CALGARY, AB: Westphalia Dev. Corp. (the “Corporation”) announced today its results for the fiscal year and fourth quarter ended December 31, 2020. Launched in March 2012, the Corporation acquired for development the 310-acre Westphalia Property (the “Property or the “Project”) located in Prince George’s County, Maryland, United States.
Review of Operations
The Corporation continues to actively seek purchasers and developers for the lands associated with Phases 2 and 3 as well as other more immediate opportunities associated with the Phase 1 retail and residential lands. The Corporation intends to renegotiate or refinance its senior debt with its lender, WWMN, LLC. The key activities undertaken by the Corporation during the year ended December 31, 2020, were as follows:
- Continued construction on the Woodyard Road Interchange project.
- Continued construction on the Presidential Parkway East project.
- Awarded the Presidential Parkway West construction project and began rough grading.
- The Corporation has negotiated numerous letters of intent for differing uses on various parcels throughout the Property.
- The Corporation continues to negotiate two purchase and sale agreements.
The single-family market in the Washington, D.C. metropolitan statistical area, and specifically in the Prince George’s County submarket, continues to be strong which has led to increased builders’ interest in purchasing raw land to develop and construct on their own lots.
Management continues to focus on strategies to maximize the returns of the Project, which include, but are not limited to:
- The Corporation has engaged a leading Real Estate services and mortgage firm to assist in the refinancing of its senior loan.
- The Corporation continues to have discussions with a regional retail developer to develop the retail portion near the entrance of the project at the Woodyard Road Interchange, however the impacts of COVID-19 have directly impacted the retail market in general.
- The Corporation has engaged a broker to help identify other possible retail partners while continuing to work on agreements with interested regional developers.
- The Corporation is working to finalize agreements with a national publicly traded homebuilder to develop land associated with the residual Phase 1 residential lands.
- The Corporation continues to work with the local community, County leadership, and internal staff to re-plan additional development within the Westphalia Town Center. The Corporation also continues to work with the various consultants to implement a shift in the project’s scope after having received input from those detailed above by reducing the significant retail and office space that had been previously planned.
Fourth Quarter and Year End Financial Results
The Corporation did not recognize any revenue in the fourth quarter of 2020. During the year ended December 31, 2020, the Corporation recognized revenue on contracts of $18,868,800. The cost of sales relating to the lot sales was $18,716,794, including selling costs and commissions. Cost of sales for the year ended December 31, 2020, also included impairments on land development inventory of $2,469,865. The revenue and cost of sales recognized for the year ended December 31, 2020, was in respect to the sale of 18 Phase 1 single family lots to home builders and the Phase 1A bulk land sale to Galaxy NC, LLC.
For the year ended December 31, 2020, the Corporation generated a comprehensive loss of $3,419,241. When compared to the year ended December 31, 2019 comprehensive loss of $1,613,792, there is a variance of $1,805,449 between the respective year ends. The variance is largely due to an impairment of $2,469,865 recognized during the year ended December 31, 2020. The breakdown of the comprehensive loss generated is detailed in the Management Discussion & Analysis.