This is an op-ed submitted by Mediaworld Ventures LLC. It does not reflect the opinions of Reston Now.
To our fellow Reston Association members,
We are the Reston residents who came together under Mediaworld Ventures LLC and were selected to conduct an independent review of Reston Association’s acquisition of the Lake House, and subsequent renovation budget overrun. We were selected over many applicants for our professional expertise, our commitment to service and our cost of $1. Our sole intent was to serve our membership and help Reston Association improve its processes.
From September until December, we were involved in detailed negotiations with Reston Association and its attorney over a consulting agreement that established the terms of the independent review. Our team worked countless hours reviewing and amending the 17-page agreement to ensure the review’s integrity and members’ interests were protected. The conditions presented to us were extremely restrictive and we felt they would hinder our ability to conduct a truly independent review. Further, the agreement did not guarantee a public release of the final report by the Reston Association, which our team felt was critical to “ensuring the concerns of the community were addressed” — a condition in the RFP, set by Reston Association, which we agreed to meet.
When we reached an impasse with the Reston Association attorney we requested a meeting with the Board. At a public meeting on Dec. 7, we highlighted four major issues that we felt would hinder our ability to fulfill our obligation. We believed the Board understood our concerns regarding the restrictive terms and tone of the agreement, and we hoped it would result in a more reasonable agreement, especially after we learned that the Board signed a simpler, four-page contract with another consulting firm. Although the revised agreement we received in return resolved some of our concerns, it contained additional terms and conditions leaving a number of issues unresolved. In spite of the Association’s offer to pay for liability insurance, we felt that there was still an unacceptable level of risk remaining in the last proposed revised draft. Given the almost three months of contending with some of the same issues we had raised earlier, we felt the likelihood that further negotiations would be productive were minimal and that it would be best to terminate the negotiations.
We are very disappointed that we could not come to terms with Reston Association on this work. A more detailed review of the contract negotiation can be found at http://reston2020.blogspot.com/2017/01/review-of-mediaworld-contract.html.
Sridhar Ganesan, President, Mediaworld Ventures LLC
Two years ago this month, under the leadership of former RA Board President Ken Kneuven, Reston’s homeowner association announced its deal with a local developer to purchase his property, the Tetra office building, for over twice its county-appraised value of $1.2 million. Thus began a long slide of Reston Association into bad governance and mismanagement.
How did this happen? We don’t know for sure, but we understand Kneuven and another former RA Board President, Rick Beyer, who lives on the shore of Lake Newport opposite the Tetra property, have been friends for some time. Beyer, who was active in supporting the RA Tetra purchase, and other Lake Newport homeowners were no doubt concerned that something untoward would happen to their view and, as a result, also their property values. It is not clear whether Beyer asked a favor from Kneuven in eliminating this risk by having RA pursue the purchase of the Tetra property, but what is clear is that after Kneuven left his RA post, he ended up working as a senior consultant in the company managed by Beyer.
As for the rest of us, RA and its Board justified paying $2.65 million in part by pointing out that a proposal had been drawn up to build a costly restaurant there twice the size of the Tetra building. RA didn’t bother to note, however, that the restaurant was never approved, nor would it have been given environmental restrictions and 14 easements on the property. Moreover, RA’s appraiser put the property’s “as is” value at just $1.1 million using the Income Approach, even lower than the county’s valuation. In fact, the Tetra property had been on and off the market with little interest for most of a decade.
Nonetheless, to sell the deal in a community referendum, RA “projected” that renovations, inside and out, would cost RA members just $259,000. To date, interior repairs alone have cost Restonians $692,000 — not counting $925,000 in seller contributions and a Comstock proffer to RA which could have been used for much better purposes — and an RA consultant projects proposed exterior improvements will cost $1.2 million.
On the other side of the ledger, RA projected rental income from a rent back agreement with the Tetra owners of more than $140,000 through 2016. Unfortunately, the sloppily written agreement allowed Tetra’s former owners to walk away at the end of 2015, resulting in an immediate $100,000 loss in RA revenues. RA scrambled to make up the shortfall, but — as of November — expected year-end cash flow losses reached $902,000, some $515,000 more than RA projected for 2016 during the Tetra referendum.
If publicly known at the time, these massive misstatements, mistakes, expenses and overruns would have doomed the purchase’s narrow community approval.
