The Velsor Companies

In The Press

Washington Business Journal, April 7, 2000

Exclusive Reports
From the April 7, 2000 print edition

Dulles parking forces sale of Fairchild HQ
Airports authority uses power of eminent domain

Thomas C. Hall,   Staff Reporter

Fairchild Corp. is perhaps the only reluctant seller in Greater Washington's sizzling real estate market: The aerospace firm is being forced to sell its headquarters at Dulles International Airport.

But even a seller's market is a buyer's market when the buyer has power of eminent domain.

The Washington Metropolitan Airports Authority is seizing control of Fairchild's property to make way for a parking garage at Dulles, the world's fastest-growing airport.

"I wouldn't call it a hostile takeover, but this is an eminent-domain acquisition," said Ed Faggen, the authority's vice president and general counsel. "This is an extraordinary action, but the authority has to do what it needs to do to operate."

As an interstate compact, the authority can acquire property via eminent domain, a process that establishes fair-market value to compensate displaced property owners.

The authority's board of directors voted April 5 to acquire the 117,000-square-foot building Fairchild owns at 45025 Aviation Way, as well as the large parking lot to the south.

Terms of the sale are being kept confidential, as part of a legal settlement with Fairchild. In a role reversal, the company now will lease space from the authority, which has been leasing a portion of the four-story building for administrative offices.

"There is active litigation involved," Faggen said. "We did not reach an agreement with Fairchild for the sale of this property, and this is a way of resolving that disagreement."

Calls to Fairchild executives and the attorney representing the company in the acquisition settlement were not returned.

Lower-level employees said they've been instructed not to talk about the sale.

Airports Authority spokeswoman Tara Hamilton said construction could begin later this year for the 4,500-space parking garage directly north of the current 2,300-space surface lot that is closest to the terminal. The new garage will be connected to the terminal via a moving sidewalk in a pedestrian tunnel.

A smaller 3,800-space garage also will be built directly west of the oval surface lot, effectively quadrupling the current parking capacity at Dulles.

"There isn't a lot of parking here that's within walking distance," Faggen said. "We may be the fastest-growing airport in the world, but close-in parking is one of our shortcomings."

Some 19.6 million passengers flew through Dulles last year, a 25.8 percent increase over the previous year.

Fairchild's headquarters is flanked by two similar office buildings that are privately owned, but Faggen said the authority was able to make amicable arrangements to acquire the area needed behind them to build the north parking garage. The Fairchild property extends twice as far to the south as the neighboring parcels owned by Airline Tariff Publishing and Velsor Properties of McLean.

The three office buildings opposite the Dulles Airport Marriott were built in 1983, before the airports authority was created in 1987 to manage Dulles and Reagan National airports.

The authority also has exercised its powers of eminent domain to acquire land for a third north-south runway to be built west of the existing runways.

Fairchild announced last fall that it plans to sell off some of its subsidiaries and $1.2 billion in assets in order to concentrate on its core business.

The company (NYSE: FA) reported revenue of $742 million last year, posting a net profit of $101 million or $5.14 per share. It has 3,900 employees worldwide.


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