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Fort Lincoln residents seek Norton’s help

(Published June 3, 2002)

By JOHN DeVAULT

Staff Writer

Residents of the District’s only planned community have asked congressional Delegate Eleanor Holmes Norton to intercede in their multimillion dollar dispute over the recently discovered failure of Fort Lincoln’s developer to meet contractual obligations that gave the late Theodore Hagans and his successors exclusive rights to develop 360 acres of publicly owned land in Northeast Washington.

Fort Lincoln Civic Association President Reginald C. Lyons, in a letter hand-delivered to Norton’s Capitol Hill office on May 17, asked Norton "to bring your influence to bear" on the congressionally created National Capital Revitalization Corp. (NCRC) to enforce the 1975 land contract that requires Fort Lincoln New Town Corp. to provide substantial financial benefits and a measure of control to residents.

The residents say they have turned to Norton after local officials – including their ward councilman, Vincent Orange, and At-Large Councilman Harold Brazil, who heads a panel with oversight authority – failed to respond to their letters and phone calls. Residents also say the NCRC has declined to enforce the land contract that was entered into by its predecessor agency, the District’s former Redevelopment Land Agency (RLA).

Lyons’ letter notes "a substantial federal interest" in the matter "because a major reason behind the federal government’s motivation in making this federal land available was to facilitate the production of affordable, tax-generating housing for District of Columbia residents."

"The failure to develop large sections of the residentially zoned land in Fort Lincoln, over an almost 30 year period [the development contract contemplated completion within 6-8 years], means that millions of property tax dollars from housing built on that land, that should have been available to meet pressing social needs, have not been generated," according to Lyons’ letter.

Fort Lincoln New Town, located along the Prince George’s County border in Northeast Washington’s Ward 5, was the product of an agreement by the federal Department of Housing and Urban Development (HUD) to make available, on financially favorable terms, a large plot of land it controlled for exclusive development by Fort Lincoln New Town Corp. In exchange, the District had to ensure that Theodore Hagans’ company built a full-service "town-within-a-town" on the land – a community with a substantial financial and decision-making role for residents themselves.

To that end, the RLA struck a deal with Hagans’ company – which is now headed by his daughter, Michele V. Hagans – that required that as soon as the new community got started, the developer would set up a nonprofit resident corporation and seed its operations with $250,000. The resident corporation also was to be given a 25 percent ownership interest, and at least 25 percent of the profits from the real estate management corporation at Fort Lincoln, to sustain the resident corporation as a strong player in Fort Lincoln’s development.

"Although both the development contract and D.C. law required the developer to disclose this funding, profit-sharing and equity-sharing agreement with future Fort Lincoln residents, the developer concealed its obligation from us," Lyons’ letter to Norton says.

Residents’ complaints against the Fort Lincoln developer, including their contention that Theodore Hagans defrauded them, were detailed in The Common Denominator on May 6.

"Millions of dollars, and decision making authority, that should have been shared with Fort Lincoln residents have remained the sole prerogative of the developer as a result," the letter continues. Residents say the developer’s long-unpaid obligations today total between $5 million and $10 million.

Lyons’ letter sought a response from Norton by June 1, but Norton’s press secretary told The Common Denominator on May 31 that the congressional delegate "has not seen the letter."

"The best we can do is look around for it," said Norton spokeswoman Doxie McCoy.

Civic association member Roy Pearson said he dropped off a large white-and-green envelope containing the letter and other enclosures at Norton’s Capitol Hill office on May 17.

"I handed it directly to a receptionist in Norton’s office," he said.

Lyons said he continues to hope Norton will act to pressure NCRC to enforce the contract.

"Given her position with the federal government, and HUD and the NCRC as federal entities, we think her position could influence (those agencies) to enforce the agreement the federal government has with the city," Lyons said.

"I’m very surprised to hear that they say they don’t have our letter," he said. "But I would hope that we could correct that right away and get another copy forwarded to them."

Pearson and Lyons met last December with then-NCRC official Deborah Linn. Pearson said Linn told them then that the agency would not enforce the resident-benefits section of the development contract, in part because NCRC officials wanted to work amicably with Michele Hagans on future Fort Lincoln projects, including a planned shopping center.

NCRC spokeswoman Barbara Heineback said the agency’s officials met last week with Hagans to discuss the shopping center, after Hagans’ company announced a partnership with the Peterson Co. to build the project.

Pearson said the civic association has contacted the NCRC about gaining a place at the table during discussions of any further Fort Lincoln development, as it believes the development contract mandates. But, Pearson said, NCRC officials have not responded.

Last week a consultant to the NCRC on Fort Lincoln matters, who asked not to be named, said that the he saw no reason for the civic association to be included in negotiations.

"It’s not clear to me why this newly formed civic association becomes the legal beneficiaries of this 27-year-old contract," the consultant said. "I don't think outside counsel, which we would need to consult here, would take a newly formed civic association as having legal standing here."

Pearson dismissed that argument. "Everybody who lived there was intended to benefit," he said.

Copyright 2002, The Common Denominator