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November 21, 2013

Concerns Diminish Over Devon Development Dispute

Following initial concerns regarding a conflict of interest in the development of the commercial property adjacent to the grounds of the Devon Horse Show in Devon, Pa., lawyers representing both sides seemed pleased with the outcome of a Nov. 11 meeting. 

At issue was Devon Horse Show President Wade McDevitt’s involvement with the proposed project. McDevitt is a principal in the development firm Waterloo Devon, which purchased the 6.8 acres of commercial space adjacent to the Devon grounds. The location was previously home to Waterloo Gardens, a high-end nursery that declared bankruptcy in 2012 following the death of the owner the previous year.

Waterloo Devon and McDevitt are in negotiations to lease the parcel to Urban Outfitters, a company founded by McDevitt’s brother-in-law Scott Belair who, according to McDevitt’s lawyer Cuyler Walker, “is no longer an officer or involved in any of these negotiations.” McDevitt’s parent company, McDevitt Company, is the primary real estate broker for Urban Outfitters.

Walker continued, “Urban Outfitters has been looking for a site where they could cluster a couple of their retail businesses, including Anthropologie and Terrain, and then bring in additional, complimentary retail outlets to fill out the shopping area.”

Along with leasing the parcel purchased by Waterloo Devon, Urban Outfitters hopes to expand their project and is interested in leasing two tracts of space belonging to the Devon Horse Show.

Confusion arose when members of the board, specifically Johanna Glass, questioned whether McDevitt’s involvement presented a conflict of interest via a letter from her attorney Stuart Lurie dated Nov. 8.

Lurie and the board were satisfied with McDevitt’s immediate response in addressing their concerns. “I think [the meeting on Nov. 11 was] a good first step. We are pleased with the reaction of the organization to address the issues that we raised. My client was pleased with how quickly it happened. Obviously, we are waiting to see how things materialize but in terms of response, we are pleased and think it was positive. It is a fair statement to say that it is a step in the right direction,” said Lurie.

The meeting on the 11th provided McDevitt the opportunity to clarify his role and to clear up any misinformation or misunderstanding.

Walker said: “Urban Outfitters mentioned [their desire to lease property from the Devon Horse Show] to Wade and Wade then went to the Executive Committee at the Devon Horse Show and explained that this issue had come up.  He fully explained his role in developing the Waterloo Garden site, told the Executive Committee he planed to fully recuse himself and has fully recused himself from any involvement in any transactions and negotiations between Urban Outfitters as a developer and the Devon Horse Show.”

He continued, “The Executive Committee told him they would be interested in pursing it with Waterloo Devon and that was really the end of his role. He made the introduction and then got out of the process and intends to stay out of the process.”

Urban Outfitters would be working with essentially two different landlords or lessors; the first being Waterloo Devon and the second, potentially, the Devon Horse Show. The board has established a committee to evaluate the proposal and if they negotiate something they believe to be in the best interest of the Devon Horse Show they will bring it back to the full board for approval. Development of the major site is not dependent on the involvement of the Devon Horse Show.

“One of the things we proposed [in the letter] was having a committee formed to evaluate the transaction,” Lurie said.  “I’ve been told that this has been planned and if that is the case that is a great development which addresses our concerns. I think we are on the right path. Obviously we raised a bunch of issues and things don’t happen overnight and we recognize that but I expect things to be smoother going forward.”

If the Devon Horse Show is able to work out a deal with Urban Outfitters it could be a “win/win,” according to Walker. “There are a lot of details to work out, but the potential is that the developer would substantially upgrade the parking lot and pay for the use of the parking lot during the 50 or so weeks a the year that the horse show is not using it; right now it just sits idle. It would generate revenue for the horse show and actually be a nicer facility for the patrons of the horse show when they come to park.”

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