Challenge

The senior living subsidiary of Adventist HealthCare a number of its subsidiaries decided to sell six skilled nursing facilities. The sale to Genesis HealthCare involved multiple owners and jurisdictions.

Strategy

Adventist HealthCare owned five of the facilities and one was jointly owned by Frederick Memorial Hospital. Four of the facilities were located in Montgomery County, and the remaining two were located in Prince George's County and Frederick County. The multi-million dollar transaction, which took the better part of a year to complete, involved the sale and lease of real estate, the sale of the ongoing business operations of the nursing facilities, defeasance of bond financing, and various ancillary issues. Lerch Early attorneys worked closely with in-house counsel and a number of other representatives of Adventist HealthCare to negotiate the sales contracts, satisfy due diligence requirements, and successfully complete the transfer.

Result

Adventist HealthCare now is able to focus care for the community’s senior population through its various programs, partnerships and entities.

Challenge

Lerch Early serves as primary outside real estate counsel to Howard University.  For the past several years, the now 150 year old University has been leveraging certain of its Washington, DC real estate assets to improve the campus environment and the experience of its most valuable assets – the students, faculty and staff of the University. 

Strategy

In 2016-2017, Lerch Early attorneys worked with the University’s internal legal and finance teams and its outside real estate advisor, Alvarez and Marsal, to structure a unique arrangement among  Howard Dormitory Holdings 1, LLC, a wholly-owned and title-holding company of Howard University, and Howard University (collectively, the “University Parties”) and Corvias Campus Living, LLC (“Corvias”).  Lerch Early represented the University Parties in drafting and negotiating the concessionaire, project management and residential life agreements, entity formation agreements, construction contracts, financing documents, and other operative  agreements in connection with the transaction, as well as assisting the University Parties in addressing and resolving numerous legal and business issues associated with the transaction. 

Results

The innovative 40-year partnership among the University Parties and Corvias raised $144 million, a portion of which will fund the renovation and modernization of the Howard Towers, will provide for the ongoing management of the Howard Towers and two additional residence halls, and will create, for the long-term, a sizable reserve fund for future capital expenses.    

Challenge

A consortium of businesses wished to transform plans for a hospital and medical offices on a 68-acre portion of the Cabin Branch mixed use community in Clarksburg to a 450,000 square foot outlet. The project faced intense resistance from a competing outlet operator, which vigorously opposed the zoning change because they wanted to build a competing center just across the highway. We represented Simon Properties, one of the largest retail property owners/developers in the world.

Strategy

Serving as lead land use counsel, we demonstrated to planning and government officials that this was an important economic opportunity for Montgomery County and Clarksburg. The retail center would bring 1,800 new jobs, and, unusual for an outlet center, would include activity and performance spaces and complete pedestrian and bicycle trails connected to local parks and communities. Issues included revisions to the development plan, securing site plan approvals, road widening, electric power substation issues and the water quality protection.

Result

Ultimately, the project was designated as a Strategic Economic Development Project by the County Executive. We secured all approvals for the first phase of the project, and Clarksburg Premium Outlets opened in 2016.

Challenge

Starbucks wished to redevelop a site in Burtonsville into a new Starbucks restaurant that would include a drive-thru. Before Starbucks retained Lerch Early, the project had become “stuck” in the review process.

Strategy

We identified key decision makers in County government and worked with County leaders of our zoning interpretation and path to approvals.  This involved multiple meetings with planning staff and officials, as well as testimony before the Hearing Examiner.

Result

Starbucks received all approvals necessary to redevelop a key strategic location with the Starbucks required amenities.

Challenge

New England Development had a vision of transforming the site of a Hecht’s department store with a sea of surface parking located in the epicenter of Friendship Heights directly above the Metro into one of the first truly mixed-used, transit-oriented developments in Montgomery County. The County was revising the Friendship Heights Sector Plan, and many of the communities surrounding the property were circling the wagons to limit development.   

Strategy

New England Development, together with our firm and the May Department Stores Company, adopted an approach radically different from the traditional developer vs NIMBYs wars typifying development at that time. We worked closely with the various major property owners and the Village of Friendship Heights to arrive at a common, integrated proposal for the Friendship Heights Sector Plan that considered the neighborhood as a whole.  We then worked closely with planning and government staff and officials through the County Council’s adoption of the Sector Plan. Once the Council adopted the plan, we immediately engaged with the entire Friendship Heights community to create a development proposal that garnered community support rather than opposition.  Through many meetings with community leaders, we listened to concerns and desires. For example, a hot ticket item was keeping a sense of community and the need for a recreation center.  As a result, through hard work and design efforts, we incorporated a County community center into the project. This effort established significant credibility and good will.

