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Hi Friend, Just gonna get straight to the point here. We are sorry to report that the city could not come to terms with Landex for the purchase and development of 3200 Rhode Island Avenue at Eastern Avenue. With negotiations over, we are able to share with you some details of the talks, and of the lessons learned that will benefit the city as we move forward with developing this site. First off, we were very much in support of Landex as a developer and appreciate all the time and effort they put into these negotiations. Their support for community programing and the arts in our community is well-known. We, the city, and Landex wanted to get a deal done. So, if you’re wondering why the deal fell through after both the city and developer invested so much time and energy in the effort, here’s a very brief explanation. In short, towards the end of negotiations a financing contingency for the development was introduced that a majority of the Mayor and Council felt posed too much of a risk to the city. As you know, we have been vocal supporters of developing this project and are disappointed. That said, there are some key lessons learned that will help inform the city as we move forward. First, these negotiations took too long. The city was initially ill-prepared to deal with the complexity of a sale this size. We had to retain the services of a commercial real estate agent and attorneys to negotiate the traditional sale of land for development. All of this took way too much time and allowed outside market forces to change in a way that likely affected our negotiations. Hence, the first lesson – when the city has a chance to develop a piece of land, delay can dramatically increase risk and opportunity cost. I have heard too many remarks like, “We can wait a few more years,” and, “We are in no rush.” These statements fail to properly recognize the risk of doing nothing. Sitting on underutilized land does nothing to diversify our tax base, does not support our local businesses, and continues to make city revenue way too dependent on single-family home owners. In other words, to lessen the tax burden on residents, we must practice smart growth and diversify our tax base. The second lesson brings with it some good news. Once the team was in place – i.e., the real estate agent and lawyers, and the recent hire of an Economic Development Director with experience in Prince George’s County – the pace of negotiations quickened. With this team set, the city can be nimbler in securing smart development moving forward. Towards that end, we have directed this team to begin marketing the property and progress is being made. The Prince George’s Economic Development Council has committed to help us leverage financial resources and connect potential developers with the city, and we are preparing to attend a developers’ conference at National Harbor in early March. We are hopeful that having this team in place from marketing through negotiations will increase the likelihood that: (1) we have multiple interested developers, and (2) we waste no time getting a deal done that benefits city residents. As always, reach out any time with questions, comments, or concerns. Onwards. - Luke and Celina |
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