1 firm left in housing overhaul

Picerne buys out partner

no delay to project expected

March 15, 2002|By Rona Kobell | Rona Kobell,SUN STAFF

MC Partners, the two-company alliance the military hired last year for its $3 billion overhaul of military housing at Fort Meade, is now an army of one.

Picerne Real Estate Group made public yesterday that it bought out the interest of its financially troubled partner, the Pittsburgh-based IT Group. Now, Picerne alone will overhaul the Odenton base's housing - a project that entails demolishing more than 2,600 units and building more than 2,800 units during the next 10 years.

Charles Debelius, the project's manager and a former IT Group employee, said the change won't affect the project.

"It's easier now, actually," he said. "Before there were two cultures. Now, everyone is in the same company."

Construction is expected to cost the Rhode Island-based company about $400 million.

Picerne also will manage all the units over the project's 50-year life span, collecting soldiers' base housing allowance as rental income.

Picerne is calling its endeavor Meade-Picerne Partners LLC. Most IT Group employees working in the project's Fort Meade office now work for Picerne, Debelius said.

Picerne and its lawyers had talked to Army officials about taking over IT Group's stake in the deal since the beginning of the year, when IT began exploring its options in bankruptcy court.

Last week, a judge approved the sale of nearly all of IT Group's assets to another company.

IT Group was an attractive partner for Picerne because of its experience managing federal government contracts - something Debelius acknowledged Picerne lacks.

It also was familiar with Fort Meade, having won several environmental contracts for work at the base.

Fort Meade, which is on the Environmental Protection Agency's Superfund list of the nation's most hazardous sites, is undergoing an extensive cleanup.

Some officials thought that expertise would help the private housing partnership navigate environmental hurdles. But Fort Meade environmental engineer Jim Gebhardt said IT Group's departure wouldn't affect environmental work because most contracts are in place.

"As long as we've established those, they can't come back and do the opposite of what they say," Gebhardt said.

The Army estimates the project's value at $3 billion over 50 years by multiplying the average monthly base housing allowance ($1,143) by the number of units included in the overhaul (3,170) and adjusting the sum for inflation.

The overhaul at Fort Meade is part of the Residential Communities Initiative, a national program to improve military housing nationwide.

IT Group and Picerne beat out 16 competitors in the Army's two-year competition to win the Fort Meade contract.

Meade-Picerne expects to take over family housing at Fort Meade in May and start construction shortly after.

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