Updated: Lake Anne Property Owners Ask County To Withhold Proxy During Upcoming Election

Oct. 21, (2:25 p.m.): This story was updated with new language regarding the control of the proxy mentioned in the lease-agreement between the Simon Trust (Cheryl Terio-Simon) and Fairfax County. Patch made the changes after consulting an attorney and conducting additional reporting.

RESTON, VA — A group of Reston residents reached out to Hunter Mill District Supervisor Walter Alcorn recently seeking the county's help in a matter affecting an upcoming homeowners association election.

In a Sept. 23 letter to Alcorn, property owners, who are members of the Lake Anne of Reston, A Condominium Association (LARCA), asked the county to claim its proxy from Cheryl Terio-Simon. In addition to being the widow of Reston founder Robert E. Simon, Terio-Simon is the landlord of the commercial property occupied by the Reston Community Center (RCC) in Lake Anne Plaza.

The county has a lease-to-buy agreement with Terio-Simon for the property, which is the largest commercial space in the plaza. If all terms of the agreement are met, the county would be able to claim the title for the property on April 30, 2039 by paying her $1.

All property owners in the condominium association are able to cast a vote in the annual election of board members. However, not every property owner's vote is equal.

Voting is divided proportionally, which means the vote of a member who owns a large commercial property on Lake Anne Plaza counts proportionally more than the vote of a member who only owns a residential unit. The space occupied by the RCC is the largest commercial property, so its vote counts as 7 percent compared to 1 percent or below for a residential property owner.

The letter to Alcorn, which included a petition signed by 43 of LARCA's property owners, was also sent to all members of the Fairfax County Board of Supervisors and the RCC Board of Governors, as well as Fairfax County Chief Equity Officer Karla Bruce.

The letter claims that Terio-Simon, as the landlord of the RCC property, used the 7 percent vote to tip the outcome of the 2020 election.

"Most owners of the property voted for different candidates than those claiming victory; but they could not overcome the large percentage (7%) assigns to the unit occupied by RCC," the letter says. "The County allowing the vote to be used in a condo election creates an unequal balance of power and potential conflict of interest. Using taxpayer money to do so is not in the best interest of our community and especially unfair to our minority commercial owners, burdened with assessments; and who will be disproportionately affected by further special assessments to address our infrastructure issues."

The letter and petition ask the tenant (Fairfax County/RCC) to claim its proxy vote from the landlord (Terio-Simon), so that it will not be used in LARCA's upcoming election.

All of this hinges on the interpretation of the lease agreement between Fairfax County and Terio-Simon and how the agreement applies to the property's relationship to LARCA and its board elections.

The LARCA member letter to Alcorn states: "The lease between the County and the property owner clearly states that the County may hold the 'proxy' for voting (Section 7g)." By asking the county to "hold" the proxy, they're seeking to prevent Terio-Simon from using the 7 percent vote on Oct. 27.

To support its case, the LARCA member letter references a 2018 letter from RCC Board of Governors Chair Beverly Cosham to then LARCA President Sarah Selvaraj. In that letter, Cosham writes that she is returning the proxy to the landlord (Terio-Simon) "solely for the property owner to vote in the 'merchant committee.'"

The proxy is mentioned only once in the lease agreement:

"Landlord shall, at the option of Tenant, formally designate the Tenant to be its designee or proxy with regard to any and all LARCA matters or elections related to the Premises, except voting on LARCA fees and assessments payable by Landlord."

After consulting with an attorney, Patch has concluded that the Section 7g of the lease gives control of the proxy to the tenant (Fairfax County/RCC), who can return all or part of it to the landlord. The 2018 letter supports that interpretation of the lease.

This also means that the request the LARCA members made to the county to intervene is valid in as much as the lease agreement gives the tenant control of the proxy.

Patch reached out to RCC Executive Director Leila Gordon about the LARCA members' letter and petition. She provided the following statement:

"RCC has had an excellent relationship with our Landlord since 1999 when RCC Lake Anne opened. The lease stipulates the proxy provision in the context of Section 7, 'Leasehold Improvements,' and specifically notes that the Landlord’s proxy isn’t available when the matter is related to 'voting on LARCA fees and assessments payable by Landlord.' RCC views the election of LARCA Board officers to be wholly unrelated to any issue of Tenant Improvements and entirely germane to issues of fees and assessments, and would therefore be the sole concern of the Landlord. We remain satisfied with the present arrangement."

During a follow up phone interview on Thursday, Gordon confirmed the contents of the 2018 letter from Cosham. The RCC had used the proxy to vote on one specific matter regarding events but later returned it to the landlord. That was the only time she was aware of in which the proxy was used by RCC.

When asked if Terio-Simon was in possession of the proxy for the 2020 HOA vote, Gordon said she was, but it was not because the RCC or the county had given it to her. As mentioned in her statement, Gordon said the RCC considers the election of LARCA Board officers unrelated to tenant improvements and more of a concern for the landlord.

Gordon also said that to her knowledge, with the exception of the matter mentioned in the 2018 letter, the tenant has not used the proxy and therefore considers it to be in possession of the landlord. If that is the case, Terio-Simon had the proxy in 2020 and can presumably use it again on Oct. 27.

As to whether the county will intervene, Alcorn issued the following response:

“I forwarded the letter expressing concern about minority condominium owners to the RCC board for their consideration. I have full confidence in that board — including the three members that were just re-elected by the community last month — to do the right thing.”

Over the last couple of years, the Lake Anne community has experienced a number of crises. The most notable of these occurred when the Quayside condominiums went without hot water for several months last winter.

In 2020, newly elected LARCA President Senzel Schaefer initiated a forensic review of spending by the previous board, according to RestonNow. This came after Fairfax County Police initiated a criminal investigation of the community association.

Recently, Schaefer resigned from the board. The position of president is being filled temporarily until the new board is elected on Oct. 27.

On Sept 13, Alcorn hosted a community meeting at the Lake Anne RCC to unveil the results of a survey conducted by the Fairfax County Department of Public Works and Environmental Services of Lake Anne Plaza's deteriorating infrastructure. The survey found that LARCA had at least $37 million worth of repairs to make.

Toward the end of the Sept. 13 meeting, Alcorn had a message for those in attendance.

"One of the challenges that, frankly, you have as a community, as LARCA, is coherence," he said. "The divisions in the community are well known. It's important, given the allegation of criminal activities. The honest to God truth is, nobody will touch this community. I just wanted to say that. That's something else that you're going to have to do directly. So, I would encourage you to be thinking beyond those divisions to what's next."