Civic Association Newsletter

September/October 1996 - Volume 20, No. 1


The Association has received a number of inquiries, comments, and expressed concerns from members about the County Board of Arlington, Virginia's recent approval of major site plan amendments for both the highrise residential and office building proposals. On August 3, 1996, the Board approved by a vote of 5-0 the proposed major site plan amendments for the office building component, and the sale of County owned land materially below County real estate assessed value.

Concerns were expressed to Executive Committee members about the County Board's approved amended Condition 60, under the 1989 Conditions for the office building site plan, which reduced the developer's required contributions to the construction of a public park at that site plan. At the County Board Meeting of August 3, 1996, the Board approved a reduced contribution of $900,000 (from $2.0 million to $1.1 million) requested by the legal representative of the developer in exchange for the bonus density approved for the Stuart Park site plan in 1987.

Also, concerns were expressed about the apparent lack of competition for the sale of County land at 4251 Wilson Boulevard and related properties, in which the County Board paid over $3.0 million in 1990, using public condemnation action to acquire this property purportedly to widen Wilson Boulevard. At the County Board Meeting of August 3, 1996, the Board approved the County Manager's recommended sale of 87.8% (13,303 of 15,148 square feet) of this land, which was previously acquired by the County Board on March 28, 1990, using condemnation actions (Case Number 89-463), for a total sales price of $3,010,250, or $194.19 per square feet of land. (This cost per square foot excludes the value of the improvements, the small building and parking lot valued at $68,700 for the two applicable Real Property Codes 14050024 and 14050026).

The properties that were approved for sale by the County Board, 4251, 4253, 4255, and 4257 Wilson Boulevard, for inclusion into the site for Stuart Park (Site Plan #256), were assessed by the County's Real Estate Assessment Office in 1996 for $970,900. At the County Board Meeting of August 3, 1996, the Board approved the sale of this land to the Paradigm Development Company for a material 85.9% reduction in price- -to only $27.45 per square foot.

Also, many members are confused or troubled by the County's explanation of how and why they sold the property so cheaply. For example, at the June 29, 1996, County Board meeting, one of the senior County staff stated "I would note that the current sale is for the residential density only. We expect to sell the commercial density as well, and we believe that the estimated value for the residential and commercial density values combined will exceed the current assessed value. Finally, we did not believe that an outside appraisal was warranted because there was a recent contract for the sale of a very comparable property which is not yet recorded. And so we cannot comment on it, but which made us believe that this was the right price."

Also, another senior staff member stated to the County Board at this meeting "I think there were some other things in 1989, there was a four party agreement as part of a 1989 site plan approval. The County was to build the right-of-way along Wilson Boulevard. The County was also to purchase another piece of property at Stuart and Wilson Boulevard. This four party agreement never was fulfilled. And the County purchased the Kolaitis piece. The improvements will be made. We have a consolidated block now. I think we're in a better position today than we were in 1989." The complete text of the staff's comments in response to Board member Eisenberg's question about the transaction follow and pertinet details from the agenda item documents.

At the County Board meeting of September 7, 1996, County Manager Anton Gardner stated, in response to former Board member Ben Winslow at public comment "That in early 1990, the County acquired land to widen Wilson Boulevard for $3 million. To date, $2,565,167, or 80 percent, has or will be recovered by the county." Also, Mr. Gardner indicated that the developers of Stafford Place, a block east of Stuart Park on Wilson Boulevard, donated $2.2 million toward purchasing this site needed to widen Wilson Boulevard. As a result, the developers were granted 55,000 additional square of office density, enabling Stafford Place to win the competition for the National Science Foundation relocation." Some of our members are troubled by Mr. Gardner's statement that the developers of Stafford Place donated these funds to the street widening of Wilson Boulevard and that some or all of the contribution wasn't applied to help offset some of the corresponding costs of the bonus density on the County's infrastructure (e.g., public utilities).

