Montgomery County announced Friday that it has reached agreement with a private developer to create a “life sciences” town center in its economically moribund eastern sector.
It took the county and developer Percontee, owners of adjoining land, more than a year to settle their differences over Viva White Oak, envisioned as a 300-acre hub of medical and science companies, housing and retail businesses adjacent to the Food and Drug Administration campus near Route 29 and New Hampshire Avenue.
County officials and community advocates hope the project will generate jobs and growth for a region of the county that has seen little of either. They see Viva White Oak as the third piece of a potential economic development engine that includes the FDA — which could expand onto the county property — and the new Washington Adventist Hospital that recently broke ground nearby. Supporters say the three ventures could generate as many as 10,000 new jobs as the project is built out over the next 25 years.
“Viva White Oak represents a significant leap forward for the East County,” County Executive Isiah Leggett (D) said in a statement Friday. “It will not only create a new community with homes, shopping and dining opportunities, but it will facilitate world-class research and development efforts right at the front door of the U.S. Food and Drug Administration (FDA) in White Oak and boost cooperation with that agency.”
Leggett finalized the agreement with representatives of the Gudelsky family, owner of Percontee, on Tuesday, just hours after undergoing back surgery at MedStar Georgetown University Hospital to relieve pain from spinal stenosis. It was his second surgery in the past six months.
The shape of the agreement has changed considerably over the past year, morphing from a partnership, in which both parties would share profits and risks, into a land sale. The details are certain to be closely scrutinized by the County Council as it reviews the plan starting this week. The council will have to decide whether to approve $47 million in bond funding to finance roads and intersection improvements around the site. Aspects of the deal will be reviewed by the Montgomery Planning Board.
The deal nearly collapsed in late April over legal and environmental concerns surrounding Percontee’s 180-acre site, currently a sand and gravel quarry.
Half-century-old covenants on the property, sought by neighboring landowners to limit industrial uses on the property, bar Percontee from building on more than 40 percent of the land.
Percontee’s executive vice president, Jonathan Genn, who did not return phone calls Friday, said in April that the covenants were no longer a factor because the land has been rezoned.
But Montgomery attorneys warned Leggett that the county could face lawsuits from property owners adjacent to and near the site who want enforcement of the covenants to continue. The covenants, which were discovered by county attorneys through their own due diligence, also raise questions about the value of Percontee’s land.
Leggett said in an interview Friday that the agreement was revised so that the county does not have any ownership interest in Percontee’s land. Instead, the county will eventually sell its property to the developer for $42 million — the appraised value of the land. Leggett said it will be Percontee’s responsibility to dispose of the covenants, and that the company will pay the county for any legal costs or damages that may arise.
“I did not want the county dragged into being a part of that,” Leggett said. “They’re going to have to figure that part out.”
County attorneys also raised objections about industrial contaminants on the Percontee land that will have to be removed before construction can begin. The county’s land has already been cleaned up.
Leggett said the county and Percontee agreed that the company would remediate the land in phases, as construction goes forward.
The deal remains a good one for the county, Leggett said. Montgomery purchased its 115-acre site from the Washington Suburban Sanitary Commission for $11 million about 10 years ago.
The document that outlines the deal, known as a general development agreement, went through more than 20 drafts, according to county officials. Friction between Genn and some senior county officials prolonged the talks, which blew past multiple deadlines set by the Percontee executive.
Leggett said he negotiated key parts of the deal personally with Percontee president and chief executive John Gudelsky. Leggett has a long history with the Gudelsky family, a major player in regional real estate with interests in Tysons Corner, Wheaton Plaza and numerous other projects.
Leggett and Gudelsky’s mother, Martha Gudelsky, served together on a nonprofit board in the mid-1980s, shortly before Leggett made his first run for the County Council.
“She was not a big contributor, but she introduced me to people,” he said.
Family members have contributed thousands of dollars to Leggett’s campaigns over the years, campaign finance records show.