Developer pulls out of East Campus project

East Campus’ primary development team, Foulger-Pratt/Argo, pulled out of the project last week, in a move university officials acknowledged will delay the 38-acre development’s schedule and scale back its scope.

Vice President for Administrative Affairs Ann Wylie said FP-Argo struggled to secure the loans needed to pull off their $900 million proposal that included a four-star hotel, an upscale shopping district and white-tablecloth restaurants.

But Wylie said that the university will try to buy the development firms’ site plan and work with multiple developers to build the project piece-by-piece. Partnerships to build the Birchmere music hall and a 650-bed graduate student housing project are already in place, and Wylie said the university could break ground on the project as soon as January.

East Campus has been billed as the largest redevelopment to come to College Park in at least 50 years.

Financing an undertaking of that magnitude might have been possible when FP-Argo signed onto the project in 2007, Wylie said, but now only smaller loans are available. The project had been stalled since earlier this year.

“I think what you have to think about is when they signed on, huge projects in huge chunks were possible,” she said. “Money was flowing — we were in this ‘go-go-go’ period. Now the idea of finding a loan for $200 to $300 million is hard.”

Wylie said it is possible that the university will continue to work with FP-Argo on parts of the project, but described the university’s decision to break ties with the company as a “relief” because now the university can begin on the project slowly, without waiting until the market recovers

“The world has changed on us,” Wylie said. “Doing the project all at once is like biting off a huge piece of steak — it tastes good but you can’t possibly swallow it.”

FP-Argo Principal Richard Perlmutter did not return calls for comment this weekend.
District 2 Councilman Bob Catlin said the break between the university and FP-Argo didn’t come as a surprise. FP-Argo had repeatedly asked for increased public funding in the form of tax breaks.

Some of that money was available, Catlin said, but it wouldn’t have been enough to get the project off the ground.

“It was sort of obvious it wasn’t going anywhere,” he said.

Many hurdles remain for the project, Catlin added. For instance, the university will have to file new detailed site plans with the county and get approval, a process that can take years.
David Daddio, alumnus and editor of the development blog Rethink College Park, said he was unsure whether the university “has the wherewithal to pull it off.”

Still, he said its new development strategy could also have an upside.

“The concern that we had [earlier] is that when you build all at once it kind of has a Disney World effect,” said Daddio, a former columnist for The Diamondback.

But now that the university has to build the project piecemeal, Daddio said it is more likely East Campus will blend in with the surrounding community.

“It sounds like [the university] is trying the less risky, probably most feasible strategy,” he said. “It could actually be a good result.”

Wylie said the university’s next step will be to figure out where to relocate the greenhouses, mail building and other facilities on the East Campus site, a process that has been partially stalled by debate concerning the Wooded Hillock. University officials plan to move those facilities to the Hillock — nine acres of forest at the north tip of campus — but student groups oppose the decision because of environmental concerns.

If the issue is resolved by January, Wylie said, they will start clearing the site immediately and begin construction in 2011.

“We’re extremely optimistic,” she said. “I’m not just B.S.-ing you here.”

cwells at umdbk dot com