Thursday, April 12, 2007

Rockville Town Square Project Switches Some Condos to Apartments


It appears - just months before completion – that development team RD Rockville (ROSS Development and Investment and the DANAC Corporation), citing poor sales, has decided to switch at least one (and perhaps more) of the four condominium complexes in its $350 million Rockville Town Square project (specifically, The Lunette building) from condos to apartments, and has notified buyers of the decision, according to the Gazette.net Web site. In its letter to affected purchasers, the developer allegedly offered three options: Rent the selected unit, buy a different unit, or walk away from the project. The Rockville Town Square project (pictured) is located along (and to the west of) Rockville Pike, just two blocks from the Rockville metro station, and bounded by Beall Avenue to the north, Washington Street to the west, and E. Middle Lane to the south. Design by WDG Architects. When completed, the Square will contain 644 residential units and 180,000 sf of retail.

The Rockville Town Square Project is not to be confused with developer Duball’s $240 million Rockville Town Center project, which is located just south of Rockville Town Square, and, when completed in 2011, will consist of a two residential-tower complex with 485 homes and 45,300 sf of retail just one block west of the metro and bounded by East Montgomery Avenue, Maryland Avenue and Monroe Street.

6 comments:

Anonymous said...

There is a recent report in the Examiner regarding the Rockville Town Square Condominium developer breaking their contract

Residents search for housing after developer decides to flip to rental

Apr 9, 2007 3:00 AM (11 hrs ago)
by Dena Levitz, The Examiner

Rockville (Map, News) - Right about now C. Richard Lee had planned to visit his mother in her two-bedroom condominium within the newly revitalized Rockville Town Square.


Instead, Lee is helping her figure out her options after a sudden decision by the developer of the Lunette building to convert the condos into rental units.

The news came courtesy of a letter from Bethesda-based Ross Development & Investment last week that spelled out severe problems in selling the condos, which tend to be in the $500,000 range.

“They’re basically breaking their contract,” Lee told The Examiner this week.

Phone calls to Ross Development were unreturned Friday afternoon and employees of the Town Square’s Condominium Sales Office refused to explain the change or the number of homeowners-to-be impacted.

According to Lee’s letter, the same one the company sent to all future homeowners at the Lunette, they now have three options: seek a refund of their deposit, rent a unit in the Lunette or purchase a unit in the nearby Palladian Condominium.

The problem, though, in Lee’s mind, is that his mother is not interested in renting a home. And for her to purchase a unit in the Palladian would be at least $30,000 higher than the $550,000 she was prepared to spend for a comparable unit in the Lunette.

“And those units are not as nice,” he said. “[The one we saw] has a terrible view facing a parking lot.”

The Lees first began inquiring about a home in Rockville Town Square in the fall, ultimately signing a contract in October. They were told that January of this year would be their move-in month, yet that date has long passed, Lee said.

According to Rockville Town Square’s main Web site, the revamped Rockville downtown is expected to have 644 condo units spread out over four blocks and sitting above retail stores and restaurants. Of those, 15 percent are supposed to be set aside for affordable rental units, based on city guidelines.

dlevitz@dcexaminer.com

http://www.examiner.com/a-663486~Residents_search_for_housing_after_developer_decides_to_flip_to_rental.html

Anonymous said...

There is a recent report in the Gazette.net regarding the Rockville Town Square Condominium developer converting condominiums into rental units

Friday, March 30, 2007
Slowdown in condo market prompts conversion of Rockville units to rentals
by Warren Parish | Staff Writer
E-mail this article \ Print this article

Citing sluggish sales, the residential developer in Rockville’s Town Square is shifting more than three-quarters of its units from condominiums to rentals, leaving some buyers to choose between switching buildings or tearing up their contracts.

Scott Ross, managing partner of RD Rockville LLC, the company developing the residential side of the $352 million mixed-use development in the heart of the city, said last week that all but one residential building would now be marketed as rental units.
Ross declined to disclose additional information, saying the press has been unfair in its coverage of the faulty sections of pavement on Maryland Avenue and Gibbs Street.
In February, RD Rockville scrapped a plan to sell all of its 644 Town Square units, deciding that more than one-third would be rented. According to numbers provided by company officials in February, RD Rockville had sold 77 condominium units in its other buildings now slated for rental.
Earlier this month, the company sent a letter to such purchasers, informing them of the decision.
Due to ‘‘very few sales,” states one letter, the developer decided that condominiums will ‘‘initially be rental units.”
The company is offering three options to buyers who purchased units in buildings now slated to open as rentals. They can either rent their selected units, buy a different unit in the Palladian — the one building still slated to go condominium — or walk away entirely.
‘‘We don’t like any of those options,” said C. Richard Lee of Rockville, whose mother, Pokuang, signed a purchase agreement for a unit in the Lunette building in October.
Speaking on behalf of his mother, who was out of the country on Monday, Lee said the company’s decision has left the family scrambling to find a home for her.
‘‘It’s not like we’re getting an incentive to move into another unit,” he said, pointing out that the Palladian space offered in exchange for the Lunette unit has a less attractive view and costs more.
Other buyers in the rental buildings who face the same dilemma have criticized the decision, saying lower rates of ownership could hurt their investment.
Admitting the market has slowed since the winter of 2005, city and company officials have predicted long-term success for the 12.5-acre residential and retail development that features a new county library and a public square.
RD Rockville’s original plan called for only rental units, city officials say. At the request of the city, and encouraged by a rising market, the company eventually shifted the plan to 100 percent ownership.
Just 152 out of 644 units are now slated to be owner-occupied. Residents began moving into the Palladian earlier this month.

