Dream On Will the Ghermezians’ American Dream become Silver Spring’s nightmare?

Downtown Silver Spring is a vivid picture of urban splatter. Dingy, one-story brick-and-glass buildings hopscotch boarded-up storefronts and aging signage. There is no there there, unless you’re looking to get your car lubed.

But the Ghermezian brothers, a group of developers/siblings from Canada, look at the ghost of Silver Spring and see opportunity. Where fields of broken glass sparkle, the brothers envision a full-size skating rink. Where others might see potholes full of standing water, the developers see a massive wave pool. A place that conjures economic sinkhole for most looks like money in the bank to the Ghermezians.

It’s understandable that the Ghermezians’ fanciful vision of economic renewal—a massive mall in the city’s heart that combines retail and glitz—has turned the heads of Silver Springers. Who wouldn’t want to see a retail no-man’s land replaced with millions of square feet of throbbing shoppertainment? But not everyone, it turns out, is ready to share the American Dream. Nearby residents who have watched the process, understand its scale, and are privvy to the Ghermezians’ business history, worry that the proposed mall is a nightmare waiting to happen.

It’s a complicated project, with no precedent in the region. The Ghermezians expect to energize languid local retail by making people forget that they are even shopping. Less than half of the American Dream, 650,000 square feet, is reserved for actual retail, and the 1.5 million remaining square feet will house the “entertainment center,” complete with an NHL-size indoor hockey arena, a wave pool capable of accommodating 3,000 swimmers simultaneously, a miniature golf course, an IMAX theater, a regular movie complex, a restored Silver Theatre for lively arts, and a 425-room theme hotel.

It certainly sounds like a dream. It seems fantastic to suggest that at a time of shrinking retail demand and demographics, a dead-end commercial zone could support 2.1 million square feet of commercial Valhalla. And there’s more than a hint of pipe dream to the notion that Silver Spring’s tenuous transportation infrastructure could support crowds that would make Disneyworld take notice. The American Dream is a well-packaged boondoggle that, if the Ghermezians’ past is any indication, will never be built without a massive infusion of public monies...and maybe not even then.

In the 1970s, downtown Silver Spring sparkled with economic activity, including Hecht’s, JCPenneys, and Green’s five-and-dime. But the I-270 spur popped up, and traffic—the lifeblood of retail—disappeared. Shoppers left Silver Spring in the dust as they quickly and painlessly accessed White Flint and Montgomery Malls. And then Wheaton Plaza snuggled in just north of the Beltway, completing the coup d’etat of downtown Silver Spring. The former retail node has been in a spiral of deterioration and decay ever since.

In March 1995, an advisory board of nine government officials and six citizens met to try to fill in the black hole. They solicited proposals for 14 acres of downtown land known as the “urban renewal area.” Over the following 60 days, the advisory board received 10 proposals, granting interviews to six different developers. By August, the advisory board settled on an ambitious entertainment-oriented slice of Americana: the American Dream Mall.

The $585-million Dream was proposed by megamallers Triple Five Inc., a Canadian development company helmed by the four Ghermezian brothers. The advisory board was smitten by Triple Five’s willingness to think big, along with its demonstrated expertise in massive project building and management. After all, Triple Five had built the West Edmonton Mall in Edmonton, Canada, and the Mall of America, in Bloomington, Minn., the largest and second-largest malls on the planet respectively, weighing in at 5.2 million and 4.2 million square feet. The advisory board quickly opted for a potentially giant shot of retail lightning for Silver Spring.

On Sept. 5, 1995, in the upstairs auditorium of the Silver Spring armory, Triple Five hosted a roll-out that was designed to wow the residents of Silver Spring, but it quickly became a fiasco. Locals who showed up for a preview were horrified by the massive scale of the project and the clumsy presentations of the men who would build it. Two of the Ghermezian brothers, Nader and Eskandar, attempted to present themselves as ambitious businessmen who would get the job done in downtown Silver Spring, but they came across as insensitive, greedy nincompoops who were more concerned with chanting a mantra about bigness than developing something that fits the site.

By the end of the evening, the crowd reacted by forming the ad hoc Silver Spring Redevelopment Advisory Board—47 self-appointed members who charged themselves with investigating the pros and cons of the plan. Many residents got involved because they worried about the feasibility of a humongous mall in an urban setting. They had legitimate worries about the kind of civic life that would follow the construction of a gargantuan, enclosed town center. As it turned out, they were just in need of some spinning.

Triple Five sensed opportunity in the setback and hosted 19 members of the redevelopment advisory board on a tour of their two massive retail projects in Edmonton and Minneapolis. Montgomery County, anxious to get citizens behind the deal, footed the $18,000 bill for the sojourn. The Ghermezians spent five days on the trip schmoozing members of the board and attempting to allay fears about the havoc their vision might wreak on Silver Spring. The Ghermezians managed to convert many of their weekend guests into die-hard Triple Five advocates.

But Triple Five realized that it needed to lobby beyond the board members to ensure their future as megadevelopers.

To that end, Triple Five masterfully assembled a public relations team of respected civic leaders with abundant local clout, thereby renting instant trust and credibility. The first person Triple Five retained was Gus Bauman, partner at the D.C. law firm of Beveridge & Diamond and former chairman of the Montgomery County Planning Board. Friendly and approachable, Bauman helped bridge the gap between the off-putting Ghermezians and the wary community. Triple Five also booked Stephen Kaufman, a well-known Montgomery County lawyer, to avoid crippling legal entanglements. Kaufman, a top land-use lawyer at the firm Linowes and Blocher, had the connections and legal muscle to ensure that the Ghermezians could obtain the countless variances and permissions required to build their huge mall. Rounding out the Dream team, Triple Five brought Charles Maier on board, former director of Montgomery County public affairs during the ’70s and early ’80s. He has personally worked extensively with current county executive Douglas Duncan, and has built his career on packaging information for public consumption. All three men carry immense de facto sway in civic arenas as well as political ones, and they have opened many doors for Triple Five. They have turned Triple Five’s D.C. rocky road to county endorsement into a sprint on the autobahn.

Even supporters of a Hugedale in Silver Spring wonder how the Ghermezians plan on getting all those people in and out of what is essentially a small-scale urban environment. The Mall of America is instructive: Minnesota agreed to build multimillion dollar highways to ensure adequate ingress and egress. According to Bloomington Police Chief Bob Lutz, the highways have carried 100 million visitors to the mall in three years, virtually snarl-free. But Silver Spring’s urban locale—and Duncan’s sworn assertion that no more public dollars will be spent on the project—suggest that the existing mix of residential and commercial roads will have to carry the load.

Triple Five hired two local research firms, Barton-Aschman Associates and Parsons Brinckerhoff Quade & Douglas, to study the impact of mall-generated traffic. Data from the Mall of America and the West Edmonton Mall indicate that each car visiting those malls carries an average of 1.5 people. Both firms, however, used a figure of 2.63 people per car for the new project and cheerily suggested that 13 percent of all visitors would use the subway to shop in the new Silver Spring. The fudged assumptions suggest that the project would generate no more than 39,700 one-way trips a day, but if you do the math with numbers generated by the Ghermezians’ other projects, the picture is a lot grimmer. The American Dream hopes to attract 55,000-60,000 visitors daily. Even granting the optimistic 13 percent figure for subway use, American Dream traffic will saturate already busy Silver Spring roads with 69,600 additional trips.

If the mall ever gets built, look for massive, expensive improvements on Georgia Avenue and Colesville Road. And the tax dollars spent to make a driveway for the Ghermezians’ project will undoubtedly be labeled “an investment in the future.” Government money used to subsidize the mall will be disguised as everything else, but make no mistake, taxpayers’ pockets will be tapped.

Even though the Silver Spring deal seems to have a great deal of momentum, look for negotiations between the county and the Ghermezians to grind to a halt as soon as the developers come clean with the amount of subsidy they really expect. The Ghermezians have a history of much-heralded projects that have gone to hell as soon as they are inspected in the light of day.

Triple Five’s track record suggests the Ghermezians’ real expertise is self-promotion, not mega-endeavors. While they were wooing Silver Spring, the Ghermezians talked a great deal about the West Edmonton Mall and the Mall of America. Those projects, nicely spun, allowed the brothers to ride into the dilapidated town of Silver Spring on white horses.

Trouble is, the Ghermezians no longer own the West Edmonton Mall. The mall was built for between $700 million and $1.2 billion; the property is currently valued at between $250 million and $400 million, according to Alberta Report. In September 1994, Canadian Business reported that the mall has never turned a profit. And before the Mall of America was even complete, the Ghermezians downsized their ownership share from more than 50 percent to just 22.5 percent. And that’s just their successes. A hard look at all the smoke and mirrors kicked up by the relentlessly promotional Ghermezians suggests that if a shovel ever turns earth in downtown Silver Spring, it won’t be a Ghermezian holding it.

The September 1994 issue of Canadian Business listed a number of “monster projects” Triple Five attempted and failed to build: Niagara Falls, N.Y.; Mississauga, Ontario; Burbank, Calif.; Obenhauser, Germany; Leeds, U.K.; Moscow, Russia; Beijing, China; and Burnaby, British Columbia. In addition, the Ghermezians talked extensively of saturating the Japanese landscape with 10 megamalls, not one of which ever captured serious attention there.

Niagara Falls offers an instructive example. Public officials thought they had a done deal, but the rosy feelings quickly evaporated. In 1992, New York Gov. Mario Cuomo offered Triple Five $400 million in building incentives for a project similar in size and scope to the American Dream, but the deal fell through after the Ghermezians were unable to scare up private investors for the project.

Montgomery County has already paid $60 million for the plot of land awaiting development, but Duncan says that no more public money will be spent. He is about to find out that the Ghermezians have a bottomless appetite for public dollars. They pulled out of the Burnaby deal in Canada when the city failed to grant them sufficient tax concessions, and the Leeds deal went the way of Niagara Falls with the brothers unable to raise the necessary finances using private sources. As currently configured, the American Dream offers the Ghermezians nothing they have not already turned their backs on.

On the morning of Feb. 27, 1996, Duncan predictably announced that Montgomery County had decided to support the American Dream project. The county and Triple Five had hoped to negotiate a deal by the end of March, but the deadline has already been moved back a month. When and if a deal is struck, the Ghermezians will have six months to secure private financing for the deal. Duncan has stated that if they fail to secure the money in that time, the county will move on to another project. Hopefully, Duncan still has the phone numbers of the other developers who submitted more modest proposals last year. He’ll probably need them soon. CP

Our Readers Say

The one (yes) positive aspect of the Ghermezian's "American Dream" project was that it would have preserved the historically designated 1927 Maryland National Guard/Silver Spring Armory that would have been relocated across Wayne Avenue and rebuilt roughly where the Crescent condominium sits. Today, all that remains of the Armory are two skateboard-scuffed architectural artifacts and a disembodied concrete Maryland Flag that sits next to the Wayne Avenue parking garage.

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