Prince George's County sold a parcel of commercial land in 1988 to a politically connected developer for about half the price officials said the land could bring on the open market.
The county also gave developer Irving L. Kidwell five months to buy the property after rejecting the original buyer's request for more time to close the sale. The county did not re-offer the property publicly for sale nor try to get a higher price from Kidwell.
The Kidwell transaction is one of 20 land sales negotiated by the county since 1982 in the Collington Center, an industrial complex on Route 301 near Upper Marlboro. Those sales and several other county land transactions have become the focus of questions about whether the county has negotiated land sales on highly favorable terms with politically connected people.
U.S. Attorney Breckenridge Willcox is reviewing materials on the Collington Center transactions. His preliminary inquiry has not reached the stage of a formal investigation.
Both Kidwell and county officials say there was nothing improper about the Collington Center transaction. County officials say they dealt with Kidwell and agreed to the bargain rate because he agreed to develop the property quickly, creating jobs and adding to the county tax rolls. Two years after the sale, though, the property still sits empty.
The contract with the county enabled Kidwell to buy seven acres for $423,073, roughly half the price the county was charging for most properties in the industrial park at that time. Tax assessors now value the land at more than $1 million.
The county first contracted to sell the seven-acre site to Glenn Smith of Hyattsville, who had planned to build a warehouse there for his furniture distribution business. In April 1988, the county refused to grant Smith a one-month extension on the settlement date and more time to put together financing for the warehouse construction. County officials informed Smith, who already had received one contract extension, that he could have up to one more year to buy the property only if he agreed to pay $783,480 for the land.
Smith says the county's unwillingness to give him more time forced him to back out of the deal and turn over his purchase rights to Kidwell, with whom he had been discussing a possible business partnership.
County records show that Smith signed papers assigning the rights to Kidwell nearly two months after his contract had officially expired.
Nevertheless, county officials say they allowed Kidwell to extend the contract and assume the below-market price because they were offering incentives to all businesses willing to build in the center. They say it was clear that Smith wanted Kidwell to have the right to buy the property, although it took several months for the paperwork turning over the contract to be completed.
"We were trying to be accommodating to any user who wanted to do business in the Collington Center. I have no concerns about anything that was done out there. If we hadn't worked with them, we'd have a lot of empty properties sitting out there," said Don Spicer, the county's Collington Center general manager.
One reason the county dealt with Kidwell was that he promised as a condition of the sale to begin construction of a warehouse on the property by November 1989, Spicer said.
Nine months after the deadline, however, Kidwell has yet to begin construction on the land, which sits empty except for a pile of rusting steel beams. Spicer said the county now has determined that it is powerless to enforce the construction requirement and has no legal right to reclaim title to the land.
Kidwell denied receiving any special treatment from the county. He said he has lost money on his involvement in the Collington Center because it has been impossible for him to find a tenant for the proposed warehouse.
County Executive Parris N. Glendening has defended the Collington Center sales, saying the development put unused land back on the tax rolls and increased employment along the Route 301 corridor.
The county, which boasts some land priced lower than in other suburban jurisdictions, has actively recruited commercial development under Glendening and offered incentives to developers willing to locate in the county. Last year, the county became the focus of an ethics debate over the close ties between County Council members and developers, who contribute handsomely to their political campaigns.
Kidwell, a banker and builder who owns College Park Contracting Inc., has been a major political supporter of Glendening and County Council members. His companies also have done business with the county. In 1987, for instance, a Kidwell partnership that included James Novak, the county's director of public works, sold a $3 million office building in Upper Marlboro to the county government.
Smith's original contract called for him to buy the Collington Center property for $1.25 per square foot, or about $392,000, provided he begin construction of a warehouse within 18 months of the purchase.
Smith hired Kidwell's College Park Contracting to build a warehouse and office structure. But as Kidwell began preliminary site and design work, Smith says the expected building price increased to more than $3 million.
Kidwell said he invested "more than a million bucks" in the preliminary work for Smith, including the cost of ordering some building materials. "I was in too deep to back out," he said.
While trying to bring down the construction price and put together financing, Smith received one contract extension from the county, which raised his price to $1.35 per square foot. The new contract called for settlement no later than April 30, 1988.
As the deadline neared, Smith still was trying to finance the purchase. "The problem was the time constraints. The county insisted that building take place on a certain schedule. I thought that if we had the time, we could figure out a way to put it together," Smith said.
In late March 1988, Smith's attorney wrote to the county asking for an extension of the settlement date until May 28.
Deputy Chief Administrator Robert Duncan wrote back on April 15 refusing the offer. He said Smith had received a "very favorable contract price of $1.35 a square foot, where Collington Center property is currently selling at $2.50 to $3 a square foot." He said the county would grant Smith a one-year extension only if he agreed to pay $2.50 a square foot for the land.
One day before the contract expired, Kidwell's attorney wrote Spicer to inform him that Smith was turning over the contract to Kidwell. The letter said the deal was "subject to formalization" with Smith.
Kidwell was represented by William Meyers, a politically active law partner of Lance Billingsley, Glendening's campaign manager and head of the county Economic Development Corporation.
Smith said he agreed to sign over the property rights to Kidwell because the developer was "very upset" when informed that Smith was backing out of the deal. "I think he would have sued me. He said, 'Would you turn this project over to me?' At that point, I couldn't really say no."