F.C. Nixes Akridge Deal

In a sudden and stunning development Monday, the Falls Church City Council voted unanimously to terminate the City's negotiations with the Akridge Company for a "master developer" contract to spearhead a renovation and revitalization of the City's central business district.

"Local market conditions dramatically and favorably changed" during the last eight months that the City has been negotiating with Akridge, a memorandum to the council from City Manager Dan McKeever stated. "There is now considerably greater interest in development and commercial opportunities in the city."

McKeever stated that "given the constraints of the Public Procurement Act, the City had been constrained in responding to unsolicited proposals to purchase and develop land within the City Center project area."

The statement went on to note that the City's move to secure a "master developer" as "initially, at least, predicated on the desire to lure a private developer to Falls Church," at a time when there seemed to be no significant wider interest, but that the economic development atmosphere has significantly changed.

Monday's vote came at the recommendation of McKeever, who was heading the negotiations for the City, and the its citizen volunteer City Center Task Force that originally chose selected Akridge after an extensive search and bidding process.

Akridge officials said they were "disappointed" by the decision, but also "excited" about the prospect that they will continue to play a role in the overhaul of four City blocks west of the intersection of Broad and Washington Streets.

McKeever explained to the Council Monday that negotiations which began in January after Akridge was selected became mired in details and countless variables that eventually convinced him the City would be better served by terminating the plan, altogether.

Akridge's Chris Ciliberti, in an interview at the News-Press yesterday, conceded that while the talks were not at an empasse, they involved an increasing myriad of options due to the lack of well-defined plan. Also, he said that the current City code allowing for a 110 foot height limit distorted perceptions of land values in the area making it increasingly difficult to consider reasonable choices.

Still, however, the primary motive for the City's move Monday, according to McKeever's memorandum, was the desire to explore a number of fresh options that developer interests who wish to compete with Akridge are prepared to bring forth.

As long as the City was in formal negotiations with Akridge, it was prevented by the Procurement Act from considering proposals from competitors. Now it will be free to, and it was indicated Monday that there are plenty coming forth.

Dr. Steve Rogers, chair of the City Center Task Force, said Monday, "Three years ago, when we began this process, we were a 'no place.' Now, four major projects have been approved and over $300 million invested in development here. The Washington Business Journal has identified Falls Church as one of the most active places to build."

The resolution passed by the Council Monday calls for three things: 1. cancellation of the pending procurement of a master developer, 2. adoption of a "market-based development approach," and, 3. the development of a "conceptual and land use regulating plan."

Ciliberti, in his interview at the News-Press, confirmed the need for a "regulating plan" for the development area. This "overlay" based on a vision of what a completed City Center redevelopment would optimally look like would conform with so-called "form-based zoning" and would, among other things, help establish realistic expectations by land-owners on how they can value their property.

With the potential for 110-foot high building under current zoning, land owners were anticipating their property would be worth far more than a developer could afford, given that developer would conform to the City Center vision, Citiberti noted.

McKeever was careful to stress that Monday's vote was not a reflection on Akridge, which he said operated professionally and in good faith throughout. Ciliberti had similar complimentary remarks for McKeever and the City.

But he said that he was disappointed, given Akridge had secured a major anchor tenant for the redevelopment of "Block A" of the project (between the Burke and Herbert bank site and Anthony's Restaurant on the south side of the 300 block of West Broad). Last Thursday, a tentative agreement was inked with the Whole Foods Supermarket, which worked with Akridge at a location in Silver Spring. Ciliberti also said that over $350 million in financing had also been secured through association with Jan Zachariasse of Waterford Development.

While he's "enthusiastic" about prospects for the development of the City Center, Ciliberti conceded to the News-Press that his company's future involvement here depends on its ability to acquire land, specifically City-owned land in "Block A" (the site currently occupied by the 2 Sisters Coffee and the parking lot of the post office).

"There's an offer from us on the City Manager's desk for acquiring that property, outright, or for working with the City on it in a public-private partnership," he said. He hopes that Akridge's pending deal with Whole Foods (Ciliberti did not name the retailer, but it is generally known) and its ready financing will convince the City to close a deal with them.

However, competition and "market forces" are now the name of the game, and the City is free to entertain offers from a variety of courtiers. The good news for the City is that there are apparently plenty to choose from now.