The following are some of the highlights of this major controversy that continues to attract the attention of many members of our Association and other concerned citizens in Arlington. The Association obtained permission from the Arlington Journal to run some of its letters received on the Stuart Park land sale, largely in response to County Manager Anton Gardner's letter to the Journal about the ARLINGTON JOURNAL HEADLINES story dated AUGUST 7, 1996, titled "For developer, price is right" by Robert Gehl. For our members information, the Association has also obtained permission from the Arlington Journal to reprint this most informative news story. But before beginning this story, former Board member Ben Winslow had this to say at the County Board meeting of September 7, 1996.

Ben Winslow-Former County Board Member Arlington County Board Meeting Sept. 7, 1996

"... Certain statements by the County Manager, concerning the sale of bonus density in the Stafford Square project, appear to have been reported erroneously by our local newspapers. Or else the County has changed its policy regarding developer payments for bonus density.

Payments for bonus density were originally intended to cover the costs of the additional burden on the infrastructure and services caused by the greater number of people working in the additional space. The $2 million dollars paid by the developer for the extra 55,000 square feet will barely cover the costs to the community of the 300 additional workers on that space.

The only other repository that I was ever aware of for bonus density when I was on the Board was to the housing contingency fund, and then only if low and moderate income tenants were being displaced and new housing was needed.

What was reported by the papers indicated that the payment for the increased density was made to permit a different developer three blocks away from the Stafford Square to round out the Stuart Park site for around $350,000, and then claim back $125,000 to demolish the buildings. How generous, and how charitable, and how phony. No developer in his or right mind is going to put up $2 million so that another developer can get by on the cheap. I know the County is very good at spin-doctoring events, but this is the biggest stretch since President Clinton tried to avoid the Paula Jones suit by claiming that his position as Commander-in-Chief was the same as being in uniform, giving him immunity from law suits under the Uniformed Services Act.

Not only that, but this is a real change in County policy, and it has occurred without any public discussion, and without public advertising. Just as Venus sprang fully developed from the brow of Jupiter, so do new policies spring fully developed from the mind of our erstwhile County Manager; and with equivalent results.

It would be helpful if the County could codify and make explicit all these rules and policies on bonus density, and payments for the same, and on the so-called voluntary housing contribution. Thank you for your time and attention on that issue."

Chairman Hunter: "I think it's appropriate that at this point we ask the manager to respond. This is an issue that you and I had talked about with you in the audience when we spoke about it the other day at the Civic Federation and you know how I feel so we will give you a second opinion here."

County Manager Gardner: "Thank you, Mr. Chairman. I will take a couple of minutes to go through the information regarding this transaction, which in fact was the subject of a couple of public hearings in 1989 and was done in public under the written provisions of the County's zoning ordinance. You may remember that in the 1980s at the height of the building boom, the County needed land for the widening of Wilson Boulevard between North Stuart Street and North Taylor Street. After the filing of condemnation action for the parcel needed for this purpose, the County and the owner agreed on the price of about $3 million for the parcel of land that was needed.

That parcel sales price was based on the land sale of similarly situated property in the same block. Before going to the settlement on the sale of the land, the owners of a nearby block of land, that parcel known as Stafford Place, offered to make a donation to the County towards the acquisition of the parcel needed for the widening of Wilson Boulevard. This donation was made to the County even though the land was not necessary for the Stafford Place Development. The Stafford Place owners were granted bonus office density in return for their donation of $2.2 million to acquire this parcel for the Wilson Boulevard right-of-way. This was done under a zoning ordinance provision, which provides for the award of bonus density for a contribution for required community facilities. The bonus density awarded was a significant factor in securing the decision to locate the National Science Foundation at Stafford Place.

Subsequently, after retaining the portion of the property on which Wilson Boulevard will actually be widened, the County sold a residual piece of the same parcel to Fidelio Properties. The residual piece of the parcel was sold with a limitation that it could only be used for residential purposes; and thus on that land that was sold to Fidelio as well as on the land on which Wilson Boulevard will be widened there was no office density used. No commercial density rights were transferred to the new owners and this limited the market value of the piece of land that was sold to Fidelio. The County received $365,000 in value for this piece of land, which reflected the fair market value of the residential rights that accrued to it. As a result, the County was able to acquire the land necessary for the widening of Wilson Boulevard as well as received $2.56 million in value towards the $3 million original acquisition costs of the parcel.

