Gulf Oil Corp. has decided to sell most of its real estate development assets, including the new town of Reston, Va., its major project.
Confirming what had been rumored for some time, Gulf said no buyer has yet been found and company executives yesterday declined to name their asking price.
A Fairfax County financial report shows Gulf paid taxes last year on Reston property assessed at $103 million, although the market value is probably higher. The sale will be handled by Goldwell Banker.
Gulf Reston, Inc., a subsidiary of Gulf Oil, currently owns 3,600 acres in Reston, or approximately half of the town. Most of it is undeveloped land. Its holdings include three shopping centers and 1,000 apartments units.
James Todd, president of Gulf Reston, emphasized that the property would not be sold piecemeal, but as part of a package that includes about 400 acres in Florida and Kansas.
In Pittsburg, a Gulf spokesman said he dis not expect the divestiture would have any material effect on Gulf's earnings or financial position. The corporation's official reason for the sale is that Gulf wishes to concentrate on energy and related fields. Its real estate development division will concern itself henceforth with the company's own internal property requirements.
But the real estate development has not proved very profitable for Gulf. The company decided to write off its 2,800 acres investment in Orlando, Fla. in late 1975. That same year residential sales in Reston fell 16 per cent, although Todd reported that 1976 and 1977 were "good" years.
The decision reverses a gamble Gulf took a decade ago when it bought out Robert E. Simon, the RES in Reston and original developer who ran out of money. At the time Reston was in debt by $45 million. A third of that was unsecured liability belonging to Gulf. The John Hancock Life Insurance Co. held title to most of the land to assure its own $20 million loan. (Hancock paid county property taxed last year on land assessed at $32.9 million.)
In 1969 Guld Reston's new president, Robert H. Ryan, observed: "Gulf could have taken its loss and walked away. Instead we decided to see if we can't make a go of this thing. It is not a particulary good investment."
The going was often rough during the decade that followed. The recession hit new development hard. The new town's population was expected to grow to about 74,000. It stands now at around 28,000. Growth was also impeded by a sewer moratorium and inability to get access to the Dulles airport highway.
In addition, there has been friction between Gulf Reston and the Reston Community Association, according to RCA president Joanne Brownsword. The organization was originally devoted to maintaining the master plan for the new town, sometimes in opposition to developers who wanted faster growth of higher density.
RCA fought Gulf to the Supreme Court over the location of a gas station. Reston residents owning $90,000 homes protested against high rise buildings and twice went to court to stop subsidized housing units in the Island Walk development.
Ironically, said Brownsword, relations between Gulf and RCA have been better recently. She said Reston residents may even come to regret Gulf's departure if the new owner is more demanding.