- The Washington Times - Wednesday, August 2, 2000

The Prince William County (Va.) Board of Supervisors voted yesterday to sell 150 acres of county-owned land to a developer planning 2 million square feet of commercial space.

But some real estate executives said the $7.7 million price tag at the Innovation at Prince William business campus was too cheap.

Gilbane Properties Inc. of Providence, R.I., said it would build an 85,000-square-foot office or "data center" on a 19.6-acre parcel within four months.

Data centers are fortress-like facilities that house the computer equipment used by Internet service providers and other technology companies.

Gilbane said it also would develop more than 1.9 million square feet of additional office and industrial space on the remaining 130 acres.

Innovation is a business park near Manassas, Va., that is owned primarily by the county. The sale would be the county's largest transaction in the park.

The eight-member Board of Supervisors voted unanimously to sell the 19.6-acre parcel for $2.1 million, or $2.50 per square foot. The supervisors agreed to sell the remaining 130 acres for $5.6 million, or $1 per square foot.

Some real estate executives said the county was selling the land too cheaply, saying the market rate for similar land in Prince William is about $2.50 per square foot.

"The county doesn't belong in the real estate business," said one broker, who spoke on the condition of anonymity.

Guy Gravett, a broker at Farms & Acreage Inc. in Oakton, Va., said he didn't know enough about the deal to determine if the land was being sold at a fair price. But he said he hopes the county sells its remaining stake in the park soon so "balance to the market" is restored.

John Schorfield, research director for the Prince William County Department of Economic Development, said the county appraises the land in the park twice a year to ensure it is sold at market rates. The most recent appraisal showed the land Gilbane will buy is worth about $8 million, Mr. Schorfield said.

Since 1997, the county has sold about 300 acres in the park, including the 150 acres the county agreed to sell to Gilbane.

The Gilbane project will help loosen the tight market for office and "flex" space in the county, Mr. Schorfield said.

The vacancy rate for premium office space in the county is less than 1 percent, according to Delta Associates, an Alexandria, Va.-based real estate research firm. The rate is at 3.2 percent for all of Northern Virginia.

Flex space which can be used for offices, manufacturing or data centers is also tight in Prince William County. The vacancy rate is at 1.6 percent, below the regional rate of 2.7 percent, the company said.

Although municipal governments dabble in real estate jurisdictions like Montgomery County, Md., build and manage incubators to nurture start-up technology companies it is unusual for counties to own and operate business parks.

Paul Lawler, president of the American Economic Development Council in Chicago, said the practice has become more common in communities targeting technology jobs.

One local municipality, Calvert County in Southern Maryland, has been giving away land in a county-owned industrial park to small companies since 1997.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide