Corporate Office Properties Trust Expects Further Delays in Fort Ritchie Litigation
COLUMBIA, Md.--(BUSINESS WIRE)-- Fort Ritchie was closed in 1998 as part of the military's Base Realignment and Closure (BRAC) program. Corporate Office Properties Trust (COPT) purchased 500 acres of the site from PenMar Development Corporation (PenMar) in October 2006 for $4.2 million, and paid approximately $775,000 in November 2007 for the remaining 91.5 acres. Since acquiring the site, COPT has progressed only modestly on plans to redevelop Fort Ritchie into a unique mixed-use development that integrates the Fort's historic stone structures with state-of-the-art office, retail, recreational, and residential facilities.
As a result of pending litigation initiated in May 2005, the United States District Court for the District of Columbia (the Court) required COPT, effective November 2009, to cease further development at Fort Ritchie pending resubmission by the U.S. Army of a revised Record of Environmental Consideration or a Supplemental Environmental Impact Statement, which complies with the Court's order. COPT now expects further delays in this litigation, owing to the discovery of new information relayed this week to the Company by the Army.
On February 15, 2011, the Army disclosed to COPT a study published by the Department of Defense in December 2006 (2006 Report) regarding the testing and use of tactical defoliants/herbicides at various military installations throughout the United States, including Fort Ritchie. In addition, on February 17, 2011, the Army disclosed to COPT a report published in 1956 by the Chemical Corps Research & Development Command Biological Warfare Laboratories titled "Defoliation Investigations During 1954 and 1955" (1956 Report), which describes other testing and the use of tactical defoliants/herbicides at Fort Ritchie.
COPT was not made aware of the 2006 Report, the 1956 Report, or the prior use of tactical defoliants/herbicides at Fort Ritchie until this week. COPT is working with the Army and PenMar to determine the precise locations and extent of the testing conducted within Fort Ritchie and does not have any further details at this time.
Company Information
Corporate Office Properties Trust (COPT) (NYSE:OFC) is a specialty office real estate investment trust (REIT) that focuses primarily on strategic customer relationships and specialized tenant requirements in the U.S. Government and Defense Information Technology sectors and data centers serving such sectors. The Company acquires, develops, manages and leases office and data center properties that are typically concentrated in large office parks primarily located adjacent to government demand drivers and/or in strong markets that we believe possess growth opportunities. As of December 31, 2010, the Company owned 272 office properties totaling 21.1 million rentable square feet, which includes 20 properties totaling 1.1 million square feet held through joint ventures. The Company's portfolio primarily consists of technically sophisticated buildings in visually appealing settings that are environmentally sensitive, sustainable and meet unique customer requirements. COPT is an S&P MidCap 400 company and more information can be found at www.copt.com.
Forward-Looking Information
This press release may contain "forward-looking" statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "could," "believe," "anticipate," "expect," "estimate," "plan" or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements.
Important factors that may affect these expectations, estimates, and projections include, but are not limited to:
-- general economic and business conditions, which will, among other
things, affect office property demand and rents, tenant
creditworthiness, interest rates and financing availability;
-- adverse changes in the real estate markets including, among other
things, increased competition with other companies;
-- the Company's ability to borrow on favorable terms;
-- risk of real estate acquisition and development, including, among other
things, risks that development projects may not be completed on
schedule, that tenants may not take occupancy or pay rent or that
development or operating costs may be greater than anticipated;
-- risks of investing through joint venture structures, including risks
that the Company's joint venture partners may not fulfill their
financial obligations as investors or may take actions that are
inconsistent with the Company's objectives;
-- changes in our plans or views of market economic conditions or failure
to obtain development rights, either of which, could result in
recognition of impairment losses;
-- our ability to satisfy and operate effectively under federal income tax
rules relating to real estate investment trusts and partnerships;
-- governmental actions and initiatives; and
-- environmental requirements.
The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company's filings with the Securities and Exchange Commission, particularly the section entitled "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
Source: Corporate Office Properties Trust (COPT)
Released February 18, 2011