A development company is seeking more than $160 million in damages from Metro in a lawsuit charging breach of contract and fraud over a stalled mixed-used development at the Greenbelt Metro station.
The Greenbelt Station Towne Centre was slated to be built on a 78-acre Metro-owned tract in adjacent to the Greenbelt Metrorail station. It was planned as a mixed-use project containing 270 residential units, 800,000 square feet of retail, a million square feet of office space, a hotel and a conference center.
The plan attracted attention from surrounding local governments and the state as a transit-oriented development near the Capital Beltway and Metrorail, helping it win tax increment financing, special taxing district legislation and state funding.
Under a joint development agreement signed in December 2000, Metroland Developers LLC agreed to pay Metro $6.4 million for the land and build parking for Metro riders at the station. But in 2006, Greenbelt Ventures sought to take over the development from Metroland for $40 million. Greenbelt Ventures’ lawsuit, transferred from state court to U.S. District Court in Greenbelt last week, says Metro “concluded it has struck a bad economic bargain” and later tried to renegotiate the deal for $11.2 million.
Metro then delayed approval of the changeover. But during the time, the suit says, Metro officials met with Greenbelt Ventures representatives “as if it has already given the consent or approval” and “deliberatively misled and deceived” the developers. The developers say they spent millions.
“Particularly in this economic time we are facing, to hold back a project of this magnitude and promise is simply not acceptable,” said David Sheehan, with Baltimore law firm Brown & Sheehan representing Greenbelt Ventures. (His partner, Michael A. Brown, is not the same Brown who is a D.C. councilman serving on Metro’s board of directors.)
“Particularly in this economic time we are facing, to hold back a project of this magnitude and promise is simply not acceptable,” said David Sheehan, with Baltimore law firm Brown & Sheehan representing Greenbelt Ventures. (His partner, Michael A. Brown, is not the same Brown who is a D.C. councilman serving on Metro’s board of directors.)
Metro spokesman Steven Taubenkibel said the agency would not comment on the pending litigation.
The case is the latest trouble for Metro over joint development agreements, said Cheryl Cort with the nonprofit Coalition for Smarter Growth. “There have been a lot of unhappy relationships,” she said.
Greenbelt ran into problems with the developers and with Metro on the project when it wasn’t included in discussions with the transit agency, said the city’s planning and community development director, Celia Craze.
“We had an expectation of transparency dealing with a public agency,” she said. “Of course they aren’t a public agency.”
But Cort said the lawsuit stems from “a legacy of an old way of doing things.” Metro convened a task force that culminated in November 2008 to create guidelines for how Metro should improve planning on joint development by involving communities before soliciting projects from private developers, she said.
