County Procurement Panel Recommends Sale of Three Properties
Proposal to Save Taxpayer Dollars, Reduce Debt, Generate Revenue and Jobs
Towson, Maryland (October 24, 2013) – A procurement panel for Baltimore County has selected specific proposals for the sale of three County properties that have been submitted to the County Council for approval. The properties are the North Point Government Center building in Dundalk, the Fire Station building in Towson, and the Police Substation building in Randallstown.
"The County is faced with the need to replace three aging facilities. The old way was for the County to borrow money - taxpayer dollars - and rebuild the facilities, taking on additional debt," stated County Executive Kamenetz. "Our County Government must do business differently during these tough economic times. The old models simply will not work if you are committed to investing in public education, public safety and rebuilding an aging infrastructure while keeping tax rates stable. From the beginning, the County's goal was to get these properties back on the tax rolls, generating revenue for the County and providing jobs while still constructing modern fire and police stations to serve future generations, and fund additional school renovations. I am confident that the Council will evaluate each project on its merits as the next phase of this effort."
Year-Long Public Process
In December 2012, the County unveiled a process to solicit bids for the sale of three functionally obsolete properties housing two police stations and a fire station, each located on heavily traveled commercial corridors in Dundalk, Towson and Randallstown. The buildings, constructed 50 to 60 years ago, are all in need of repair and replacement.
Rather than pursue the traditional method of borrowing money to construct replacement buildings on the same site, the County explored selling the sites and using the profit generated from the sale to help defray the cost of new replacement buildings on already-owned County land. Once sold, these properties would generate new property tax revenue for the County in addition to providing jobs and economic stimulus. Remaining profits could be utilized for needed school upgrades for nearby communities, including air conditioning.
Formal Requests for Proposal
As part of the process, a formal Request for Proposal was devised and issued on January 7, 2013, with offers due by April 5, 2013. Five offers were submitted for the Towson property, two were received for the Dundalk site, and one for the Randallstown location.
Consistent with standard practice, the bids were reviewed by a County procurement evaluation committee, which weighed the purchase price and other economic benefits associated with each application. Upon conclusion of its review process conducted over the past six months, which included interviews, further negotiations and contract revisions with the applicants, the procurement evaluation committee concluded its review with the release of recommendations and the basis of support for each proposal.
A proposed contract of sale is being introduced for consideration before the Baltimore County Council, which is vested with the authority to approve the sale of County property. As part of its public review process, the Council advertises the contracts of sale and conducts a public work session where they receive testimony and have discussion, culminating in a final public vote during a regular Council Legislative Session. Two appraisals were conducted on each of the properties and will be presented to the Council during its deliberations.
According to standard procedure, the Council will schedule discussion of the proposed contracts at the November 12 work session and vote at its November 18 legislative session. Two of the contract purchasers also seek zoning changes to accommodate their proposals, and the Council would have to approve a PUD application, which also requires additional public hearings at a later date. By law, the Council must approve all sales of County property as well as all PUD applications.
"This is another step forward in Baltimore County's effort to be innovative, responsible and efficient in government," said County Executive Kevin Kamenetz. "Baltimore County has a long history of protecting the integrity of the procurement process, and the due diligence that this committee took in reaching its recommendations continues that tradition."
"The Council will carefully review each offer as we move forward with due diligence during this comprehensive process," said Council Chair Tom Quirk.
The Specifics of County Properties in Dundalk, Towson, and Randallstown
The parcels for sale are:
- North Point Government Center
7701 Wise Avenue
Dundalk, MD 21222
- Towson Fire Station and Public Works Facility
800 York Road
Towson, MD 21204
- Randallstown Police Substation
9113 Liberty Road
Randallstown, MD 21133
The Procurement Evaluation Committee was comprised of the following Baltimore County personnel:
- Susan Dubin, Assistant County Attorney and Chief, Transactions Section, Office of Law
- Amy L. Hicks Grossi, Assistant County Attorney and Chief, Real Estate Compliance Division, Department of Permits, Approvals and Inspections
- Sharon Klots, Chief, Policy and Program Planning, Department of Economic Development
- Donna Morrison, Deputy Administrative Officer
- Andrea Van Arsdale, Director, Department of Planning
North Point Government Center
Two entities bid on the North Point Government Center property:
- VANGUARD COMMERCIAL DEVELOPMENT, INC.
