Playing in the Big Leagues with the Lerners

One of the major players behind the scenes of the Rail-to-Dulles controversy is the Lerner family, a leading landowner and developer in Tysons Corner. (See “Follow the Money.”) Alex MacGillis and Dana Hedgpeth with the Washington Post profile the reclusive family in considerable detail. The lead-in focuses on the Lerners’ role in development of the Washington baseball stadium and environs, but the story later delves into the negotiations between Lerner and Fairfax County.

My take-away from the article is that the Lerners understand risk in the real estate business better than their counterparts in local government do. Any good negotiator in a transaction shovels off as much of his risk to other parties as he possibly can. If the other party is naive, or politically motivated to close a deal, he will overlook the risks he is taking on. When disagreements arise, the Lerners say, “Let’s look at the fine print.” Things usually turn out in their favor, and local government officials are dismayed. A case in point:

Lilla Richards of McLean, a county supervisor in the 1990s, is still upset about what she sees as the Lerners’ success in invoking the fine print of zoning agreements to delay building a much-needed bridge over Route 123 in Tysons.

“What [Lerner] does is get the [lawyers] to write the document in a way that most gentlemen would understand in one way,” she said. “But after the document is signed and everyone is happy and goes away, then they find out, ‘Oh my God, there is a loophole in here we didn’t see.’ “

The Lerners say they are simply abiding by the letter of agreements. “I guess we’re just going to have to get used to the fine-print rap,” [Robert K.] Tanenbaum said. “A lot of times, you’ll find that when people have different expectations, the argument of refuge is, ‘They’re insisting on details.’ We’re just going to have to be okay with that.”

That’s business, folks. When you’re playing in the big leagues, that’s the way it’s done. The Rail-to-Dulles project is big-league business. So is the redevelopment of Tysons Corner. If Fairfax County doesn’t want to get taken to the cleaners, it needs to hire attorneys and finance people who understand real estate development — and all of its risks — as well as the Bechtels, the Lerners and the West*Groups.

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One response to “Playing in the Big Leagues with the Lerners”

  1. Toomanytaxes Avatar

    The “blame” for any problems with the Lerner Corp. in Fairfax County must lie with the county supervisors. Unless Lerner has done something illegal or misrepresented or hid somethign that was supposed to be disclosed, it is only taking advantage of poor government.

    If Lilla Richards thought that there might be problems with an agreement, why did she vote for it? What questions did she ask of the Fairfax County Attorney’s office? Fairfax County officials simply fail to use all of the limited powers over land use that they have under Virginia law. Then approve proposals that should be accepted and fail to impose reasonable conditions on them. Then, they run around blaming the General Assembly and the Dillon Rule.

    During the recent rezoning granted to Lerner, there was a dispute over how many parking spaces should be approved. The staff and citizens groups wanted fewer and Lerner wanted more. As I recall, the Planning Commission and the Supervisors voted for more.

    Similarly, the County agreed to condos based on the number of square feet and not also based on an absolute number of homes. The County was NOT obligated to do this, but then cries foul when Lerner reduced the number of condos to be built, but increased the size of the condos.

    Etc., etc.

    As I recall when Ms. Richards was our supervisor, she spent more effort trying to increase the budget and taxes than in looking out for citizens. Nothing much has changed.

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