City Moves to Sell Land for New Harris Teeter
By STEPHEN SIEGEL
Falls Church Times Staff
October 9, 2012
The long-rumored Harris Teeter grocery store moved one step closer to reality Tuesday as the Falls Church City Council granted its initial approval of a proposal to sell two city-owned lots on the 300 block of West Broad Street to a development company called Falls Church Development Partners, LLC.
The Council acted to authorize the sale following a “first reading” of the proposed sale; a second and final reading still needs to be approved, and is expected to be, at the Council’s meeting on Oct. 22.
The two city-owned lots are located east of the old Post Office and west of the Burke & Herbert Bank. One, adjacent to the bank, is technically owned by the City’s Economic Development Authority. Together, the city is agreeing to sell them for $4,322,000, which is the value arrived at in an appraisal done for the city earlier this year, officials say.
But that’s not the end of the story. Possibly to prevent what occurred when the demise of the City Center project left the City holding on to two properties at a cost of $1.6 million, the City has built some extra protections into this agreement.
First, the developer won’t be able to close on the land until it applies for and receives a building permit. Secondly, the City is including a performance requirement that would allow officials to buy the land back if the project is not started in 12 months or completed in 24 months.
Asked if those protections were put in to avoid a repeat of the City Center outcome, City Manager Wyatt Shields said only: “We think it’s a sound agreement, practical. It will work for the developer, and represents the City’s interests very well.”
In addition to the Harris Teeter, the project will include underground parking, apartments above, and additional retail spaces, but officials didn’t want to specify precisely what to expect. Mr. Shields and Economic Development Director Rick Goff said they didn’t want to make any assumptions about what the developer ultimately plans to submit.
But chances are high that the project will be similar in size and scope to other mixed-use buildings proposed or built in the City in recent years, which means controversy over density, congestion, and the impact on the City’s ever-popular schools will be ignited yet again.
Given the size of the project, which also will include the old post office building and Anthony’s Italian restaurant, the full project could be quite a windfall for the City. The first financial impact would occur when the city sells the $4.3 million worth of land; not only does it put that amount in the City coffers, but it puts two big lots back on the tax rolls.
The net added value to the city beyond that would depend on what kind of capital contributions (called proffers) the developer ultimately is required to make, and what kind of impact the residential portion has on the schools. That, in turn, would depend on the size of the apartments, and how many additional students end up living in them. Smaller apartments are less likely to attract families with children, and will thus have a smaller impact on the schools and the cost of operating them.
Falls Church Development Partners is joining forces for this project with Rushmark Properties to build the project. In a press release, Rushmark says the Harris Teeter will be 60,000 square feet, which is quite a large store.
“This project should prove to be a welcome addition to the residents of Falls Church,” said Patrick Kearney, president of Rushmark. “Together with Harris Teeter, we look forward to working with the City in making this exciting and important project a reality.”
Rushmark says it plans to file its paperwork as soon as the City executes the sale agreement for the land. But there still is one other stumbling block before the project can get off the ground: the suit the City filed against City Center developer Atlantic Realty.
The City had contracted with Atlantic in 2008 to build City Center in part on the land in question, and Atlantic remains interested in doing so. But the City filed suit against Atlantic last year, alleging that it failed to live up to the agreement. Documents filed in Arlington County show the city sent a “notice of default” to Atlantic dated March 2, 2011, arguing that the developer “failed to perform its obligations under the agreement” between the city and the developer. It is asking the court to declare that project null and void. That would allow it to proceed in other directions with the city land.
Asked if there had been any resolution to the lawsuit, Mr. Shields said no. But he said the city was confident it would prevail, and said it still would like to work with Atlantic on other development projects.
“Atlantic is a major property owner in the City,” Mr. Shields said. “We anticipate having projects in the future with them, and we look forward to that.”
By Stephen Siegel
October 9, 2012