Purchase of post tied to job creation

A Columbia office developer will pay from $5 million to $9 million for the former Fort Ritchie Army post in Western Maryland, raising criticism about the price and process.

PenMar Development Corp. released yesterday the terms of a contract signed Monday to sell the approximately 600-acre property in the mountains of Washington County to Corporate Office Properties Trust.


The final price depends on the number of jobs that will be created.

In addition, the deal requires the company to spend $7.5 million on infrastructure and other improvements, though Corporate Office Properties says it expects to shell out tens of millions of dollars. The company has not revealed its plans for the site, but the contract says its intention is a mix of offices, commercial buildings, retail, homes and public open space.


"I think we're giving away the store," said Ron Sulchek, a certified public accountant and one of two on the 10-member PenMar board who voted against the deal.

Sulchek and a community activist also said they have grave misgivings about how the contract was awarded.

Karl Weissenbach, director of the Cascade Committee, a community group-turned-watchdog, said: "It just reinforces my position that PenMar should have gone through the competitive bidding process as they said they would."

Fort Ritchie - in Cascade, less than a mile shy of the Pennsylvania border - closed in 1998 and has been largely empty since. The deal's supporters say it will bring needed jobs and help the area's economy.

"This should not only bring the base back to life, ... but it should go way beyond the base in many ways," said George G. B. Griffin, board chairman of PenMar, a quasi-public agency that was created to revive the site. "I would expect that the area around Fort Ritchie would benefit hugely from these plans."

The contract notes that the sale is contingent on an appraisal confirming that the price is "fair and reasonable," but Sulchek said it would have been more appropriate to get an appraisal first.

He's also concerned that the language offers PenMar only "minimal" oversight to ensure that the development plan is followed, that all the infrastructure is brought up to par and that employment materializes.

Sulchek sees the deal as a $5 million sale with penalty of up to $4 million if the developer fails to create many jobs. Randall M. Griffin, president and chief operating officer of Corporate Office Properties, who is not related to the PenMar chairman, looks at it as a $9 million sale with incentives to make sure those jobs are produced.


The contract links price to employment created on the property within nine years. The company would get a reduction of $750,000 for 350 jobs, $2.75 million for 1,050 jobs and $4 million for 1,400 jobs.

PenMar says about 1,200 post jobs were lost when the post closed, and an additional 350 or so jobs in the community disappeared as well. Corporate Office Properties expects its work will produce far more employment than that, which means it would get the full incentive.

It could also get a $1 million break on the purchase price if the annual property tax for the land and improvements tops $500,000 - but its total bill for the former post cannot drop below $5 million.

Either side could back out of the deal until late October.

Randall Griffin said PenMar has estimated the site improvement costs at $20 million to $30 million, from fixing substandard roads to replacing aging utilities. He said his company has agreed to take that on.

Corporate Office Properties settled on a purchase price that would allow it to offer competitive rental rates for the area, he added. If the rents are too high, he said, "nothing happens."


"When [critics] say this property was a steal, I don't think they should make that judgment until they see the reality unfold," he said.

A large part of the company's office projects are leased to the government and its contractors, particularly the secretive intelligence community. George Griffin said Corporate Office Properties told PenMar that Fort Ritchie looked like an "ideal" place for several federal agencies in need of space - but because of national security rules, "they couldn't tell us who they were."

Aris Melissaratos, the state's secretary of economic development, said he fully expects to see a federal agency there "that needs to do something remote."

He is delighted that the post will finally be put back to use.

"The price of the land, to me, is immaterial compared to the plan that they've got," he said. "I think this developer is the right developer for the fort."