2021 | Development

Gaithersburg officials, developer remain at odds over Lakeforest Mall master plan

WRS says property owners not included in process, but city disagrees

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From planning documents

Gaithersburg officials and a South Carolina developer remain at odds over the future of the Lakeforest Mall site.

WRS Inc., which bought the core of the mall in 2019, has accused the city of not including it in the process of drafting the master plan, and thinks the city’s vision is flawed. The city has said WRS’s input was included.

When WRS bought part of the mall two years ago, it did not acquire the four anchor properties: Lord & Taylor, J.C. Penney, Sears and Macy’s. Of those four, only Macy’s remains in business. However, the parent companies of the other parcels still own them.

The City Council agreed multiple times to give WRS time to acquire the four anchor properties. When the company was unable to, the city imposed a 12-month development moratorium in August 2020, so the city could develop a master plan for the best use for the site.

In October, WRS placed a poster of a conceptual plan for the site in the food court of the mall. It calls for hundreds of townhomes, condominiums and multifamily apartment units.

The plan also calls for a grocery store, a home improvement store, a “wholesale club” retailer and restaurants. There would be 1,000 surface parking lot spaces.

Throughout the spring and summer, the City Council and Planning Commission have discussed the master plan for the Lakeforest site. The master plan calls for rezoning the 102-acre site from general commercial to mixed use.

Recommendations and mandates in the plan include:

  • An “integrated and coordinated mix of uses” such as collaborative work spaces, integrated light manufacturing, research and development, and community/civic uses
  • Housing at various price points
  • An interconnected network of community and green space
  • A mandate that at least 35% of the 102-acre site be green space
  • Improvements to the existing transit center or the construction of a new transit center
  • Removal of uncontrolled right-turn lanes; addition of crosswalks
  • A grid-street pattern safe for pedestrians and bikers
  • A cap of 1,600 residential units and percentage caps on housing types
  • A 5-acre limit for buildings entirely used for retail. The limit includes surface parking lots. The buildings’ footprints could not exceed 30,000 square feet.

In a letter to the city on May 19, WRS Executive Vice President Kevin Rogers wrote that the master plan is “replete with undefinable, mis-defined or mis-applied terms, phrases and planning jargon” and that there is “no sense of urgency” in ensuring that the plan is receptive to the market. Rogers wrote that the master plan could take years or decades to fully implement.

“Based on our lengthy conversations with neighbors, those for whom the Lakeforest Mall sits across from or at the doorsteps to their communities, years or decades is unacceptable,” he wrote. He added that the other property owners might be forced to lease or sell their parcels to the first user that comes along and is permitted to occupy the space under the current zoning.

“This would be done only for the obvious reality that no private business owner will continue incurring financial losses until that ‘decades’ moment in time arrives,” he wrote. “Should that occur, it will in fact be decades before any redevelopment occurs.”

Rogers was among those who spoke before the council and Planning Commission during a public hearing on June 7. He reiterated his belief that the anchor store owners would lease or sell their properties in the event that the final master plan is not one they support.

“Similarly, absent any course correction, we as owners of 47 acres of the 100 acres, will do the same thing with our existing facility under the current zoning,” he said.

Rogers added that the five property owners were not involved in drafting the master plan. He urged the city to include them in the finalization of the master plan, which is expected over the course of the next two months.

Attorneys representing WRS also spoke during last week’s meeting.

Bob Dalrymple, of Selzer Gurvitch, said the reuse of the mall is more viable than the execution of the city’s master plan, and the city’s concept is “not responsive to the market.” Further complicating matters, he said, is the reciprocal easement agreement that requires all five owners of the site to agree on any changes to the property, which they currently don’t.

“It’s a nice plan with a lot of nice ideas, but it’s fictional. It’s not reality,” he said.

Matthew Gordon, another attorney with Selzer Gurvitch, said he wants the mandates in the master plan on residential and commercial uses to be more flexible, noting that Crown Farm is an example of a development that has more flexible buildout standards.

“Those have allowed for market demands to dictate the mix of residential and commercial development,” he said. “While there are development caps in Crown Farm, there are not specific percentages of residential unit types allowed or limitations on the size of retail uses.”

City officials respond

Following the public comment portion of last week’s meeting, Gaithersburg Mayor Jud Ashman asked city employees if they sought input from the five property owners in the drafting process for the master plan.

Sharon Disque, the city’s economic development manager, said the city contacted all five owners multiple times.

“We included a meeting with all the owners before the draft, and then after the draft was prepared, we tried to schedule meetings with all of the individual owners, as well,” she said.

John Schlichting, the city’s director of planning and code administration, said the city contacted the owners “consistently and constantly.” He added that the city received feedback from WRS.

“We are completely on top of where [the owners’] positions were throughout the process,” he said.

Council Member Neil Harris told Bethesda Beat in an interview following an event at Novavax’s new headquarters last Thursday that WRS “absolutely was invited to participate throughout the process.”

“The challenge here is that the developer came up with an initial concept that was not what we see as the future of a site like that or other sites like that in the city,” he said. “It was much more focused on big-box stores with large acres of surface parking lot.

“Which is how things used to be, but if you look around Gaithersburg at Kentlands, at Crown Farm, at Parkland, that’s not how we’re doing development these days. We’re doing mixed-use development with a smaller footprint of retail and a mix of restaurants and things like that.”

Harris said the city can’t force the Lakeforest owners to redevelop the property in line with the master plan, but he noted that any redevelopment must be approved by the city.

“So, we can’t compel them to do the right thing, but we can prevent them from doing the wrong thing,” he said.

Others weigh in

A number of other residents and community members spoke during last week’s meeting, with some voicing support.

Marilyn Balcombe, the president of the Gaithersburg-Germantown Chamber of Commerce, said she agrees with the mixed-use concept, although the chamber worries that the involvement of multiple owners could complicate any redevelopment.

Balcombe said the chamber agrees with having multiple types of housing on the site and wants townhomes included. The chamber, she said, wants the 30,000-square-foot cap on the buildout for retail buildings to be amended to a recommendation, rather than a requirement.

Lisa Henderson, a resident near Lakeforest, said she appreciates the diversity of housing options and price points.

“I wanted to voice my support for the range of pricing for housing that will be included, and to include market-rate housing, which will be a nice complement to the Novavax headquarters and the increased workforce that will bring to the city,” she said.

The Planning Commission is accepting comments on the master plan until July 9 and vote on it July 21. The City Council will accept comments until July 30 and vote on it Aug. 16.

The development moratorium expires on Aug. 17.

Dan Schere can be reached at daniel.schere@bethesdamagazine.com