Gaithersburg Approves $1.2B Lakeforest Mall Redevelopment Project.
WRS Inc. won final discretionary approval from Gaithersburg city lawmakers to redevelop the shuttered Lakeforest Mall with a massive, $1.2 billion mixed-use project.
Acquisition and Approval Process
The South Carolina-based developer acquired the 102-acre mall site at 701 Russell Ave. in pieces between 2019 and 2022 for a total of $75 million, always intending to redevelop it into a live-work-play community. The Gaithersburg city council unanimously approved a schematic development plan at its Sept. 26 meeting, clearing the way toward that end. The plan allows up to 3.6 million square feet of new uses to replace the existing 1 million-square-foot mall and its sea of surface parking lots.
Future Development Steps
WRS will present site plans for each development step going forward. Staff and the planning commission will review these plans. The site’s development will occur over the next decades.
Lakeforest Mall Redevelopment Project Details
The approved project includes up to 1,600 new residential units (both multifamily rentals and for-sale), 750,000 square feet of new life science-related commercial space (office, research and development, light manufacturing), and 470,000 square feet of new retail.
Timeline and Economic Impact
WRS will begin demolition in early 2025. The residential and retail portions could deliver within the next five or six years, according to WRS principal Kevin Rogers in an interview. He said a timeline for the project’s life science component remains less certain, given the slowed demand in that industry since the boom times of 2022.
Once fully developed and stabilized, the Lakeforest Mall redevelopment would generate an estimated $2.7 million in annual revenues for the city, according to a fiscal and economic impact analysis RCLCO Real Estate Consulting prepared.
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Significance of the Lakeforest Mall Redevelopment Approval
Thursday’s approval marks a decisive milestone because it ends horse-trading between the developer and the local governments, Rogers said. WRS will still need to get site plans approved for the development’s various phases, but these focus more on technical code compliance, not the mix and densities of uses.
Securing Development Rights
To lock in the project beyond doubt, WRS still seeks the city council’s separate approval on Oct. 14 of a Development Rights and Responsibilities Agreements (DRRA). This legislation would ensure WRS fully vests its development rights, preventing a future city council from changing its mind and undoing or requiring changes to the approved plan. Without the DRRA, under Maryland law, vesting doesn’t occur until the developer sinks the first footer of its first building, Rogers said.
Background and Local Perspective
Like many shopping malls, Lakeforest had its prime in the 80s and 90s but declined in recent years. WRS, a developer from South Carolina, first acquired the central portion of the mall and approached the city to discuss possibilities.
“We see this project as a huge win for the city, and it will lead to a revitalization not only of that site but throughout the northern and eastern parts of our city including Olde Towne. I’m proud to have participated in this process from the beginning and look forward to more great news as this moves ahead,” said Jud Ashman.
Lakeforest Mall Redevelopment Project Factsheet
Developer: WRS Inc. (South Carolina-based)
Location: 701 Russell Ave., Gaithersburg, Maryland
Total Project Cost: $1.2 billion
Site Details
Total Area: 102 acres
Current Use: 1 million-square-foot mall with surface parking
Acquisition Cost: $75 million (purchased in pieces between 2019-2022)
Approved Development Plan
Total New Development: Up to 3.6 million square feet
Residential Units: Up to 1,600 (mix of multifamily rentals and for-sale)
Commercial Space: 750,000 square feet (life science-related: office, R&D, light manufacturing)
Retail Space: 470,000 square feet
Lakeforest Mall Redevelopment Project Timeline
City Council Approval Date: September 26, 2023
Demolition Start: Early 2025
Estimated Completion (Residential & Retail): 5-6 years (circa 2030-2031)
Life Science Component: Timeline uncertain due to market conditions
Read also:ย Paradise Valley Mall undergoes Redevelopment In Phoenix, Arizona
Economic Impact
Estimated Annual City Revenue: $2.7 million (when fully developed and stabilized)
Approval Process
Schematic Development Plan: Approved unanimously by Gaithersburg City Council
Next Steps: Site plan approvals for each development phase
Pending: Development Rights and Responsibilities Agreement (DRRA) approval (scheduled for Oct. 14, 2023)
Lakeforest Mall Redevelopment Project Vision
Concept: Live-work-play community
Goal: Revitalization of northern and eastern parts of Gaithersburg, including Olde Towne
Read also:ย Tri-County Mall Redevelopment project update