1500 Serpentine Road, Suite 100
Baltimore, Maryland 21209
- SOLLERS INVESTORS, LLC
113 Westminster Road, Suite 200
Reisterstown, Maryland 21136
The North Point Government Center property was originally constructed in 1953 as a school. In 1982, the school was closed, and the site reverted in 1983 to the County for primary use as a police precinct in addition to office and recreational uses. The building requires regular maintenance and has inefficient and outdated systems. The County proposes to renovate and re-locate the precinct to the now closed Eastwood Elementary School site, representing an upgrade from the current facility. The cost of the renovation is estimated at $5 million. Future maintenance and upkeep of the North Point building, including utilities, would have cost in excess of $5 million dollars over the next 10 years.
- Retains and upgrades all existing ball fields
- Constructs state-of-the-art 21,000 square foot recreation center, including a replacement theater
- Creates retail town center
- Adds a tree-lined amphitheater and gazebo to the site
- Constructs environmentally-friendly playground
- Present value of sale: $4.5 million for approximately one half of the site
The Evaluation Committee selected VANGUARD COMMERCIAL DEVELOPMENT, INC., for the North Point Government Center bid due to the compatibility of the design's recreational focus with the surrounding area, the competitive purchase price and Vanguard's ability to move forward with the development in a timely manner. The Vanguard proposal suggests a creative use of the existing site that provides redevelopment stimulus to the area while maintaining and improving the existing recreational fields on the site. Vanguard's plans and design were responsive to the community's input, leaving the active field space to be retained by the County while upgrading the amenity, including a new theater and community center, as well as an amphitheater.
VANGUARD COMMERCIAL DEVELOPMENT, INC., bid $2,105,355 for 15 acres of the 27.8 acres of the North Point Government Center property in accordance with the RFP. The annual property tax at full build-out is anticipated to be approximately $76,172. The present value of sales price plus 20 years of property tax revenue is estimated to be approximately $3.1 million. With a five-year Revitalization Tax Credit, the present value is estimated to be $2.8 million. Under this proposal, the County would retain all of the existing field space. In addition, the contract purchaser would at its own expense make improvements to the County-owned portion, including new parking areas, a new playground, field upgrades, and indoor recreation/theater building and a unique outdoor amphitheater. The County expects to sell approximately 15 acres, and it will retain the current fields on the remaining 12 acres. The improvements are valued at $2.7 million, which includes $2 million for the new recreation center and $700,000 to upgrade the existing fields. These improvements increase the total present value to $4.5 million.
The key components of the Vanguard Commercial Development, Inc., offer for the North Point Government Center were:
- The Offeror would redevelop a portion of the property into a restaurant-retail-recreational town center to be known as "Merritt Pavilion." It will retain the athletic fields in their current location, and would make the following enhancements: baseball dugouts and spectator bleacher seating would be added where appropriate, and the Offeror would work with the County to determine the appropriate mix of baseball versus soccer/lacrosse/flag football fields. That the Offeror was willing to retain the current athletic fields was a critical component of the proposal, given the community's desire to retain open space at the site. This proposal allows recreation programs at the site to continue uninterrupted, and the committee also found that to be a compelling reason for selection.
The committee was also impressed by the unique design incorporating retail and recreational uses in a fashion unlike that offered anywhere else in the County. As part of the proposal, the Offeror also contemplates a unique tree-lined amphitheater with a gazebo pavilion, performance stage, and stadium/bowl seating together with surrounding green space. The Offeror will also construct an environmentally-friendly playground on the site. A lot line adjustment would be needed, along with cross-easements for access. Renderings of the new 21,000 square foot Recreation Center on the Church Road side of the site present a façade that would be a centerpiece for the site's redevelopment and the community.
- The Offeror would seek County and community input into the interior layout of the Recreation Center that would accommodate, at a minimum, all current recreational activities, including indoor soccer, wrestling, theater and singing groups. Parking would be adjacent to the new Recreation Center.
- "Merritt Pavilion" is envisioned as a family-friendly destination and would have 12 separate buildings spread over 12 acres. It is anticipated to include restaurants, fast casual dining establishments, an ice cream or frozen yogurt shop, an urgent care medical facility, a convenience store/gas station facility, a drive-in fast food restaurant and other not yet defined retail.
Vanguard Commercial Development, Inc. - North Point
Community Center Fields (Select Image to view larger)
Other North Point Bid
SOLLERS INVESTORS, LLC, bid $5,000,000 for the property, plus 5.2 acres of the Sollers Point Road property. The annual property tax at full build-out is anticipated to be approximately $361,058. The present value of sales price plus 20 years of property tax revenue is estimated to be approximately $9.9 million. With a 10-year Revitalization Tax Credit, the present value is estimated to be $7 million.
