| Len Forkas Photo by Peter Gridley |
Project: Unnamed project, Frederick, Md.
Developer: Len Forkas, Milestone Communities, Reston, Va.
Project size: 2.5 acres
Proposed development: Re-zone property from retail to accommodate 40 attached "stacked" townhome units.
Landowner: A private investor who purchased it more that 10 years ago
Site considerations: An L-shaped parcel tucked in behind a filling station, the site has been marketed as a retail site for several years.
Deal story: Milestone is strictly a development firm, and the lots for the 40 "stacked" townhomes, if secured, will be sold to one of two home building Giants that are regular customers.
The investor welcomed Forkas' proposal for two reasons. The investor's attempts to secure retail buyers had proved futile, and the yield offered by the residential project represented as much as 50% more than the retail use.
| This site did not work as retail, so Milestone showed how residential could pay more. |
The key deal points are these:
This agreement assures the landowner that any level of residential approval will ensure that the land is taken down at a good price for him. But it also allows him to share in potential upside gains in density.
Forkas likes the deal for two reasons: 1) The site clearly was not working in its previous retail designation, and 2) the residential use was in keeping with the wishes of adjoining neighbors.
"We are converting a piece to residential, and since the contiguous properties are multifamily, we thought our proposal would offer a compelling argument in favor of the change in land use from commercial to residential," Forkas says. "Those neighbors would otherwise be looking at loading docks and rear doors."
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