http://www.gazette.net/stories/033007/businew203324_32363.shtml

Anonymous said...

There is a report in The Sentinel Newspaper about the Rockville Town Square Condominiums

Town Center Condo Owner Cries Foul
By Contessa Crisostomo
Staff Writer
When David Lieber and Amy Matush purchased their condominium in Rockville's new Town Center in 2005, they thought they were buying a close-to-1,200-sq. foot home.
A year and a half later, as construction nears its end and as tenants begin to settle this week, Lieber and Matush found that their condominium is actually smaller than they were first told.
An appraisal completed this month showed that the previously advertised 1,198-sq. foot condominium was actually 1,140 sq. feet, which is 5 percent smaller than they were told they were getting. With 58 less sq. feet at $511.23 per sq. foot, Lieber and Matush claim they are paying nearly $30,000 more than the condominium is worth.
Lieber said he first became suspicious about the size of the unit when he heard from friends that the condos of the same model were being advertised at an average size of 1,173 sq. feet.
When his suspicions were proven correct after the receiving the appraisal, Lieber sent a letter March 2 to RTS Residential Block 5, LLC, requesting either compensation of the $29,651.34; a comparable 1,198 sq. foot, two-bedroom, two-bathroom condo with incentives; or the return of their down payment.
"The only response was non-responsive," said Lieber.
When his letter went unanswered, he sent a second letter March 7 reiterating his request for action to be taken.
"We can only ascertain from your failure to respond that you are not interested in reaching a mutually agreeable solution to this dispute," Lieber wrote.
On March 9, Lieber received a brief letter from John B. Raftery, an attorney representing RTS Residential Block 5.
"My client has reconfirmed that the square footage is indeed correct," Raftery wrote. "In response to your letters of March 2 and March 5, my client does not believe any adjustments (as you propose) are warranted or justified."
Lieber said he was not satisfied with the response, as they left many questions unanswered.
"They refused to identify how they measure square footage," said Lieber.
Calls made to Town Square developer RD Rockville, LLC, and DANAC Corporation - which makes up one-half of RTS Residential Block 5 - were not immediately returned by press time.
Lieber testified before the mayor and council during the Citizen's Forum at Monday night's regular city council meeting, hoping to bring awareness to his issue and reach out to others who may have the same problems.
Neither the mayor nor council members responded to his testimony, but Mayor Larry Giammo said Tuesday that the issue is not one for the city government to be involved.
"It's an issue between the condo buyer and condo seller," said Giammo. "The city isn't in a position to get involved. One thing in issues like this is that there are often at least two sides to any story, and last night we only saw one side."
Lieber said he and Matush plan to move forward with arbitration, raise the issue with the Condominium Board and talk to other purchasers to explore the possibility of litigation.
"Their contract violates the Maryland Consumer Protection Act. They've failed to do their due diligence in determining whether their contracts violate the law," said Lieber. "We gave every effort of coming in with good faith...and they're aware they're in a weak legal position."

http://www.thesentinel.com/286078254240515.php

Anonymous said...

Some say RD Rockville may be headed for bankruptcy. I overheard Ross is massively over-leveraged. An offer was made from a company to purchase the property, RD declined it.

Who the hell would spend over 500/sf for a condo...in Rockville?! (and I live there, by the way)

Anonymous said...

Both these companies have other investments/properties, even if Rockville doesn't work out, I doubt they will have to file.

Anonymous said...

The late night noise in Rockville Town Square is unbelievably terrible. When the larger restaraunts start their loud music it reverberates the entire square. Especially true for Austins. When they have live bands it is so loud and the building litteraly vibrates until 1:30AM. After repeated complaints and lots of lip service, Austins has essentially said - tough luck. The Police have been little help, and for now the problem continues. It is impossible to get a good night sleep here! Further legal action is the next step.

My recommendation - DO NOT BUY OR RENT HERE!!!

 

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