Result

This importance of creating consensus led to an unheard-of level of trust and support between the community and developers. Planning Board members publicly touted this project as a model of successful community outreach. New England Development, Boston Properties, and Archstone secured approvals for Wisconsin Place, which today is a million-plus square foot thriving mixed-use community, featuring more than 300,000 square feet of retail, including a Bloomingdale’s Department Store, office space leased to Microsoft, a 24,000 square foot County community center, and 432 apartments for those who wish to live, work, shop, and dine in a vibrant neighborhood atop the Metro. Since the initial approvals, we have received approval for a number of modifications and amendments, using the same model of a holistic approach coupled with community outreach to attain successful outcomes.

Challenge

Lerch Early client Lee Development Group had owned property in downtown Silver Spring for more than 50 years that was adjacent to two aging buildings owned by a quasi-governmental housing commission.  The existing uses on all three properties needed renovation or full redevelopment.   

Strategy

We led negotiations for a joint development strategy to redevelop the entire block as a quality, high-end mixed-use project, with significant affordable housing in the project.  “High-end” and “affordable” usually don’t go together in commercial real estate; however, this project shows they can. LDG and the Housing Opportunities Commission of Montgomery County together are developing Elizabeth Square, which will include residential housing, including expanding affordable and workforce housing with a large seniors component, along with retail, recreational, health services, and educational facilities.

The project will advance in stages to accommodate the transition of residents from the existing senior living property into a new affordable building with the integrated public services, allowing demolition and replacement of the existing obsolete senior building with another new modern and mixed affordable building. We created a land development agreement allowing the parties to pursue the regulatory approvals, and secured project and subdivision plans for the overall project and site plan approval for the first stage. We developed a condominium structure and air rights lease for the operation of the first new building.

Result

Elizabeth Square gives HOC a revitalized presence in downtown Silver Spring, just blocks from the Metro, keeping seniors in their existing community in a modern, energy-efficient building supported by market rate amenities. 

Challenge

The Church of Jesus Christ of Latter-day Saints faced an unexpected property tax assessment when the Maryland Tax Court ruled that a Montgomery County apartment complex where it housed religious workers no longer qualified for the property tax exemption it had held for nearly 30 years.

Strategy

The Tax Court adopted the state’s narrow (and arguably discriminatory) definitional approach that excluded the purposes for which the client church’s properties were being used to deny the exemption. We demonstrated to the Montgomery County Circuit Court and then to the Maryland Court of Appeals that the apartment complex qualifies as a “convent,” because the church uses the properties exclusively to house a community of people who live together, follow strict religious vows, and devote themselves full-time to religious work, thus meeting the statutory definition and avoiding discrimination in favor of particular denominations allowing only “nuns” to live in properties called “convents” as a doctrinal matter.   

Result

The Maryland Court of Appeals upheld and reinstated our client’s tax exemption. This allowed the church to continue housing visiting religious workers who leave their homes and families to devote themselves to a two-year commitment to ministry in the temple.

Challenge

The architectural and environmental control committee of a Lerch Early homeowners association client approved construction of a fence. A neighbor challenged the approval before the association’s board of directors, which upheld the committee’s approval. The neighbor then filed a complaint before the Montgomery County Commission on Common Ownership Communities.

Strategy

Lerch Early demonstrated that the association acted properly and the board of directors rendered its decision without fraud or bad faith. We asked that the CCOC abide by the business judgment rule, by which a court will not interfere in the internal affairs of a corporation, absent fraud or bad faith.

Result

The CCOC ruled that the association had the discretion on how and to what extent to enforce its rules and dismissed the complaint.

Challenge

Our clients’ father passed away and the executor of his large estate (our clients’ cousin, the nephew of the deceased) had paid himself several hundreds of thousands of dollars in commissions, even though he had performed only a series of ministerial tasks in his role as executor. Maryland statutory law permits executors to take a fixed percentage of the estate as compensation for their services, just as the executor in this case had done.

Strategy

In a case of first impression, Lerch Early convinced a three-judge panel of the Orphans Court for Anne Arundel County that in this case, the executor’s fees were excessive, even though they were within the percentage allowed by statute, because it would have resulted in a windfall for the executor.

Result

Accepting our argument that being named executor should not be a “lottery ticket” in a large but uncomplicated estate, the Orphans’ Court required the executor to return $100,000 in excess compensation to the estate for distribution to our clients, the beneficiaries.

Challenge

Our clients’ father passed away and the executor of his large estate (our clients’ cousin, the nephew of the deceased) had paid himself several hundreds of thousands of dollars in commissions, even though he had performed only a series of ministerial tasks in his role as executor. Maryland statutory law permits executors to take a fixed percentage of the estate as compensation for their services, just as the executor in this case had done.

Strategy

In a case of first impression, Lerch Early convinced a three-judge panel of the Orphans Court for Anne Arundel County that in this case, the executor’s fees were excessive, even though they were within the percentage allowed by statute, because it would have resulted in a windfall for the executor.

Result

Accepting our argument that being named executor should not be a “lottery ticket” in a large but uncomplicated estate, the Orphans’ Court required the executor to return $100,000 in excess compensation to the estate for distribution to our clients, the beneficiaries.