By Ovetta Wiggins
Washington Post Staff Writer
Thursday, January 14, 2010; B08
The developer of Westphalia Town Center, a massive mixed-use project expected to dramatically alter the landscape of central Prince George's County, is in default on the loan.
Sandler at Westphalia, a Virginia Beach-based subsidiary of L.M. Sandler & Sons, owes Wells Fargo Bank $47.4 million, including interest, on a loan finalized in December 2005, according to documents filed in Prince George's Circuit Court. The original amount of the loan was $41 million.
Wells Fargo began foreclosure proceedings in August, a month before the County Council, which sits as the District Council to hear zoning issues, gave the developer a green light on the project's conceptual site plan.
Council member Samuel H. Dean (D-Mitchellville), who represents the Westphalia area, said the council had "heard rumors that there were some financial challenges that they were facing. But we've heard that about many developments" in Prince George's.
He said the council approved the project, based on its zoning. "We're not involved in finding out if they are financially solvent or not," he said.
The case has been assigned to a trustee, Richard E. Hagerty of Troutman Sanders LLP of McLean. Hagerty said in an e-mail that his firm's policy is to not comment on pending legal matters.
Marva Jo Camp, who has represented Sandler at Westphalia at hearings in Prince George's, and Nathan D. Benson, who is listed on court documents as a manager with the company, did not return calls seeking comment.
Westphalia Town Center, one of the largest developments of its kind in the county, would have as many as 5,000 housing units, almost 6 million square feet of retail and commercial space and three hotels with perhaps 600 rooms total. The town center would replace 530 acres of farmland and undeveloped property.
The development would be on the north side of Pennsylvania Avenue (Route 4), extending from Suitland Parkway to Woodyard Road.
It is part of the Westphalia sector plan, which covers 6,000 acres and is bounded by Ritchie Marlboro Road to the north and east, the Capital Beltway to the west and Pennsylvania Avenue to the south. There are plans to build an additional 10,000 houses outside the town center in that area.
The town center is the anchor of a larger effort by about a half-dozen developers to transform the rural area of Westphalia into a mini-city of houses, stores, offices and hotels.
Dean said he is hopeful that the financial turmoil will be resolved quickly so the project can move forward.
Some of those involved in the plans said this week that it is uncertain what effect Sandler at Westphalia's financial troubles will have on the overall project. But most thought it probably will not make much of a difference.
"The basic planning is already set," said Joseph Bovenzi, a senior planner with the Prince George's Planning Board, remarking that the board and District Council had signed off on the conceptual site plans. "If it went into foreclosure, I'd imagine whoever came in would pick up where the old developer left off."
Bovenzi said a foreclosure could delay other projects, which were designed to "build off of each other."
"If it's a delay of a couple years, it might make them change how they approach the project," he said.
But Arthur Horne, who represents three companies that plan to build in Westphalia, said the recession had put much of the other development on hold. Once the market rebounds, Horne said, his developers will move forward with their residential and commercial projects.
He said some of the other developers have a larger issue to deal with: unfinished transportation improvements, which were supposed to be paid for by the developers of the town center, including Daniel Colton of GB Development.
"The Westphalia Town Center was the ultimate dream. Everything was going to develop from the core," Horne said. "It was a nice benefit, but it was not why the others chose the area to build their houses. . . .
"We'd like to know if it will develop or when it will develop, but it's not an issue."
Staff researcher Meg Smith contributed to this report.