Somerset Development, based in Lakewood, N.J.

"The county's been great to work with in tackling the renovation of the Parklawn building to keep HHS as a tenant."

"Thanks to hard work on the part of all involved parties, we are extremely pleased that the rezoning recommendations for the Twinbrook Sector Plan Amendment have been enacted," Ralph Zucker, Somerset Development president, said in a press release. "Our client can now begin the task of providing the City of Rockville with a dynamic destination location that services a wide range of needs amongst residents, visitors, business owners and users alike."

The GSA's optional five-year lease extension through the summer of 2014 is for 801,550 square feet for about 3,000 employees. GSA's search for new space has set off a round of competition to keep those federal workers either at Parklawn, elsewhere in Montgomery or in neighboring Prince George's County.

GSA is looking for about 1 million square feet of space.

The stakes are huge, rippling through the local economy. The contract for custodial work alone awarded last December was for more than $11.2 million for five years.

Somerset has said it is prepared to invest $100 million to renovate and upgrade the E-shaped Parklawn building to keep HHS as part of a 22-acre mixed-use development that will include residential, retail and office space. The new Twinbrook guidelines would allow that to move forward at the Parklawn site, which was previously zoned strictly for office use.

Somerset is working on the redevelopment with its corporate parent, Cammeby's International of New York, which bought Parklawn in 2003 for $162 million.

County planners envision the Parklawn complex as part of a densely developed urban center surrounding the Twinbrook Metro station. The guidelines call for a Technology Employment Area along Fishers Lane and Parklawn Drive including the Somerset property, with mixed uses featuring advanced technology and biotechnology activities.

The Core Area would include a mix of residential, office and retail uses closest to the Metro station, much of which lies within the Rockville city limits. A light industrial area would support a mix of goods and service industries located around Carroll and Wilkins avenues.

The Planning Board's guidelines are not regulations but are intended to help shape implementation of the Twinbrook Sector Plan. The 50-page guidelines spell out preferences for pedestrian-friendly roads and street parking and set a mandatory silver certification requirement under the U.S. Green Building Council's Leadership in Energy and Environmental Design program.

But the guidelines should give Somerset room to maneuver to move forward with its redevelopment of Parklawn, which would involve building on two parking lots. The guidelines would allow enough development to include recover costs of the HHS lease requirements and profits would not be eaten away by the county's new rural preservation program that requires developers to buy credits in return for denser urban zoning, Trimmer said.

St. John Properties plans office park in Sykesville

St. John Properties of Baltimore has bought a 40-acre tract of land in Sykesville where it plans a 215,000-square-foot, mixed-use business community.

The Carroll County property, currently home to the Freedom Golf Center, sits near the intersection of Routes 32 and 26. Groundbreaking for the project, named Liberty Exchange, is to occur early in 2010.

Upon completion, Liberty Exchange will be a corporate campus comprising 10 buildings, offering about 165,000 square feet of office and research and development/flex space, plus retail space that will primarily service the tenants and employees of the business community.

This represents the first venture into the Carroll County marketplace for St. John Properties, which owns more than 14 million square feet of space around the Baltimore-Washington metropolitan area.

"We are extremely confident in our ability to successfully lease all three product types in this section of Carroll County in an accelerated time frame," Jerry Wit, St. John's senior vice president for marketing, said in a statement. "Our research shows an ever-increasing demand among Class A office users, our R&D buildings are perfectly suited for both small and medium-sized firms with flexible needs, and we believe we can attract interest in new retailers looking to tap into the Carroll County market."

Shephard Exposition Services relocates in Baltimore

Shephard Exposition Services is relocating its Baltimore office to Hollins End Corporate Park East, according to Colliers Pinkard, which represented the Atlanta company.

The company, which assists with convention and other show management, signed a lease for 56,182 square feet at 4710 Trident Court. That will double its existing space at 2801 W. Patapsco Ave.

Silver Spring high-rise OK'd, with conditions

Developers of a new Class A office building planned for a Georgia Avenue parking lot will also provide more than $500,000 toward an urban park or another public-use space elsewhere in downtown Silver Spring because the project will not meet minimum on-site public-use space requirements.

Last month, the Montgomery County Planning Board approved the project plan for 8621 Georgia Ave., a 13-story, 190,000-square-foot office building that would include two street-level retail storefronts. The building will be constructed on a parking lot adjacent to a property owned by Lee Development Group.

"As you move down to the core of the [Silver Spring Central Business District], this area of Georgia has this missing tooth," Trini Rodriguez a principal at the project's architect, Parker Rodriguez of Alexandria, Va., said of the parking lot. "This project will greatly improve that condition."

The developer, Willco Cos. of Potomac, initially wanted the building set back from Georgia Avenue, but planners wanted it moved forward to align with the other buildings along Georgia. As a result, developers had to include less public-use space than originally planned.

Under the zoning requirements along that portion of Georgia Avenue, at least 20 percent of the net lot area must be public-use space, which is space that is provided by a developer but open to the public. The 8621 Georgia Ave. project will offer only 1,760 square feet of public-use space, or 5.8 percent of the net lot area.

To make up for the difference, the developer will contribute to a public-amenity fund that is used to pay for other public-use projects within the same central-business district. The payment is calculated based on the assessed land value of the project site — about $3 million — and the difference between the actual public-use space planned and the minimum space required on site.

Clark Construction unit snags $431M Calif. hospital project

Bethesda's Clark Construction announced that its Clark Design/Build of California unit has been awarded a $431 million hospital project in Oakland, Calif.

A team led by Clark will oversee the Highland Hospital Acute Tower Replacement project by Alameda County. The deal includes construction of replacement facilities to be completed in three phases over seven years, making it the largest health care investment in the county's history, according to company information.

Freeman Cos. announces $17M Olney plaza plan

Carl M. Freeman Cos. of Olney has announced that grocer Harris Teeter will anchor its Olney Town Center shopping plaza, which will have a major $17 million renovation.

The plaza, which will be renamed Fair Hill, is to be redeveloped into a 110,500-square-foot retail center starting early next year, with completion expected by the fall of 2011.

Other new tenants will include Greene Turtle Sports Bar and Grille, a 7,000-square-foot casual restaurant with indoor and outdoor seating, and Fancier Nails and Spa, a 1,600-square-foot salon.

Rockville's Patriot wins rights to Laurel project

Patriot Realty of Rockville has won exclusive negotiating rights to develop a transit-oriented development at the Laurel MARC Station.

The award moves this planned Smart Growth development one more step forward in creating a mixed-use project that will provide retail, office and residential space around one of the busiest transit stations along the MARC Camden line, according to state transportation department information.

"By creating development and density around established transit stations, we can improve the adjacent communities, increase transit use and create a better environment by reducing the number of cars on the road," said Transportation Secretary Beverley K. Swaim-Staley in a statement.

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 to 301-670-7183.

Staff Writer Jason Tomassini contributed to this report.