Developer behind massive Pr. George's project nears deal for supermarket anchor
Washington Business Journal, 2018/05/11
The master developer behind the massive Westphalia project in Prince George’s County is nearing a deal with a grocery store anchor, while exploring the possibility of sales or partnerships on future phases or even the entire project.
Having staved off default in 2017 through refinancings and a $42 million tax-increment financing package approved in November by Prince George’s County, Calgary, Alberta-based Walton Westphalia Development Corp. appears to be on the verge of a sea change with its 310-acre project, located along Pennsylvania Avenue across from Joint Base Andrews in Upper Marlboro.
The company has shifted its strategy, from serving the land in advance of development to “bulk selling future phases," per its year-end 2017 financial report and release.
Kimco Realty (NYSE: KIM), the joint venture retail partner on Westphalia, received two letters of intent from potential town center grocers in the first quarter, one of which it is negotiating with now and “expects to have a fully executed LOI complete” by the second quarter of 2018, according to the release issued by Walton Westphalia.
“Many smaller retailers have expressed interest in both in-line stores and individual pad sites,” Walton Westphalia, the master developer, said in the release, a reporting of both year-end 2017 and first quarter 2018 earnings. “We will begin to negotiate leases with those potential clients after we have agreed to terms with the grocer anchor.”
Walton Westphalia, meanwhile, is “engaging in discussions with commercial and residential developers to broaden the awareness of the Project and explore sales and/or partnering opportunities.” Walton Westphalia has received three LOIs for the purchase of parcels in the second and third phases of the project, including one from a “well-established regional developer with the intent to become involved in the development of the core of the town center and possibly the entire Project.”
Walton Westphalia also announced it has executed a letter of intent with a hotel developer/operator for a 100-key hotel, with the option for a second hotel of similar size, and it has executed another LOI with a “prominent” regional multifamily developer.
People are buying into Westphalia. NVR Inc. has bought 96 lots and reported 108 home sales, Haverford Homes 67 lots and 72 home sales and Mid-Atlantic Builders 42 lots and 51 home sales. There have been 140 occupancies so far, according to Walton Westphalia.
Walton Westphalia Development Corp. is a subsidiary of the Walton Group of Cos, a multinational real estate investment, planning and development group. The Alberta Securities Commission recently ordered Walton Westphalia to cease trading after it missed the April 30 deadline to file 2017 year-end financial statements. Those statements have now been completed, and the corporation will seek to have the cease trading order revoked.
This article originally appeared on Washington Business Journal.