I think that in balance, the transaction that took place provided us with the benefits of the right-of-way needed for the widening of Wilson Boulevard. It also helped provide for the relocation of the National Science Foundation into Arlington and also then in the end helps provide for the residential property that will be built at the Stuart Park site."

Chairman Hunter: "As far as the County's investment, the County got in just five points. It got National Science Foundation, it got demolition of unsightly buildings, it got a widened Wilson Boulevard, got quality residential development on a block that has 1.1 acres of a public park, long sought by the community, and $2.565 million in cash. Case closed."

Former Board Member Ben Winslow: "I don't think it's closed sir because frankly you're putting too many eggs into one basket. That's the first thing. And the second thing this is a change in policy, then we can use bonus density to be allowed all kinds of programs. Then why don't we use bonus density to get people to pay for bonus density to handle our school construction problems? We won't have to do bond issues then. This is patently ridiculous on the face of it."

Chairman Hunter: "Appreciate your bringing the issue to our attention."


ARLINGTON JOURNAL HEADLINES AUGUST 7, 1996, For developer, price is right

By: Robert Gehl

One group calls it "charity" but Arlington County officials call it the result of doing business. The debate revolves around a new 20-story building that could mean 1,000 new jobs in the county and a lucrative new business.

In 1990, according to the county manager's office, Arlington condemned a property at 4251 Wilson Blvd. and bought it for more than $3 million, when the assessed valuation was $1,657,000.

The county, which bought the property so it could widen Wilson Boulevard, initially wanted only the 20-foot strip facing Wilson, but was forced to take the entire 15,000 square feet of the property after the former owner refused to sell it in pieces.

Six years later, this June, the County Board approved the sale of the property for $365,000, an apparent loss of more than $2.5 million. The property is currently assessed at more than $1 million.

A taxpayer-based organization, Arlington County Taxpayers Association, is calling the "buy high, sell low" tactic bad business.

Arlington County Board member Albert C. Eisenberg said a recession starting in late 1990 contributed to the difference in land values.

"We try to buy low and sell high," he said. But sometimes, when you buy before a recession and sell after, you can't help it."

Board member Christopher E. Zimmerman, who was not on the board during the 1990 purchase, said that when he voted for the sale of the property to Washington-based Paradigm Paradigm Development in June, he relied on the advice of other board members and county staff.

"I have no reason to believe they would be incorrect," he said. "If there's something substantially wrong here, I want to know about it, though."

Zimmerman said if the county is trying to entice developers to locate in Arlington by selling property to them below cost, he doesn't know about it. And Eisenberg said it just isn't done.

"This may look like something it isn't," he added. "We don't give perks like that."

When the county sold the property to Paradigm, in June, it kept the segment along Wilson Boulevard for the expected widening of the road, but 88 percent of the property was sold for almost nine times what the entire lot was bought for.

A 20-story apartment complex is planned for the site, commonly called Stuart Park. The property will be next to the 14-story office complex where it is believed LCI International, a long-distance telephone company, will locate.

The county's real estate coordinator, Tom O'Reilly, said that while assessed valuation must match market value by state law, there is always some difference.

Even with that gap, Eisenberg was unable to explain the large difference between what the county bought the property for, the assessed value of the Stuart Park property and the price the county said sold it for.

"I can't explain the differences in value except to say that people are willing to pay different amounts at different times," he said.

But Timothy Wise, president of the Arlington County Taxpayers Association, sees it differently. "It seems that our county management, including the board members, are very loose with our tax dollars, he said. "This was one sweetheart of a deal for developers, for Paradigm."

Wise's group has been protesting the issue to the County Board for months. A letter Wise said he sent the board in June questioning the sale has still gone unanswered. His newsletter, the "Watchdog," has called the issue "charity for the rich."

O'Reilly defended the sale. First, he said, the county required the property not be used for commercial buildings; it must be residential. O'Reilly said without commercial development, the value of the property drops.

He also said the county reduced the price Paradigm paid because it had to destroy existing buildings on the site and remove asbestos.


Anton S. Gardner Arlington county manager

Ballston sale a boon for taxpayers

Arlington County not only will break even but will gain financially in the future from Ballston's Stuart Park development, thanks to County Board action August 2. The inference in an August 7 article that county taxpayers are losers in any aspect of this deal could not be further from the truth.

