Item 2. Properties
Item 2. PROPERTIES.
The Company owns (predominately in fee simple but
also through ownership of interests in joint ventures) approximately 21,000 acres of land in Florida, Georgia, Maryland, Virginia, South
Carolina, and the District of Columbia. This land is generally held by the Company in four distinct segments: (i) Asset Management Segment
(land owned and operated as income producing rental properties in the form of commercial properties), (ii) Mining Royalty Lands Segment
(land owned and leased to mining companies for royalties or rents), (iii) Development Segment (land owned and held for investment to be
further developed for future income production or sales to third parties), and (iv) Stabilized Joint Venture Segment (ownership, leasing
and management of buildings through joint ventures).
Asset Management Segment. As of December 31,
2022, the Asset Management Segment includes eight buildings at four commercial properties owned by the Company in fee simple as follows:
1) 34 Loveton Circle in suburban Baltimore County,
Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company
for use as our Baltimore headquarters). The property is subject to commercial leases with various tenants.
2) 155 E. 21 st Street in Duval County,
Florida was an office building property that remains under lease through March 2026. We permitted the tenant to demolish all structures
on the property during 2018.
3) Cranberry Run Business Park in Hartford County,
Maryland consists of five office buildings totaling 267,737 square feet which are 100% leased and occupied. The property is subject to
commercial leases with various tenants.
4) Hollander 95 Business Park in Baltimore City, Maryland
consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021 and are 100.0% leased and 45.4%
occupied
Mining Royalty Lands Segment.
Introduction.
Pursuant to amendments to Regulation S-K of the Securities
Act of 1933 (“Regulation S-K”) adopted by the Securities and Exchange Commission in 2018, effective for fiscal years beginning
on or after January 1, 2021, registrants with material mining operations must disclose certain information in their Securities and Exchange
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Act filings concerning mineral resources and mineral
reserves, in accordance with to Subpart 1300 of Regulation S-K. This section of Item 2 provides summary information about our overall
portfolio of mining royalty properties.
Our mining leases do not require tenants to furnish
technical report summaries that meet the requirements of Rule 1302, and the Company does not otherwise have access to the technical data
required to determine precise amounts of each class of mineral resource or probable or proven resources. In accordance with Rule 1303(a)(3),
the Company is providing all required information in its possession or which it can obtain without incurring an unreasonable burden or
expense.
The Company periodically engages consultants to examine
reserve estimates and geological studies conducted by tenants and their industry professionals.
Locations. The following map presents
the locations of the Company’s mining properties, which are discussed by segment (as reported in the Company’s financial statements)
below:
Mining Properties . The Company owns
a fee simple interest in 14 open pit aggregates quarries located in Florida, Georgia and Virginia, which comprise approximately 16,650
total acres. The Company’s quarries are subject to mining leases with various tenants, including Vulcan Materials, Martin Marietta,
Cemex, Argos, and The Concrete Company. Aggregates consist of crushed stone, sand, gravel, fill dirt, limestone and calcium and are used
primarily in construction applications.
Nine of the Company’s quarries (located in Grandin,
FL, Fort Myers, FL, Keuka, FL, Newberry, FL, Astatula, FL, Columbus, GA, Macon, GA, Tyrone, GA, and Manassas, VA; totaling 13,876 acres)
are currently being mined, and five of the Company’s quarries (located in Marion County, FL, Lake Louisa, FL, Astatula, FL and Lake
Sand, FL and Forest Park, GA; totaling 2,778 acres) are leased but are not currently being mined. Our
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typical mining lease requires the tenant to pay the
Company a royalty based on the number of tons of mined materials sold from our mining property during a given fiscal year multiplied by
a percentage of the average annual sales price per ton sold. In certain locations, typically where the reserves on the property have been
depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount. In the fiscal years ended December
31, 2022, 2021 and 2020, aggregate tons sold with respect to the Company’s mining properties were approximately 9,525,000, 7,575,000
and 8,206,000, respectively.
