THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, August 19, 1995 TAG: 9508190061
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 39 lines
Trustees of the Virginia Retirement System and its controversial real estate arm, RF&P Corp., have directed a New York investment firm to begin shopping for potential buyers of RF&P.
Previously, the pension system only was considering a handful of unsolicited offers for RF&P, a railroad-turned-development company that has been converted to a real estate investment trust.
Lehman Bros. Inc. of New York will contact ``a selective few that they feel would have an interest in the RF&P,'' said Erwin H. Will Jr., investment director for the Virginia Retirement System, the pension fund for state employees.
RF&P was purchased by the retirement system for about $540 million. The system completed its acquisition of RF&P in 1992 over the objections of senior state legislators and several VRS trustees. The takeover is the target of a continuing criminal investigation by the U.S. Justice Department.
Lehman Bros. was hired in June and conducted a two-month study of RF&P.
The firm's findings included ``potential negatives,'' such as the tax liability and environmental cleanup and development costs driven by the sale of raw land, Will said.
RF&P's holdings include Potomac Yard in Alexandria, one of the largest undeveloped tracts inside the Capital Beltway and once envisioned as the site of a Washington Redskins stadium.
VRS, with a controlling stake in RF&P, would have to approve the sale of the entire company, while only RF&P sanction is needed to dispose of land or buildings. by CNB