In early 1990, the county acquired land to widen Wilson Boulevard for $3 million. To date, $2,565,167 or 80 percent, has or will be recovered by the county.

In addition, 12 percent of the land has been retained by the county to widen Wilson Boulevard. On this basis, the county has recovered 92 percent of the value of its expenditure, even though property values have declined over six years.

This is before any of the tax benefits of an estimated 2,000 new employees coming to a planned 14-story office building or the economic impact of having new Arlingtonians in the 21-story residential building on this key block in the heart of Ballston are factored into the mix.

Here are the facts:

  1. To provide for the widening of Wilson Boulevard, the county acquired this site, which includes part of the frontage along Wilson Boulevard between north Stuart and Taylor streets, for $3 million at the height of the real estate boom. The price paralleled other commercial sales in the area.

  2. The developers of Stafford Place, a block east of Stuart Park on Wilson Boulevard, donated $2.2 million toward purchasing this site needed to widen Wilson Boulevard. As a result, the developers were granted 55,000 additional square feet of office density, enabling Stafford Place to win the competition for the National Science Foundation relocation.

  3. On August 2, for $365,167, the County Board approved sale of the remaining portion of this land, not to be used in the widening of Wilson Boulevard, to Paradigm Development under conditions that limited substantially the density attributable to the site. From the start, the county's goals have been to ensure improvements on Wilson Boulevard, appropriate development on a consolidated block and creation of a large urban park as a centerpiece of Ballston development. The goals were well met by the County Board's Aug.2 action.

Robert Gehl's article failed to report most of the critical details of this site's complex history, which show the County Board's action on Aug.2 benefits taxpayers now and in the long run. Instead, readers were misled by incomplete reporting and repetition of unfounded allegations.


Tim Wise, President of the Arlington County Taxpayers Association

Ballston sale a taxpayer bust

In his April 12 letter, Arlington County Manager, Anton Gardner suggests that Arlington taxpayers will benefit from the sale of land at Ballston, because the $2.2 million that the county squeezed out of the developers of Stafford Place where the National Science Foundation resides should offset the money taxpayers lost in the Stuart Park boondoggle.

The only connection between Stafford Place and Stuart Park is the intersection they share on Wilson Boulevard.

The Arlington County Board acquired 15,148 square feet of real estate at 4251 Wilson Boulevard from Andrew M. Kolaitis, Trustee, on March 28, 1990 for $3 million. On January 1, 1990, the property had been assessed for $1.66 million by the Arlington County Real Estate Assessment Office. The Arlington County Board then agreed to sell 13,303 square feet of this property for $365,167 on June 29, 1996. The County's complete parcel had been assessed for $970,900 on January 1, 1996. The remaining 1,845 square feet will be used to widen Wilson Boulevard.

The developer won't have to pay the $365,167, however, because the County provided the developer with several offsetting credits. For example, $125,000 for demolishing the existing improvements. The bottom line is that the County will receive only $230,979, or $17.36 per square foot, compared to the $194.19 per square foot which Arlington County taxpayers paid in 1990. It's hard to see how paying $194 per square foot of real estate in 1990 and selling most of the same real estate for $17 a square foot in 1996 is a boon for the taxpayers.

The county manager asserts that property values have declined over six years. The Arlington County Taxpayers Association (ACTA) asked the Arlington County Board on June 5, 1996 for assessment ratios for properties similarly situated to Stuart Park. When County Board Chairman Jim Hunter wrote to ACTA on July 31, 1996, he provided no assessment ratios.

The County Board heard testimony about this ""buy high, sell low" tactic at both its June 4 and June 29 meetings and the offsetting densities were never discussed. Nor was the swapping of density discussed in the July 31, 1996 letter which ACTA received from the Chairman of the Arlington County Board. Moreover, there is no mention of a conveyance of density on the real estate records for any of the nine parcels which make up the Stuart Park block.

The manager also neatly forgets that in return for $2.2 million, the Stafford Place developer was allowed to build an additional 55,000 square feet ($36 per square foot) of office space, known in the trade as "bonus density." So, if the 55,000 square feet of "bonus density" given to the Stafford Place developer is supposed to be offset by an equal amount of density at Stuart Park, then the Manager is saying the developer got a lot and the taxpayers got nothing in return for the density at Stafford Place.

