The Lake House, in a photo from last winter, was purchased in July 2015 for $2.6 million, and has been an ongoing source of controversy. Photo by Ken Moore.
Reston — The company selected by a special committee of the Reston Association to review the purchase and renovation of the deficit-plagued Lake House property backed out of negotiations.
Sridhar Ganesan, CEO of Mediaworld Ventures, LLC and president of the Reston Citizens Association, withdrew his company’s proposal to perform the review citing financial risk.
“We found that it was restrictive, affected independence and was punitive … we were hopeful of getting a document that was a lot more simplified without the restrictive conditions,” says Ganesan.
As reported in the Connection in December, the RA Board of Directors was still negotiating terms with Ganesan’s company, even though it was chosen in September to do the review for a $1 fee. By Dec. 22, Mediaworld sent a detailed letter reiterating changes it requested.
“We found that it was restrictive, affected independence and was punitive … we were hopeful of getting a document that was a lot more simplified without the restrictive conditions,” says Ganesan.
As reported in the Connection in December, the RA Board of Directors was still negotiating terms with Ganesan’s company, even though it was chosen in September to do the review for a $1 fee. By Dec. 22, Mediaworld sent a detailed letter reiterating changes it requested.
The letter addressed Ganesan’s concern for the nature and tone of the draft contract because it gave the RA certain powers over his team, its work and the final report, which he says would jeopardize the independence of the review.
But instead of receiving a leaner and less litigious agreement, a “Liquidated Damages” clause was added stating that any breach or threatened or perceived breach of any of the key terms set forth in the agreement would result in a $2,000 per breach penalty, the letter said.
By Jan. 2, conversations broke down when RA had not responded.
“It has been about 10 days since we sent the last letter to you and have had no response,” Ganesan wrote in an email to RA on Jan. 2. “Please consider this email as termination of our contract discussions,” it concluded.
“It has been about 10 days since we sent the last letter to you and have had no response,” Ganesan wrote in an email to RA on Jan. 2. “Please consider this email as termination of our contract discussions,” it concluded.
After he sent the termination email on Jan. 2, the RA replied by saying the association was still open to negotiating.
“RA was and continues to be willing to work with Mediaworld in good faith toward a mutually acceptable agreement,” Ellen Graves, RA’s board president, said in a statement to the Connection.
“Mediaworld apparently could not find the time to meet to resolve the remaining issues, including many standard terms found in community association contracts designed for an association’s protection and which are generally accepted by most companies performing similar services for community associations,” Graves’ statement continued.
Still, after three months of going back and forth, Ganesan felt like they were not making any progress.
“Bottom line, they had some conditions that would have impacted the independent review that we would have done … which should not have been in the agreement in the first place,” Ganesan says.
The RA will meet later this month to determine the best course of action moving forward on this independent review.