ST. CHARLES, MD-Interstate General Company LP is close to sealing a deal that would give Benderson Development Co. the opportunity to acquire and dispose of 151 acres of property, carrying a price tag ranging from $200,000 to $270,000 per acre at Interstate’s Town Center South. Benderson, the nation’s largest private owner of retail shopping centers, is said to be eyeing a specific purchase in the area of $20 million.

“We are delighted to have a company of Benderson’s stature as the future developer of Town Center South,” Interstate chairman and CEO James J. Wilson says. Interstate has been trying to get the development of the property underway for quite some time now, but a legal issue stemming back more than a decade has hindered efforts.

In 1995 Interstate was charged in an eight-count indictment with illegally draining and filling wetlands at Town Center South in 1990. In 1999 the company agreed to plea guilty to a single violation of the Clean Water Act, after which a proposed Consent Decree was issued prohibiting further legal discharges and requiring Interstate to pay fines, as well as carry out remediation plans at Town Center South. Interstate is appealing the decision.

“Master planning [at Town Center South] has been held in abeyance pending our legal effort to set aside the company’s wetlands conviction and a related consent decree based on a recent Supreme Court decision,” Wilson explains in a letter to company unit holders last month. “Our current focus is on a 30-acre parcel zoned for commercial and office use. We are negotiating a joint venture with an experienced shopping mall development company to accelerate sale or lease of this property,” he adds.

In the term sheet signed by both parties, Benderson has the freedom to purchase anywhere from 50 to 151 acres in four phases over a three-year period. If all goes as planned, Benderson will take on the design, engineering and site work responsibilities for the development project. The deal is subject to due diligence and a contract of sale within four months.

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