The key components of Sollers Investors, LLC, offer for the North Point Government Center offer were:
- The Offeror would have conveyed to the County an approximately 5.2-acre parcel located at 7101 Sollers Point Road, which is a portion of the property previously occupied by the Seagrams Distillery. The Offeror would have constructed, on this site, a replacement Recreation Center and replacement athletic fields. It is located approximately one mile from the Wise Avenue property and is within the Dundalk-Eastfield Recreational Council. The remainder of the Sollers Point Road property (approximately 6.9 acres) would have been retained by the Offeror for potential future residential development. Although, the County did find the land proposed in the swap as suitable for development, the committee concluded that the property proposed for exchange is subject to a Voluntary Cleanup Program (VCP) Response Action Plan (RAP) through the Maryland Department of the Environment (MDE). Although the environmental remediation does not pose any long-term impediment to development of the site, the committee thought that it would pose some delay in construction, and the County was eager to move forward to replace recreational amenities vital to the Dundalk community. Additionally, the proposal for 5.2 acres of field space would have been half the size being retained for recreation under the Vanguard proposal.
- The Recreation Center proposed would have been similar in design to the current facility, although, in oral discussions, the Offeror indicated a willingness to change the building design. It would have been a one-story building that would duplicate or improve all existing facilities. The athletic fields would have included two grass soccer fields, which would be sized to accommodate two baseball diamonds each, a sports court, a concession stand and restroom facilities. There would also be a paved parking lot with 100 spaces. The Offeror would work with the County on the final design.
- The Wise Avenue North Point Government Center property would have been developed into a 260,000 square-foot commercial center by a different entity, Dundalk Investors, LLC, which has not yet been created, but would have the same members as Sollers Investors, LLC. KLNB would have handled marketing of the site, which is envisioned to contain a "big box" anchor, together with other smaller format retail and restaurant tenants. No defined users or tenants were disclosed.
Towson Fire Station and Public Works Facility
Five entities bid on the Towson Fire Station and Public Works facility at York Road and Bosley Avenue. The bidders were:
- 800 York Road LLC
28 Walker Avenue, Pikesville, MD 21208
- CVP-TF, LLC
1 Olympic Place, Suite 1210, Towson, MD 21204
- Bosley Avenue, LLC
9475 Deerco Road, Suite 200, Timonium, MD 21093
- Vanguard Commercial Development, Inc.
1500 Serpentine Road, Suite 100, Baltimore, Maryland 21209
- 718 York Road LLC - c/o Smith, Gildea & Schmidt, LLC
600 Washington Avenue, Suite 200, Towson, MD 2120
The Towson Fire Station was originally constructed by the County in 1958, serving as both as a station and the fire department headquarters. In 1989, the fire department headquarters relocated to the newly acquired Public Safety Building, and in 1999, the County relocated its public works facility from the former Texas site, which was sold at public auction and is now a Target department store. The fire station is outmoded and does not contain the amenities available in modern fire stations, including male and female living quarters and drive-through bays. Originally, the County had allocated $5 million dollars in bond loans for construction of a new station at the same site. The public works facilities located at York and Bosley would easily be accommodated on other existing County-owned land, and the County has identified a suitable replacement site for the fire station north of the existing Fuel Depot site at the Towsontown Boulevard and Bosley Avenue intersection.
CVP-TF LLC's Proposal
- Royal Farms convenience store with a gas station
- Creation of a signature gateway entrance into Towson featuring a prominent water feature
- 10,000 square feet of retail space
- 4,200 square foot restaurant pad (could be a restaurant, bank, or other freestanding use)
- LED lighting with zero light mitigation
- LEED silver certification for the Royal Farms building
- Present value of the sale: $8.5 million
The Evaluation Committee recommends the award of the York and Bosley Property to CVP-TF, LLC. The development group bid $8,300,000 for the York and Bosley property. The annual property tax at full build-out is anticipated to be approximately $26,125. The present value of sales price plus 20 years of property tax revenue is estimated to be approximately $8.7 million. With a five-year Revitalization Tax Credit, the present value is estimated to be $8.5 million. The key components of its offer were:
- The Offeror proposes the latest prototype of a Royal Farms convenience store and gas station, an approximately 10,000 square feet of retail strip and a 4,200 square-foot pad site. Retail uses include a drive-in fast food restaurant, a fast casual restaurant, a bank, or other freestanding uses.
