Big Projects Advance in Montgomery

By Nancy Trejos and Michael S. Rosenwald
Washington Post Staff Writers
Wednesday, April 26, 2006

Two major Montgomery County developments moved closer to reality yesterday: One would bring luxury living and a high-end spa to North Bethesda and the other, thousands of new homes and businesses to Gaithersburg.

In North Bethesda, a Virginia developer finalized a once-tenuous deal to build the country's second Canyon Ranch Living community. Residents of 434 condominiums there will pay between $900,000 and $5 million to live at a spa with on-site nutritionists and access to top doctors.

Separately, the Montgomery County Council cleared the way for a more traditional mixed-use development that could bring as many as 2,250 homes and 320,000 square feet of offices and shops to Gaithersburg. After hours of heated debate, the council voted 7 to 2 yesterday to give the city permission to annex one of central Montgomery's last few pieces of undeveloped land --the 182-acre Crown Farm -- so a local businessman can build a pedestrian-friendly residential and commercial complex.

Although they have little in common, both projects will leave significant imprints in a county with limited space and a growing population now estimated at 900,000 people. One-third of the county, mostly the northern tier, has been reserved for open space and farmland, leaving little land for development in southern and central Montgomery.

County officials and developers hailed the North Bethesda and Gaithersburg projects as vital to the county's economic development.

"These projects indicate our ability to provide housing options while assuring that schools and transportation infrastructure are built," said council member Steven A. Silverman (D-At Large).

The two deals have faced many hurdles.

The Penrose Group of Tysons Corner, which is developing the North Bethesda project, secured a partnership deal with Canyon Ranch, which calls for the spa company to receive an upfront payment and ongoing management fees to run the development. But the land -- 53 acres at Interstate 270 and Old Georgetown Road -- belongs to the Camalier family, which developed the Rock Spring office park in Bethesda, home to Marriott International.

In July, Canyon Ranch officials told The Post that a deal between Penrose and the Camaliers was near and that they were hopeful it would be closed soon. And then nothing happened.

Months went by without the deal being finalized. What happened, according to a well-placed real estate industry source, is that the deal fell apart. Both sides recently came back to the negotiating table and agreed on a deal. The financial terms were not disclosed.

Inspired by the healthy lifestyle and ritzy offerings of the renowned Canyon Ranch Spas in Arizona and Massachusetts, the $1 billion Canyon Ranch project in North Bethesda will be one of the most unusual in the region.

It will feature two 20-story towers of 434 condominiums, 157 hotel rooms, 87 luxury rental apartments and a 90,000-square-foot wellness center.

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