Metrorail officials again have tapped their original choice to develop the White Flint subway stop, expected to be the metropolitan area's largest single commercial and residential complex.
Metro's board of directors concurred last week with a decision by General Manager Carmen E. Turner to negotiate an agreement with Paramount Development Co., a firm combining Blake Construction Co. Inc. and Richmarr Development Corp., both major local companies.
Normally, Turner's decision alone would be sufficient for an administrative matter, said Henry W. Cord, head of Metro's development branch. But fierce competition among developers for the 34-acre site north of White Flint mall on Rockville Pike brought Metro to federal court in 1981 when the losers successfully contested the original award to Paramount. They claimed, with support of a General Accounting Office report, that Metro had not been equitable in its bargaining. Officials subsequently rebid the project.
Cord said he expects the financial arrangements to be complete by late December.
Last week's decision puts back on track essentially the same $214 million hotel, office retail and condominium project that Metro picked before.
But the decision to proceed with Paramount by no means indicates a certain end to the struggle between the two developers that has made Metrorail's largest real estate venture also its most troubled.
White Flint Place Co.--a firm including shopping-mall magnates Theodore N. Lerner and Albert (Sonny) Abramson--was one of the losers that took Metro to court in 1981, and it was the only firm to compete with Paramount when Metro rebid the project that August.
White Flint Place offered in June to buy the land outright from Metro for $10 million in cash, but "we had to tell them their proposal was unacceptable," Cord said. "They did not submit the joint development plan" that Metro was seeking, he said.
Lerner and Abramson also are developing a similar project, already approved, with a 16-story office tower and hotel, directly across Marinelli Road from the subway site. It would have to compete for tenants with the Metro development at White Flint. Therefore, were Lerner and Abramson to block or delay the Metro project by appealing the latest decision or taking other legal action, their nearby development would be completed first, giving them at least a head start on attracting tenants.
Construction of the Metro development must be started within two years of the station's opening--scheduled for mid-1984--or else the develpment will be reduced sharply, according to John L. Westbrook, chief of Montgomery County's urban design department.
In that case, a planned 300-room hotel would be eliminated, office space would be cut from 640,000 square feet to 340,000 and retail space would drop from 73,000 square feet to 58,000, he said.
Even more immediate is the fact that plans to incorporate the subway's parking spaces and bus stops into the development must be ready when the station opens, Westbrook said. If they are not and the county and Metro don't agree to delay those critical subway-support facilities, builders would face design problems and most likely would have to trim back the project, Westbrook said.
"That's probably the single most difficult nut to crack," Westbrook said. "Those facilities have got to be ready when the station opens."
Currently, it would take six to eight months to get the development plans approved if there are no hitches, he said.
The 1981 court action by Lerner and Abramson as White Flint Place partners along with the other losing developer, Travenca Development Co., effectively has delayed the start of construction at the White Flint subway site for two years, Cord said.
Harold Gordon, attorney for White Flint Place, declined to comment on Metro's choice last week and said he won't know whether Lerner and Abramson want to challenge the decision until after he confers with them.
In the meantime, market conditions that were so inviting when Metro originally awarded the project to Paramount have taken a turn downward, with absorption rates for office space and rental rates for retail shops dropping off, and although the residential market is picking up, condominium sales remain the most recalcitrant.
Steven Grigg, a vice president for Blake and one of the principals in the Paramount venture, advised Metro that his firm wants it to reconsider the phasing, or construction schedule, that Paramount originally planned.
"The current short-term conditions in the commercial and residential markets make this intensive development unfeasible," Grigg said in a letter to Metro last month. But "the cyclical nature of these markets will allow for development to proceed in a short time."
Grigg stressed that Paramount intends to bring on the urban-style mix of residential and commercial construction that Metro seeks to give the transit system long-range income and shape metropolitan growth along the Red Line corridor. The only difference is that developers want to build the project less rapidly than they originally proposed, he said.
Grigg said he expects to take at least until 1990 to complete the final portions of the project, which includes 765,000 square feet of condominium units.