August 2013
"My only regret is that we didn’t do this a year ago."
Dori Nipps, Executive Director, PenMar Development Corporation
CLIENT: The PenMar Development Corporation was established to oversee the redevelopment for civilian use of the deactivated Fort Ritchie military base. The property initially was sold to a private developer who had plans to create an office park for defense and national security contractors with housing for their employees. Redevelopment plans were stalled by a lawsuit filed in 2005 and then by a faltering economy. In July 2012, the 600-acre base was returned to PenMar. Located near the Camp David presidential retreat and tucked into a valley surrounded by forests and farms among Maryland’s tallest mountains, Fort Ritchie is within easy driving distance of suburban Washington, DC.
CHALLENGE: In the wake of the developer’s surrender of the property and abandonment of the development venture, PenMar leadership needed a fresh set of eyes to: (1) assess whether PenMar’s organizational structure facilitates or hinders redevelopment efforts; (2) clarify the economic development goals and objectives for PenMar; (3) delineate credible reuse options for Fort Ritchie; (4) prepare a strategic plan and outline the sequence of actions necessary to implement it; and (5) develop clear criteria with which to screen, evaluate and prioritize promising opportunities and eliminate impractical options.
ASSESSMENT: In early August, 2013, the six-member Consulting Corps team engaged in a five-day on-site process of conducting several dozen interviews with key stakeholders of Fort Ritchie, touring the area to acquire a sense of the surrounding region, physically inspecting many of the buildings on the base, conducting market research, and evaluating redevelopment opportunities.
RECOMMENDATIONS: The team recommended that PenMar first resolve a number of important governance issues, including strengthening its Executive Committee and establishing an evaluation process to prioritize opportunities, in order to facilitate reaching consensus and taking rapid action. Additionally, the team recommended hiring a project manager to focus on redevelopment opportunities.
In the short term (two years or less), a number of income-producing uses were suggested. These included (among others): a park connecting to the nearby Appalachian Trail, a destination restaurant/inn, a light industrial kitchen facility for food entrepreneurship, a data center, or an age-restricted living complex (Del Webb style). Long term, the Consulting Corps team believes more extensive income-producing uses for Fort Ritchie are possible, including a golf resort, single and/or multifamily residential, institutional, retail, office and light industrial.
As an immediate step toward a long-term solution, the team proposed a 90-day action plan to accelerate the achievement of viable short-term real estate solutions that would buy time for the development and implementation of an effective long-term strategy.
"In a life of more than my share of splendid professional experiences, and working with more than my share of talented people, this was one of the very best things I’ve done."
Charles N. Schilke, CRE
TEAM: Team members included: Byron R. Koste, CRE, executive director emeritus, University of Colorado Real Estate Center, Boulder, Colo.; Owen M. Beitsch, CRE, principal, Real Estate Research Consultants Inc., Orlando, Fla.; James S. Olin, CRE, owner, C2G Advisors LLC, Franklin, Tenn.; Franc J. Pigna, CRE, managing director, AEGIR LLC-Port Property Advisors, Miami Beach, Fla.; Charles N. Schilke, CRE, Director, The Edward St. John Real Estate Program, The Johns Hopkins Carey School of Business, Washington, D.C.; and Jerry W. Turner, Jr., CRE, Principal, T4 Investment Solutions LLC and T4 Housing Interests Management LLC, Houston, Texas. The CRE Consulting Corps extends special thanks to Sydney L. Machat, CRE, Prudential Bowen Realty, Hagerstown, Md., who not only recommended the CRE Consulting Corps as a solution to the PenMar Development Corporation but also provided valuable assistance as a local resource.
Update:
If you are aware of an organization in your community who could benefit from CRE Consulting Corps assistance, please contact Samantha DeKoven in the CRE office (312-329-8431; sdekoven@cre.org).