Perhaps the most outrageous feature of this land transaction is that County staff was unable to determine on their own the price which the County should receive for the County's portion of Stuart Park. According to information obtained through a Virginia Freedom of Information Act request, on March 15, 1996, Martin D. Walsh, a partner in the firm of Walsh, Colucci, Stackhouse, Emrich & Lubeley, provided the county staff with the methodology for determining the price the client was willing to pay for the Kolaitis parcel. Perhaps the county manager should try to explain how the county sells 13,303 square feet of the Stuart Park block to the developer for $230,979 while Crestar Bank manages to sell 10,979 square feet in the same block to the same developer for $900,000. The county manager and the County Board deserve a thump on the head if they think this is a good deal for Arlington taxpayers.


Amy Jones-Baskaran, President of the Volunteers for an Independent Arlington Coalition

Wake up and smell Arlington's dirt

The Volunteers for an Independent Arlington Coalition believes that the sale of county-owned real estate at 4251 Wilson Blvd. in Ballston is hardly a "boon" for taxpayers, as County Manager Anton Gardner stated in his Aug. 12 letter, but a boondoggle.

The county has grossly misused taxpayer money with respect to this and other real property transactions. And, observing the long pattern of this activity, county officials' excuses and rationalizations do not stand up to scrutiny. The county is actively involved with manipulating the price and availability of choice real estate in the Rosslyn-Ballston corridor for the same special-interest developers.

The county acquired the Wilson Boulevard property six years ago through a condemnation action, ostensibly to widen Wilson Boulevard. There is still no sign of any widened Wilson Boulevard (although small-business owners there were pushed out long ago). Worse, the county paid $194.19 per square foot of land, which was then 77.8 percent more than the county- assessed value of $109.32 square foot. (VIA has publicly documented numerous county purchases in which it has paid, on average 62 percent over assessed value).

Worse yet, on Aug. 3 the County Board approved the sale of this land to the Paradigm Development Co. for an outrageous 89.5 percent reduction in price-to only $27.45 per square foot, based on questionable, yet-to-be publicly recorded transaction. And even this paltry amount has been offset by county credits to the developer. We have found no evidence that the sale was advertised for competition.

County noises about property devaluation due to recession and "recovering" the loss are just that: noise to obscure the truth. How many Arlington property owners have seen near- wipeout devaluations in their own property values such as this? Not many, if any, we'd bet. Especially in prime commercial corridors. The developer-beneficiary of the county's giveaway here (Paradigm) is the same developer who, through a consistently identifiable group of individuals, has had a longstanding relationship with the County Board on other land deals, bonus density projects in exchange for subsidized rental housing, the Buckingham redevelopment project and the Quincy Street extension project. The taxpayers lose every time.

The bottom line: The county buys and sells prime real estate and creates windfall gains for old friends. Why is the county constantly speculating in real estate with taxpayer dollars and then giving the benefits to private entities? Could this pattern and practice be more obvious or disturbing? Arlington residents deserve an independent investigation of these matters as well as legislative reform of the county's land speculation practices. Wake up Arlington, and smell the dirt.


James H. Charleton, Former member of the Arlington County Planning Commission

Financial incompetence in Arlington

Please permit me to supplement your Aug.7 coverage of the Ballston land sale by commenting on just a few of the many questionable aspects of this scheme. Arlington County's "condemnation" of the land for road widening in 1990 appears to have been a sham transaction, a creative fiction to conceal the purchase's real intent. If not, where is the wider road? The County Board in effect condemned land owned by a private owner for the benefit of a third party, an act of dubious legality in this state.

And the third party was not, as in legitimate redevelopment, identified through an open-bid process but was a pre-selected set of developer interests with whom the board has had a longstanding, incestuous financial and political relationship. So much for free competition and an open market. The county evicted small businesses from the block after the 1990 purchase, paying less than $10,000 for relocation to two of those evicted. So much for economic development and a business-friendly environment.

