Monday, November 23, 2009

Bethesda Police Station Swap


JBG and Montgomery County police officials are haggling over plans for the current and future Bethesda police stations at a time when JBG is reconsidering its development partners for the prime site which sits directly across from the Bethesda Metro. Last October, Montgomery County issued a Request for Proposals (RFP) for redevelopment of the 2nd District County Police Station in downtown Bethesda. Located at 7359 Wisconsin Avenue, at the corner of Wisconsin and Montgomery, the site has approximately 21,400 ground s.f. to offer. After receiving two responses to the RFP, in the first quarter of 2009 the County selected the proposal submitted by a partnership headed by JBG. Negotiations for the terms of the agreement should be complete in the first half of 2010. Once JBG makes it official, the developer will begin the zoning process for the new police station.

According to Ken Finkelstein, Managing Director at JBG, in return for the site of the current station, the developer will likely do a land swap with the county for property sitting on Cordell Avenue between Wisconsin and Woodmont Avenues. When the JBG partnership initially submitted their RFP in December of 2008, the development group included JBG, one of their affiliates and the Goldstar Group. However, Finkelstein said it is "unclear at this time if Goldstar will continue to get involved;" a fairly major detail the group is "still trying to figure out."

The County opted for an RFP because the current station is too small and "it didn't make sense to put more money into it," according to Gary Stith, Deputy Director of Planning and Special Projects within Montgomery County Department of General Services. When the County released the RFP, they indicated they were looking for a mixed-use development with a long term lease with the County as landlord. The RFP also said developers with the means to build a new station at another site in the immediate area would be offered a juicier deal than offers looking for a “simple conveyance of the Site" - i.e., the title to the land without the obligation to build a new station or exchange land. Sounds like that's why the application review committee, which consisted of county and police officials, picked JBG.

Assuming everything works out in negotiations with the County, the developers will head before the Maryland-National Capital Park and Planning Commission (M-NCPPC) pursuing review under the optional method of development, which gives developers the right to a significantly higher density in the downtown area in exchange for amenities like open space. Stith said the planning and zoning process could take a full year. Finkelstein estimated the groundbreaking would be another two or three years down the line, which is probably a relief to the current tenants of the older retail buildings on the proposed site of the new police station.

The site involved in the RFP would likely see demolition of the old police station, once the law enforcement agency moves into a shiny new home. JBG's proposal calls for an office at the Wisconsin Ave location, which Finkelstein said could be anywhere from 125,000 to 250,000 s.f. And in a sweet location to boot.

Update, Nov. 24: Michael Brodsky, CEO at the Goldstar Group, contacted DCMud to say he took "exception" to the statement made by Finkelstein, adding that the RFP was awarded to a 50-50 partnership between JBG and Goldstar. Brodsky stated that to the extent that the partnership ceases to exist in the future so does the RFP award which was given to the partnership. The partnership between JBG and Goldstar was closely linked to a building owned by Goldstar behind the current police station. The partnership would potentially then redevelop the entire corner, rather than just the police station. Brodsky said if JBG and Goldstar are unable to agree to a partnership, the "entire deal is off."

Bethesda Real Estate News.

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