Indeed, the massive renovation cost overruns were not revealed until May 2016, although RA financial data indicated RA and presumably some Board members knew there would be huge overruns as early as February. Thus, RA members were denied that important information as they cast their ballots for RA Board members in February, including the re-election runs of two Board members who strongly supported the Tetra initiative, Eve Thompson and Danielle LaRosa. Of course, they won re-election in the absence of public knowledge of the huge cost overrun.
When the cost overruns were disclosed, even the complicit RA Board found this revealed reality a bit much. Under significant community pressure, it agreed last summer to contract for an independent review of the purchase and renovation.
After choosing to sign a pro bono $1 review contract with Mediaworld LLC, using a team of Reston volunteers expert in financial matters, a few members of the Board sabotaged its own by insisting on excessive RA control and contractor liability in multiple, lengthy contract drafts. A special Board meeting with the Mediaworld volunteers in December couldn’t salvage the negotiations — another obstructionist draft resulted — and the volunteers withdrew last week, explaining the multitude of reasons why.
The increasingly urgent question is: What are some members of RA’s Board and senior staff trying to conceal about the Tetra acquisition and renovation — and why? Did they engage in illegal, unethical or just plain stupid behavior? Unless there is a criminal investigation, the chances are dwindling Restonians will ever know who, how, why and when all this financial mischief occurred as the Board and staff continue to hide the truth any way they can. The future of honest, open, prudent governance in Reston has never looked more uncertain.
The RA Board 2017 election a month away is an opportunity to reverse the Board’s recent gross misbehavior. There are four openings and, if filled with candidates who seek to reform the RA Board and the way it does business, the Board could actually represent the interests of the community rather than the guilty. Pay attention to what candidates file and what they say about the handling of Tetra, including the need for an audit, the development of an RA ethics policy with teeth and openness in RA decision making. It could be your last chance in years for meaningful change in how our community is governed.
Terry Maynard, Co-Chair
Reston 20/20 Committee
(Updated, 12:30 p.m. Friday) Correction: Maynard has reported the that area affected by the change in the size of the Transit Station areas, allowable square footage of development, and other related numbers late in his op-ed are actually about one-third of those reported. In particular, the expanded area and high densities would allow about 438 million square feet of total development, not 1.4 billion square feet as stated.
A few days ago, I wrote an op-ed published here on the County’s efforts to increase the allowed population density in Reston and double the permitted zoning density in Transit Station Areas (from FAR 2.5 to FAR 5.0, plus a 0.5 FAR bonus for affordable housing), including Reston’s three stations.
Aside from allowing major density increases here, these proposed changes affect other types of County “districts”, such Community Business Districts, Commercial Revitalization Districts, and Commercial Revitalization Areas elsewhere in the County. These include Baileys Crossroads, Seven Corners, McLean, Merrifield, Lake Anne (yes!), Annandale, Springfield, and most of the Richmond Highway area. And, of course, all the areas surrounding the County’s Metrorail stations. And we already have reliable commentary that developers intend to maximize density in at least one of these “districts” once the zoning law is changed.
All these areas would now be incorporated into the zoning code as either Planned Development Commercial Districts (PDCs) or Planned Residential Mixed-Use Districts (PRMs), the difference being the predominance of commercial or residential uses. The density caps may be approved if the County “is implementing the density/intensity and other recommendations of the comprehensive plan or any other design guidelines endorsed by the Board.” “Any other guidelines;” that’s a hole as large as a skyscraper.
The adding of these “districts” to the PDC or PRM categorizations and upping the allowable density is all part of the Board of Supervisors’ strategy to allow massive urbanization of Fairfax County over the next several decades. Not just the Reston you know, but the County you know would be completely different if market conditions permit.
In fact, early this year the Board approved a new County “Strategic Plan to Facilitate the Economic Success of Fairfax County” that calls for this urbanization of Fairfax County. The plan was developed by the County’s Economic Advisory Commission and its panel represented just about every County “sector” except residents, the people who pay more than half of the County’s taxes and elect its Board. As you might expect, however, the strategic plan cynically states that the County’s vision is “To protect and enrich the quality of life for the people, neighborhoods and diverse communities of Fairfax County….” But who needs them in preparing the plan? What value could they possibly add? (more…)