Rouse facing possibility of losing location

Headquarters building at issue in lease dispute

`This is such a shock'

Company missed deadline for renewal of agreement

Columbia

October 02, 2003|By Laura Cadiz | Laura Cadiz,SUN STAFF

The Rouse Co., which built Columbia, and whose headquarters is a centerpiece of the planned community's downtown, may be leaving its lakefront location after failing to renew its lease - a possibility that has local leaders in shock.

The company has been a dominant presence for more than 30 years, operating out of its large white building - designed by architect Frank Gehry - with a sprawling terrace overlooking Lake Kittamaqundi.

Rouse, which is a major shopping center developer nationwide, has leased the space since 1974 but is fighting with its landlord about whether the contract was renewed properly.

A Baltimore County judge's recent ruling that the company's lease will end March 31 has left community leaders hoping that Rouse will not leave town.

"This is such a shock I don't know how to organize my thoughts," said Del. Elizabeth Bobo, a Columbia Democrat.

Rouse has leased its headquarters from American Real Estate Limited Partnership for an annual rate of nearly $750,000. The development company had the option to renew the lease for three successive 10-year terms at $320,000 a year and was required to notify its landlord that it planned to renew by Dec. 31.

But Rouse did not send notice about renewing the lease until March, the complaint said. American Real Estate, based in Mount Kisco, N.Y., filed the case in May in Baltimore County Circuit Court. It was not clear yesterday why the complaint was filed in that jurisdiction.

The landlord sought a declaratory judgment that Rouse did not have the right to renew the lease. On Sept. 17, Judge John F. Fader II sided with American Real Estate, ruling that the lease would be terminated in March. "Facts are not in dispute," he wrote. "The resolution of this issue of interpretation of a written contract is a question of law."

Rouse filed an appeal Sept. 25. American Real Estate indicated that it would seek a new tenant by March 31.

American Real Estate and Rouse declined to comment on the matter yesterday.

Columbia leaders were in disbelief that the company might leave its headquarters, which was widely assumed to have been owned by Rouse.

"The Rouse Co. did just marvelous things for Howard County," Bobo said. "I don't think there's any question about it. If they're appealing it, then that sounds like they want to stay. I have virtually no doubt that if the Rouse Co. wants to stay in Howard County, then they can stay."

Despite the lapsed lease, Richard W. Story, chief executive of Howard County's Economic Development Authority, said he would be "very, very surprised" if Rouse left Columbia.

"I think they are entrenched in this community, corporately and personally, and they have a huge investment here, and they have done nothing that would indicate there's a change in their course," Story said. "They are part of the fabric of what Columbia is."

The Rouse Co., once headed by Columbia founder James W. Rouse, who died in 1996, operates about 150 properties that include retail, office, research and development, industrial and hotels. Among its retail properties are Baltimore's Harborplace, Boston's Faneuil Hall Marketplace, New York's South Street Seaport and Pioneer Place in Portland, Ore.

The company's most prized development is Columbia, the 36-year-old town that is run by the Columbia Association. With a population of 96,000, it has become a model for other planned communities - designed as a place where people of all economic and racial backgrounds would live together.

Rouse is developing other towns, including 67,000-resident Summerlin in Nevada. It owns 8,060 acres near Houston for future development

Some residents have speculated that Rouse would eventually leave Columbia to focus on developing another community. But they agreed that such a move would leave a void.

"They've done a lot of good things to the community," said Miles Coffman, chairman of the Columbia Council.

Sun staff writer Andrew A. Green contributed to this article.

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