In May 2014, the Company entered into an amendment
to our lease with Vulcan for our Fort Myers location requiring that the mining be accelerated and that the mining plan be conformed to
accommodate the future construction of up to 105 residential dwelling units around the mined lakes. In return, the Company granted Lee
County an option to purchase a right of way for a connector road that would benefit the residential area on our property and to place
a conservation easement on part of the property, which the County exercised in 2020. Mining activity commenced in 2017 following Lee County’s
issuance of a mine operating permit allowing Vulcan to begin production.
In November 2017, Lake County commissioners voted
to approve a permit to Cemex to mine the Company’s land in Lake Louisa, Florida. The county issued the permit in July 2019. Cemex
expects to begin mining after completing the work necessary to prepare this site to become an active sand mine.
Brooksville Joint Venture. Additionally,
through a joint venture with Vulcan Materials, the Company owns a 50% interest in 4,280 acres of mixed-use property in Brooksville, Florida,
a portion of which comprises a ground calcium mine that is mined by Vulcan Materials. The Company entered into the joint venture in 2006
for the purpose of jointly owning and developing the land as a mixed-use community. In April 2011, the Florida Department of Community
Affairs issued its final order approving the development of the project consisting of 5,800 residential dwelling units and over 600,000
square feet of commercial and 850,000 of light industrial uses. Zoning for the project was approved by the County in August 2012. Vulcan
Materials still mines on the property and the Company receives 100% of the royalty on all tons sold at the Brooksville property. In the
fiscal years ended December 31, 2022, 2021, and 2020, aggregate tons sold were approximately 244,000, 280,000 and 285,000, respectively.
Other Properties. The Company also owns
an additional 36 acres of investment property in Brooksville, Florida.
Development Segment – Warehouse/Office Land.
At December 31, 2022, this segment owned the following
future development parcels:
1) Six acres of horizontally developed land at Hollander Business Park in Baltimore City, Maryland with one
101,750 square feet industrial build-to-suit awaiting final certificate of occupancy.
2) 54 acres of land that will be capable of supporting over 690,000 square feet of industrial product located
at 1001 Old Philadelphia Road in Aberdeen, Maryland.
3) 17 acres of land in Harford County, Maryland that can accommodate 259,000 square feet of industrial development.
4) 170 acres of land in Cecil County, Maryland that can accommodate 900,000 square feet of industrial development.
Development Segment – Land Held for Investment
or Sale.
At December 31, 2022, this segment was invested in
the following development parcels:
1) Riverfront on the Anacostia: The Riverfront on the Anacostia property is a 5.8-acre parcel of real estate
in Washington, D.C. that fronts the Anacostia River and is adjacent to the Washington Nationals Baseball Park. A revised Planned Unit
Development (PUD) plan was approved in 2012 and permits the Company to develop, in four phases, a four-building, mixed-use project, containing
approximately 1,161,050 square feet. The approved development includes numerous publicly
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accessible open spaces and a waterfront
esplanade along the Anacostia River. The first phase (now known as Dock 79), which was completed through a joint venture with MRP Realty,
and which consisted of a single building with residential and retail uses, became our fourth business segment in July 2017, now known
as the Stabilized Joint Venture Segment. The second phase (now known as The Maren), also completed through a joint venture with MRP Realty
and consists of a single building with residential and retail uses, was added to the Stabilized Joint Venture Segment effective March
31, 2021. The final two phases, Phase 3 and Phase 4 remain under a first-stage PUD approval expiring April 5, 2023, permitting 500,000
square feet of development.
2) Hampstead Trade Center: The Hampstead Trade Center property in Hampstead, Carroll County, Maryland is
a 118-acre parcel located adjacent to the State Route 30 bypass. The parcel was previously zoned for industrial use, but our request for
rezoning for residential use was approved in December 2018. Management believes this to be a higher and better use of the property. We
are fully engaged in the formal process of seeking PUD entitlements for this tract, which is now known as “Hampstead Overlook”.