The county then chose to let the publicly owned properties decay, becoming by 1996 the slumlord of asbestos-laden properties described in the county manager's own report as "deteriorating" and "a detriment to the neighborhood." Meanwhile, the Crestar Bank branch continued to operate.

Perhaps that was because there exists in this case a love triangle between the county, its pet developer Paradigm and Crestar Bank. The contract price of $900,000 (no deed was ever recorded) for the 10,929-square-foot property in the block was accepted by county staff as a dubious basis for setting the $365,000 pittance the county received for 13,303 square feet of its 15,158-square-foot plot. Yes, commercial density was foregone, but recall the more than $3 million paid for the 15,148 square feet six years ago.

It was outrageously inappropriate to use the Crestar Bank contract price to make this determination because, according to TRW [Redi], Crestar Bank holds a $37 million mortgage on another co-project of Arlington County and an affiliate of Paradigm Development, the Buckingham Apartment renovation. It is perhaps the most expensive speculative venture ever engaged in by a Virginia local government, and its success is secured in part by a bond issue backed by the county's "moral obligation." A more glaring interlocking set of conflicts of interests is hard to imagine.

It boggles the mind that the County Board and county manager would sign off on such an arrangement. I do not believe ignorance excuses their action. Residents have too often come before them to question and denounce such schemes, including this one.

The county simply has no business engaging in real estate speculation. The County Board's action was callous and incompetent at best, unworthy even of the School Board whose financial incompetence has been publicly noted.


Roye L. Lowery [Former Arlington County Board Member]

Condemn impatience, not property

The Arlington County manager sees economic development at Stuart Park (Letters, August 12). Tim Wise and the Arlington County Taxpayers' Association see the county being fleeced in a land deal (Letters, August 20). I see frustration and a serious question about the wisdom of using community's power of condemnation.

In the 1980s Oliver Carr proposed to redevelop a Ballston location. The project was undeniably attractive, but its execution required the acquisition of property along Wilson Boulevard. The county staff and County Board were impressed by the proposal. As part of the site plan approval, the county wanted some Wilson Boulevard frontage to widen the street. A problem arose. Carr was unable to reach agreement with Andrew Kolaitis on the value of his property. Carr also needed to acquire the property belonging to the First Federal Savings and Loan Association (now Crestar Bank), and the county needed (and still needs) a portion of that property to widen Wilson Boulevard.

Carr and the county became impatient. The possibility of condemning the Kolaitis property was raised. Carr used this threat in his negotiations with Kolaitis, and a county staff member raised this possibility in a discussion with Kolaitis, urging him to reach a conclusion with Carr. Kolaitis offered to give to the county the land it needed for street widening. In return, he wanted the county to leave negotiations for the sale of the balance of his property in the hands of Carr and himself.

Although this offer was financially attractive to the county, it was unpromising for early development of the project because Carr and Kolaitis were still far from reaching an agreement. So the county went to condemnation and acquired the Kolaitis property for $3 million. In the meantime, the real estate market was deteriorating, and Carr was no longer in a position to proceed with the development.

The result: Carr was frustrated because he was unable to proceed with his development even though his land assembly problem was solved. Kolaitis was frustrated because he lost his business and did not receive as much for his property as he thought it was worth. The county was frustrated because it used its ultimate tool to secure redevelopment of this important location, laid out money and received in exchange nothing but empty, non-taxpaying store fronts and some unpleasant newspaper publicity now that the project seems to be getting under way with a new developer. From the figures I see in The Journal, I calculate the county is down about $569,000 on the deal, the equivalent of several years of real estate taxes from the new project when it is completed.

We learn from this the county should not be impatient to achieve the redevelopment of important locations. Those locations have continuing value. The developer may wish to proceed with this project quickly, but the community's goals are long-term and do not depend on the success of any particular developer.


Timothy M. Wise [President of the Arlington County Taxpayers Association]

Arlington wisdom is in question

Although Roye Lowery, a former Arlington County Board member, brought out several new issues about this bogus land transaction at the Ballston Metro station (Letters, Aug. 29), his arithmetic is suspect.