- The Offeror proposes LED lighting, with zero light migration from the site and will seek LEED silver certification for the Royal Farms building.
- The Offeror proposes a signature Towson Gateway water feature at the corner of the intersection.
- It is anticipated that the development planning period will take approximately two years and the construction period will take about one year. A PUD is required for this project. This will allow sufficient time for the construction of the new fire facility without any loss of function.
The Evaluation Committee further recommends subdivision of the Towson Diner lease area from the larger York and Bosley parcel. The County is authorized by Baltimore County Code Sec. 3-9-107( c ) to negotiate with the current lessee for the transfer of the property once it is declared surplus. The Administration will present these selections for the York and Bosley property to the County Council.
Other Towson Bids
800 York Road LLC bid $6,100,000 for the property. Although its offer was $2 million less than the CVP offer, the Evaluation Committee originally selected this proposal for the award. That award was conditioned upon the developer's ability to secure a commitment with Harris Teeter, a rising supermarket chain, which was viewed as key to the proposal. When the developer was unable to obtain that commitment after multiple extensions of time, the committee deemed the proposal non-responsive and selected the proposal of CVP-TF, LLC. In selecting the next highest ranked bidder, the Committee also recognized that additional high-end supermarkets and apartment housing are also proposed in several other pending County projects in the immediate surrounding area.
Cost of the project, including the purchase price, was expected to be $50 million. The annual property tax at full build-out was anticipated to be approximately $557,224. The present value of the sales price plus 20 years of property tax revenue was estimated to be approximately $13.7 million. With a 10-year Revitalization Tax Credit, the present value was estimated to be $9.2 million. The key components of its offer were a 44,000 square-foot Harris Teeter grocery store, with one level of structured parking and four levels of apartments (231 units) above the store. The developer was unable to secure a firm commitment from Harris Teeter.
Vanguard Commercial Development, Inc., bid $6,141,960 for the York and Bosley property. The Offeror proposed a full-service Wawa store that included both their well-known food items, a multi-pump fuel station and a drive-through fast food restaurant (e.g. Chick-fil-A). A third retail building would have completed the project and complemented the uses fronting York Road. Given the higher price bid for a similar project, this bid was not short-listed for further evaluation.
Bosley Avenue, LLC, bid $4.5 million for the York and Bosley Property. The Offeror proposed to redevelop the Towson Fire Station and Public Works Facility at 800 York Road to feature a newly constructed, state-of-the-art Whole Foods Market. Given the higher bids, this proposal was not short-listed for further evaluation.
718 York Road, LLC, bid $75,000 for .052 acres of the York and Bosley property. The Offeror proposed continued use by the Towson Diner as overflow parking and did not anticipate construction or improving the property in any fashion, as it will remain in its current use and condition. 718 YORK ROAD, LLC, did not respond to a request for specific project details and was deemed non-responsive.
Randallstown Police Substation Award
One entity bid on the Randallstown property:
- 101 Development Group, LLC
101 East State Street, Kennett Square, PA 19348
The Randallstown Police Substation was originally constructed in 1964 as the Randallstown Post Office. When the post office was relocated, the County purchased the building in 2004 for use as a police substation for the Woodlawn precinct. In 2013, the County terminated its leases of the Vehicle Operations and Maintenance facilities in both Towson and Randallstown, purchased a vacant car dealership building in Randallstown, and consolidated the VOM facility and the Randallstown substation at the new site. The 1964 structure was vacant and the building posed maintenance and upkeep obligations associated with the 50 year-old building.
101 Development Group LLC's Proposal
101 Development Group, LLC, a wholly-owned subsidiary of Genesis HealthCare LLC ("101 Development") bid $275,000 for the property. The key components of its offer were:
- Genesis HealthCare operates the Randallstown Center, a 160-bed, skilled nursing center located at 9109 Liberty Road adjacent to and tucked behind the Randallstown Substation.
- The Offeror proposes to raze the existing building and construct additional parking. Purchase of the Randallstown Police Substation building would provide much needed parking and in turn enhance the residents' quality of life.
- Genesis HealthCare is one of the largest providers of healthcare and support services to seniors in the United States and provides important services and employment opportunities to County residents.
Innovative, Responsible, and Efficient Government
"I thank everyone in each of these communities who has been very patient as the County's procurement committee worked through this process," concluded Kamenetz. "I've spoken with Council Chair Quirk, as well as the council members in each of the three districts, and I know they are eager to evaluate each contract on its merits. Once again, Baltimore County is determined to operate a government that is innovative, responsible, and efficient."