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Tens of millions of dollars hang in the balance in a zoning dispute between the city of Gaithersburg and the owner of the GE Tech Park that could make it costlier for the county executive to relocate several county agencies to the land on Darnestown Road.

While county officials do not expect to purchase the GE Tech Park outright, if developers win approval to build three new warehouses on the land as they want, the value of the property will go up and could affect negotiations. County Executive Isiah Leggett intends to relocate the county police headquarters, the 1st District police station and other operations to the 52-acre parcel.

AvalonBay Communities Inc., the contract purchaser of GE Tech Park, has appealed decisions by the city's Planning Commission and its Board of Appeals denying the warehouses, saying they should be allowed to add as much as 700,000 square feet of new space as prescribed in a 1989 annexation agreement. The property already has a five-story office building.

In February 2007, AvalonBay applied to build three one-story warehouses totaling 202,000 square feet. The Planning Commission denied the application in September, and the city's appeals board upheld that decision in April, saying that the land needed to be preserved as open space as prescribed in a 2006 master plan update and that the warehouses would be "incompatible and inharmonious with existing uses of the property and adjacent uses."

The GE Tech Park is worth $64.2 million, according to a state assessment done in July.

Based on similar projects in Gaithersburg, 200,000 square feet of warehouse space has the potential to add as much as $40 million to the property's value, said Assistant City Manager Tony Tomasello.

"It's not unreasonable. Most of the assessments seem to be coming in at $200-per-foot range … for flex/research/warehouse space," he said. "Flex space can be quite profitable. That's not out of the question, not at all."

The value of the GE Tech Park is at the heart of Leggett's Property Use Initiative, an expansive plan that would clear the way for two multi-decade "smart growth" redevelopment projects in the Shady Grove area by moving more than a dozen county operations into the upcounty.

A key to the plan is that it be "cost neutral," meaning that the value of the properties sold or "swapped" balances out against any costs to acquire land, rehabilitate existing buildings and build new facilities.

County officials have been mum on the financial figures, not wanting to compromise their negotiating power with developers.

The county has two plots of land to offer developers for exchange: 52 acres of land on Great Seneca Highway, site of the current Public Safety Training Academy, and 92 acres on Crabbs Branch Way near Rockville, site of the county's industrial park.

Regardless of the outcome of the AvalonBay's appeal in Montgomery County Circuit Court, Leggett's plan still works, said Assistant Chief Administrative Officer Diane Schwartz Jones, who is heading up the project.

What is largely at issue in the appeal is what holds more power: an annexation agreement or the recommendations of a master plan.

Pointing to the annexation agreement that put the parcel into the city of Gaithersburg, AvalonBay argues that because the agreement approved up to 700,000 square feet under the I-3 industrial zone they should be allowed to build it.

In Gaithersburg's 2006 master plan update, the City Council declared that the undeveloped land at GE Tech Park should all be preserved as open space.

A Circuit Court hearing is scheduled for November.

Two of the warehouses would be on the front lawn facing Darnestown Road. Under Leggett's plan, the county would build a public safety memorial there, possibly with some passive recreational uses.

Leggett's plan calls for the county to acquire about 100 acres off Darnestown Road between the Kentlands and Lakelands, including GE Tech Park and 21 acres owned by FinMarc. The FinMarc property, assessed in July at $20.4 million, would be the location for the Department of Liquor Control.