Using figures he obtained from articles and letters in The Journal, Mr. Lowery calculated the cost to the taxpayers of the strip of land (1,845 square feet) that the county needed to widen Wilson Boulevard as $569,000. Since Mr. Lowery wrote that the previous owner offered to give the county the land to widen Wilson Boulevard, the county didn't need to shell out even the first penny of the $3 million of taxpayer money shelled out for the property.

While Mr. Lowery is correct to question the wisdom of using the government's power of condemnation, the time span involved raises doubts about his claims that the county was frustrated.

On July 28, 1987, the County Board approved a resolution to condemn a portion of 4251 Wilson Boulevard, but the Board did not file the condemnation action until May 10, 1989.

According to a July 31, 1996 letter from County Board Chairman Jim Hunter to the Arlington Taxpayers Association. "The case was settled when the County agreed to acquire the entire property rather than just the right of way." On Dec. 13, 1989, the Board approved the contract to purchase the property. During this period, wiser heads should have prevailed over frustration.

What Mr. Lowery should have questioned is the integrity of county officials. In his Aug. 12 letter to the editor, County Manager Anton Gardner asserted that the county acquired the 4251 property to widen Wilson Boulevard. However, in Mr. Lowery's letter, we learn that the previous owner was willing to give the county the land to widen Wilson Boulevard at no cost to the taxpayers.

It seems that the County Board and the county manager need to come clean on this transaction.

County Manager's Memorandum of Recommendation to the Board Dated June 12, 1996

Stuart Park Land Sale

SUBJECT: Sale of County owned property located at 4251, 4253, 4255, and 4257 Wilson Boulevard for inclusion into the site for Stuart Park.

RECOMMENDATION: Approve and ratify the attached agreement for the sale of the County owned property, subject to any changes which either clarify or improve the County's position and do not adversely affect the County's interest, as determined by the County Manager and approved by the County Attorney, and authorize the County Board Chairman to execute the deed of conveyance.

BACKGROUND: The subject property, containing 15,148 square feet of land, was acquired by the County in March 1990 to facilitate the widening of Wilson Boulevard in conjunction with development activity at the time. There is currently a pending Site Plan amendment for the adjacent Stuart Park site which incorporates that portion of the subject property that is not needed for public street and utilities purposes.

In order to facilitate the desirable development of this key block, the developer proposes to acquire, and staff supports the sale of, 13,303 square feet of land from the subject property at a price of $365,167.00. This price equates to $27.45 per square foot of land, or $9.15 per square foot of residential gross floor area (GFA), based on a 3.0 floor area ratio (FAR), which is allowed under the property's zoning classification of "C-O-A". (No commercial or office development rights are conveyed in the attached agreement.)

The agreed price for the County owned land equals the price the developer is currently paying for the residential density rights from another property in the subject block. The County will retain ownership of the area needed for the widening of Wilson Boulevard (1,845 square feet).

The developer will also be requesting additional residential GFA of 5,535 square feet, for which it will make a contribution for public improvements in the amount of $50,645.00. Should the additional density approved for the site not include all or some portion of the additional 5,535 square feet requested, the contribution amount shall be reduced at the rate of $9.15 for every square foot of the approved additional residential GFA that is less that the 5,535 square feet requested.

COMPENSATION: As payment of the purchase price for the subject property ($365,167.00) and the contribution for public improvements ($50,645.00), the developer has agreed to remove the asbestos from and demolish the buildings on the property (estimated to cost $150,000.00), construct the improvements along Wilson Boulevard which, under the previous site plan approval, were the County's responsibility (estimated to cost $125,000.00), and apply the remainder of the purchase price and the amount of the contribution for public improvements toward the County's obligation under the existing 1987 Stuart Park Site Plan (numbered Z-2181-80-6), condition #45, which requires the County to make a cash contribution of $300,000 toward the construction costs of the mid-block park improvements to be constructed at a later date.

County Board Meeting June 29, 1996, Public Comment on Stuart Park Site Plan Tim Wise: "Good afternoon County Board Members, for the record, my name is Timothy Wise, and I'm here to talk to you as the President of the Arlington County Taxpayers. On May 7, 1991, I personally received a letter from the former County Attorney Charles Flinn who responded to me and said that one of the properties that was purchased or is involved in this Stuart Park site plan, "was bought for right-of-say for additional lanes and sidewalks for Wilson Boulevard and North Stuart Street."

