Without Rouse, different Columbia

Residents speculate amid flap over lease lapse

Firm might want to move west

October 03, 2003|By Laura Cadiz | Laura Cadiz,SUN STAFF

Rouse Co. is a nationally recognized developer of planned communities and shopping malls that bought 14,100 acres in Howard County more than 40 years ago to build Columbia and later went on to create Baltimore's Harborplace and Boston's Faneuil Hall Marketplace.

Yet it failed to renew the lease on its headquarters - apparently out of sheer neglect, court documents show.

Rouse claims it intended to renew the lease of its coveted Columbia office space, which was designed by architect Frank Gehry to its specifications. And if evicted, Rouse claims, the harm to its employees and the public "would be irreparable," according to the documents.

But the damage from the company's potential absence is up for debate around Columbia.

Local leaders and residents were shocked at the possibility of a Columbia without Rouse, but they also have long enjoyed a love-hate relationship with the company. After Rouse built the town 36 years ago, it became a dominant corporate presence, controlling much of the zoning and development.

"There's a tension between a corporation that has that power and sometimes has not used it to the best advantage perhaps to the overall initial concept," said Padraic M. Kennedy, the Columbia Association's first president, who served 26 years.

Residents also speculated about whether Rouse truly wanted to renew the lease or whether this was its exit strategy from Columbia - which is essentially built out - to focus on other community projects.

Rouse - a major shopping center developer nationwide - is developing the 67,000-resident Summerlin community in Nevada and owns 8,060 acres near Houston for development.

"This doesn't really surprise me because the focus of the Rouse Co. has really shifted to their development in Nevada and other developments," said Barbara Russell, who represents Oakland Mills on the Columbia Council. "They're really winding up their development in Columbia."

A Rouse spokesman said the company would not comment yesterday because the matter is in litigation. Lawyers for Rouse and its landlord, American Real Estate Limited Partnership, did not return phone calls.

The fact that Rouse did not own its signature headquarters on Lake Kittamaqundi came as a surprise to many residents.

The company had been leasing its headquarters at an annual cost of nearly $750,000 since 1974, with the option to renew the lease for three more 10-year terms at $320,000 a year.

Court documents show that Rouse apparently neglected to renew the lease, which a Baltimore County judge ruled ends March 31. In an affidavit, Jeffrey C. Palkovitz, an attorney at Rouse, stated that in 2001 he reviewed the lease and saw that the notice to renew needed to be signed by December 2002.

Palkovitz said it was not his role to renew the lease and he inquired about whose responsibility it was. He was sent to Rouse's human resources director, whom he told about the renewal deadline.

This year, on March 7, Palkovitz learned the human resources director never sent the renewal notice, and he says in the affidavit it was not that person's job. Three days later, Palkovitz sent the renewal notice himself.

But by then it was more than two months too late. In May the landlord - American Real Estate Limited Partnership, based in Mount Kisco, N.Y. - filed a complaint in Baltimore County Circuit Court seeking declaratory judgment that Rouse did not have the right to renew. The judge agreed last month.

Rouse argued in its counterclaim: "It would be extraordinary difficult, if not impossible, to find suitable office space and prepare it for occupancy as a corporate headquarters within such a short time frame. It may even be necessary for Rouse to relocate outside Howard County with a resulting disruption to employees."

Yesterday, residents attempted to picture a Columbia without Rouse.

When Patty Rouse, widow of Columbia founder James W. Rouse, heard the news, she said, "I wondered how Jim Rouse would have felt - I think he would have wanted them to stay in Columbia."

But Vince Marando, who has lived in Columbia's Wilde Lake Village since 1975, said the Rouse Co. leaving would "be no major catastrophe."

"They have been a presence, but it has been evolving," he said. "The corporate ties have been evolving - the founder is no longer there."

Kennedy said the company is a logical target for those who are not happy with the way Columbia has developed. But he said Rouse has generally been a positive presence in creating a community where people of all racial and economic backgrounds would live together.

"It would be unthinkable that they leave Columbia," he said.

Residents' tension toward Rouse surfaced recently as the company sought approval from Howard County for one more major development project: to add more than 2,100 residential units to Columbia, primarily in Town Center to create a bustling urban atmosphere.

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