3) Bryant Street: On December 24, 2018 the Company and MRP Realty formed four partnerships to purchase and
develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street
Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as
established by Congress in the Tax Cuts and Jobs Act of 2017. This first phase is a mixed-use development which supports 487 residential
units and 91,661 square feet of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site. Construction
is complete and leasing efforts are under way.
4) The Verge: On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop a mixed-use
project located at 1800 Half Street, Washington, D.C. This property is located in the Buzzard Point area of Washington, DC, less than
half a mile downriver from Dock 79 and The Maren. It lies directly between our two acres on the Anacostia currently under lease by Vulcan
and Audi Field, the home stadium of the DC United. The project is located in an Opportunity Zone, which provides tax benefits in the new
communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The eleven-story structure has
344 apartments and 8,536 square feet of ground floor retail. Construction is complete and leasing is under way.
5) Square 664E: The Company’s Square 664E property is approximately two acres situated on the Anacostia
River at the base of South Capitol Street less than half a mile down river from our Riverfront on the Anacostia property. This property
is currently under lease to Vulcan Materials for use as a concrete batch plant through 2026. In March 2017, reconstruction of the bulkhead
was completed at a cost of $4.2 million in anticipation of future high-rise development.
6) .408 Jackson: In December 2019, the Company entered into a joint venture with a new partner, Woodfield
Development, for the acquisition and development of a mixed-use project known as “.408 Jackson” in Greenville, South Carolina.
Woodfield specializes in Class-A multi-family, mixed-use developments primarily in the Carolinas and DC. The project is located across
the street from Greenville’s minor league baseball stadium and holds 227 multi-family units and 4,539 square feet of retail space.
It is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by
Congress in the Tax Cuts and Jobs Act of 2017. The temporary certificate of occupancy was received in December 2022. Leasing began in
the fourth quarter of 2022 with residential units 21.6% leased and 4.9% occupied at quarter end. Retail at this location is 100%. The
Company owns 40% of the development.
7) Windlass Run: In March 2016, the Company entered into an agreement with St. Johns Properties Inc., a Baltimore
development company, to jointly develop the remaining lands of our Windlass Run Business Park, located in Middle River, Maryland, into
a multi-building business park consisting of approximately 329,000 square feet of single-story office space. The project will take place
in several phases, with construction of the first phase, which includes two office buildings and two retail
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buildings totaling 100,030-square-feet
(inclusive of 27,950 retail), commenced in the fourth quarter of 2017 and was completed in January 2019. At December 31, 2022 Phase I
was 50.7% leased and 48.0% occupied, the subsequent phases will follow as each phase is stabilized.
8) Estero: In August 2022, the Company invested $3.6 million for a minority interest in a joint venture with
Woodfield Development to purchase and develop 46 acres in Estero, FL into a mixed-use project with 554 multifamily units, 72,000 square
feet of commercial space, 41,000 square feet of office space and a boutique 170-key hotel. While the joint venture attempts to rezone
the property, the Company will receive a preferred return of 8% with an option to roll its investment into equity in the vertical development
or exit at that point.
Stabilized Joint Venture Segment.
At December 31, 2022, this segment was invested in
the following stabilized joint ventures:
1) Dock 79: Dock 79 (Phase I of the Riverfront on the Anacostia development) is a 305-unit residential apartment
building with approximately 14,430 square feet of first floor retail space. The property is situated on approximately 2.1 acres of land
located on Potomac Avenue in Washington, DC, across the street from the Nationals Park.
2) The Maren: The Maren (Phase II of the Riverfront on the Anacostia development) is a 264-unit residential
apartment building with 6,758 square feet of retail space.
3) Riverside: Riverside Joint Venture in Greenville South Carolina is a joint venture with Woodfield Development
which includes a 200-unit residential apartment building. The Company owns 40% of the venture.
Item 3. LEGAL PROCEEDINGS.
None.
Item 4. MINE SAFETY DISCLOSURES.
None.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.