Tower project doubts persist

In Columbia, 23-story development faces possible legal fight, market downturn

Analysis

August 11, 2006|By GERALD P. MERRELL | GERALD P. MERRELL,SUN REPORTER

Even as the green light nears for construction of a planned residential and retail tower in downtown Columbia, several issues swirl around the multimillion-dollar project, among the most critical in the short-term:

Will opponents to the 23-story luxury development pursue legal challenges to block the project?

Can common ground be found to settle the dispute? The opponents have rejected two overtures for a quick accord.

Will the sharp downturn in the nation's housing market, particularly in the luxury segment, result in a delay of the project?

The developer, Florida-based WCI Communities Inc., expects to receive building permits from the county next month, said William Rowe, vice president of the company's Mid-Atlantic Region.

The company has said in the past that initial work on the tower -grading and utility preparation - would begin immediately after the permits are issued. In an interview this week, Rowe went only so far as to say, "The building permits allow construction to begin."

Some of the opponents believe the $70 million project might become a victim, at least temporarily, of declining market conditions.

The company Wednesday released disappointing second-quarter earnings. Net income fell almost 70 percent, to $22.7 million, while revenue declined 21 percent, to $529.4 million, and new orders dropped 62.4 percent, to $238.4 million.

MSNBC, the cable network, reported earlier that WCI would proceed with three to five condominium projects this year - down from as many as 17. While most of those are in Florida, according to the network, the financial conditions have given opponents of the Columbia project hope that it might succumb to the company's retrenchment, as well.

WCI intends to construct The Plaza Residences overlooking Lake Kittamaqundi. The project would include ground-level retail shops and 160 condominiums on 22 stories, with prices beginning in the $600,000s and topping $2 million for penthouses.

Rowe said market conditions "have not to date" forced the timetable for the downtown tower to be changed. Building schedules, he said, are determined by corporate executives in Florida. Phone calls seeking comment were not returned.

But even while opponents consider further legal challenges to the project, there have been offers to settle the case. Though chances for an accord are viewed as slim, neither side in the fight has precluded an agreement.

"I would think the odds of a settlement would be 20 to 30 percent - tops," said E. Alexander Adams, the attorney representing four residents who are contesting the county's approval of residential and retail complex.

The developer has made one proposal in writing, according to copies of correspondence. And WCI informally made a second, according to Joel Broida, one of the opponents.

The second, Broida said, included six-figure buyouts for him and Jo Ann Stolley, each of whom reside at the Lakeside at Town Center condominium complex directly across the street from the site of WCI's proposed tower.

The other proposal, contained in a letter last month from WCI, included offers to:

Enhance the area around the tower for pedestrians by installing "benches, lighting, pavers and landscaping."

Dedicate a portion of the complex "for public use, such as an art gallery for local artists or a place to display historical materials related to Columbia."

Make an unspecified "monetary contribution" to a parking fund, controlled by General Growth Properties Inc., the largest land owner in Columbia, "for the purpose of supporting and providing additional parking in the Town Center."

Make an unspecified contribution to a program designed to provide "workforce housing" downtown.

Rowe signed the letter, dated July 18.

Broida said the opponents rejected both settlement offers.

"This isn't amount money," he said. "I don't want a penny. This is my home. We're talking about two different things. WCI is talking about a business deal. We're talking about a mistake that was made, and it's a mistake to have it [the tower] there."

Rowe declined to discuss the specifics of the company's offers, but he said that neither the opponents nor Adams, their attorney, have formally responded. He said the company made the overtures in hopes of finding an amicable ending to the dispute that has engulfed the development for months, even though WCI has thus far won every battle.

"We're disappointed that they have not responded or seem receptive to meaningful discussion of our proposals," he said. "We have sent several letters and continue to extend an invitation to meet with them to resolve the matter."

Adams also declined to discuss the settlement offers.

Broida has floated his ideas on how to settle the dispute, although he acknowledged the plan might be unacceptable to the developer.

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