In the interim, the County apparently has become a co- developer, a co-owner with Paradigm Development and Fidelio Properties. Also, I want to point out that there appears to be an inherent conflict of interest involved in this and related transactions. Arlington County has had a long relationship with the contract purchaser, earlier at Courthouse Commons and recently at Buckingham. The contract purchaser at Stuart Park has also had a long history with Arlington Housing Corporation. And Arlington County also has a long history with Arlington Housing Corporation. One of the transactions involved in this incestuous triangle involved the County's purchase of the former Shell gas station at 3141 North 10th Street. This property was flipped to the County for $1,789,000 only 45 days after the seller acquired the property for $1,500,000, even though the property was assessed at that point for just a bit over $1 million.

I wrote to you on June 5th asking for answers to about five questions and have yet to receive them. But I would just like to point out that the County purchased the Kolaitis property for a little over $3 million, 6 or 7 years ago. That equates to about $1,700 approximately per square foot--$3 million divided by the 1,845 square feet that you needed for the widening of Wilson Boulevard. So for $3 million, we're getting $51,000 worth of property. Fifty-one thousand dollars equates to 1,845 square feet at $27.45 per square feet, which is in the Manager's Agenda Item 19A which points out that this is the square foot price. So to me this seems like it's a bad deal for the County all away around and I think you need to look for some ways of getting the most out of this deal that you can. Thank you."

[Following Public Comment]

Board Member Eisenberg: "Well, let's look at the numbers on the land transaction. Somebody can go back and explain the difference between what the property was worth when the original transaction was made and what it's worth today. I recall that under certain circumstances there are outside appraisers that are used."

Staff John Mausert-Mooney: "Mr. Chairman and members of the Board, let me make four general points I think that might orient us on this issue. And if there are more technical details, some of the other staff can respond. First of all, the County did purchase the land originally for over $3 million. It based that original purchase price on an independent MIA Appraisal, which is one of the most respected forms of appraisal in the appraisal industry. We did so because we believed that we had to eminently widen Wilson Boulevard. So it was driven by an eminent widening of Wilson Boulevard as we then believed.

Secondly, this was prior to the very steep decline in real estate prices in the early 1990s. And we all know and have struggled through budgetary crises, or challenges because of that. That real estate prices fell significantly. Of all the real estate categories that declined, few if any declined as much as raw land prices. They were the most severely affected and they have recovered less than other real estate categories. And if you would be interested in a more detailed report on that, we would be happy to get that. But I did discuss this very issue with Mr. Jinks last week, because of this question arising at the previous Board meeting. Thirdly, I would note that the current sale is for the residential density only. We expect to sell the commercial density as well and we believe that the estimated value for the residential and commercial density values combined will exceed the current assessed value. Finally, we did not believe that an outside appraisal was warranted because there was a recent contract for the sale of a very comparable property which is not yet recorded. And so we cannot comment on it, but which made us believe that this was the right price."

Board Member Bozman: "Where we have commercial density, in essence in reserve at this point, to whom are we going to sell it?" Mausert-Mooney: "Tom [Miller] do you want to comment on that?" Senior Staff Planner Tom Miller: "There's really no commercial density to sell."

Board Member Bozman: "I didn't understand you." [Mooney puts his hand to his head and board members appear surprised.]

Senior Staff Planner Tom Miller: "The history of this site plan was such that with four different property owners, the County in 1989 was trying to facilitate a development on this block. And to get the Wilson Boulevard improvements completed, I think one of the other important factors in this development at that time was the Stafford Place development or the National Science Foundation building. At that time there was density associated with that project that was used for a right-of-way purposes along Wilson Boulevard that was sold to the developer of that project."

Board Member Bozman: "Yes, that's right. I had forgotten."...

Staff Senior Planner Tom Miller: "I think there were some other things in 1989, there was a four party agreement as part of a 1989 site plan approval. The County was to build the right-of-way along Wilson Boulevard. The County was also to purchase another piece of property at Stuart and Wilson Boulevard. This four party agreement never was fulfilled. And the County purchased the Kolaitis piece. The improvements will be made. We have a consolidated block now. I think we're in a better position today than we were in 1989."

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