Tag Archives: Economic development

Adam Pagnucco, Corporate Welfare, Development, Economy, Metro

Smart Growth or Corporate Welfare? Part Three

By Adam Pagnucco.

Part Two examined the case made by supporters of Bill 29-20, which offers 15-year property tax breaks on Metro development projects, and found that they have a point: namely, that the economics of high rises at Metro stations likely deter many such projects from being built. But there are other issues with the bill that should be addressed. Some of them are:

Smart growth was supposed to make money for the county.

There are plenty of good reasons to channel economic development through smart growth principles, including transportation management, community building, agricultural preservation, environmental considerations and more. But one of the cited reasons has historically been its alleged impact on county finances. Concentrating development in existing downtowns means that new road and sewer infrastructure does not need to be built. Nor do new police or fire stations. Schools may need to be expanded but new ones are not necessarily required as they may be by remote greenfield development. And high property values in downtowns can generate lots of property tax revenues that can be allocated across the county’s many needs. That was the plan at any rate. White Flint, one of the county’s earlier smart growth plans, was projected to generate $6-7 billion in revenue over the next 20-30 years back in 2010.

That was then. Now we are being told that if we want development at Metro stations, taxpayers need to pay for it.

There is no evidence that corporate payouts have paid off for MoCo overall.

Bill 29-20 is far from the first corporate incentive proposal in county history. MoCo has handed out $67 million in incentives through its Economic Development Fund (EDF) over the last couple decades with millions more on the way. Most of this money has been expended for retention, not attraction. Four recipients alone – Fishers Lane (HHS), Meso Scale Diagnostics, Marriott and HMS Host – were allocated a combined $44 million in multi-year retention grants, of which $28 million remains to be paid. MoCo’s Democratic elected officials even gave a $500,000 subsidy to a subsidiary of Rupert Murdoch’s Fox Corporation. Despite all of these expenditures, the charts below shows how MoCo compares to its neighbors in employment growth and establishment growth since 2006, the county’s peak in the prior business cycle.

Here is the bottom line: we have been paying escalating amounts of corporate incentives for more than twenty years and it has not moved the needle on our economic competitiveness. Any time you do the same thing over and over and don’t get a positive result, you need to reconsider what you’re doing. Council members, think about it.

The county’s own actions make it a tough place for landlords.

Back in April, I wrote an article titled, “Why Would Anyone Want to Build Rental Units in MoCo?” summarizing the many deterrents to residential rental construction here. Among them were the time-consuming and expensive eviction process, the county’s moratorium policy (which does nothing to stop school crowding) and the election of a frequent development opponent as county executive. But little compares to the recent imposition of rent stabilization, which is supposed to be temporary but could always be extended. Many landlords were outraged at allegations of mass rent gouging when in fact there was little evidence to back that up. So are we now offering tax breaks in part to make up for all of this? Wouldn’t it be cheaper for taxpayers if the county simply stopped doing some or all of the above so that tax breaks aren’t necessary to get landlords to build units?

Property taxes by themselves are not the reason why MoCo can’t compete.

In waiving property taxes on Metro projects for 15 years, Bill 29-20 assumes that MoCo’s property taxes are a deterrent to development. But according to D.C.’s chief financial officer, MoCo’s effective property tax rate in 2018 was lower than in Prince George’s, Fairfax and Alexandria and not much higher than Arlington. And according to the General Assembly’s Department of Legislative Services, MoCo’s real property tax rate ranked 14th of 24 local jurisdictions in Maryland in FY20. On top of that, MoCo’s transportation impact taxes are far lower near Metro stations than they are in other parts of the county.

MoCo’s tax competitiveness challenge lies in its income tax (which is not charged by local governments in Virginia) and its energy tax. Bill 29-20 does not address either of those issues.

What are the consequences for income inequality?

High rises on top of Metro stations will be able to command some of the highest rents and/or condo prices in MoCo (and perhaps the entire region). In fact, such projects need to charge high rents and prices to pay off the costs of high rise construction and WMATA requirements. Bill 29-20 does not impose any additional affordable housing obligations beyond the 12.5-15% moderately-priced dwelling unit requirements in existing law. (Council Member Will Jawando introduced an amendment to raise the affordable housing requirement to 25% in committee but it was voted down.) So the bill in effect requires MoCo taxpayers to subsidize high-cost housing. Given the county’s long-standing problems with housing unaffordability and income inequality, that’s a hard pill to swallow.

And so Bill 29-20 presents a tough policy predicament. It’s true that high rise projects at Metro, the local Holy Grail for smart growth in the D.C. region, are not happening because of difficult project economics. It’s also true that sprawl and no growth are bad alternatives to transit-oriented development. But it’s frustrating that some of the architects and advocates of the county’s 15-year smart growth approach are now telling us it can’t happen without big tax breaks.

That said, corporate welfare can in rare cases be a necessary evil. If the county council wants to consider tax breaks for projects on a case by case basis, so be it. In doing so, the council can sort out projects that have a compelling public purpose from those that don’t. The council can also exercise leverage over a developer when public amenities like open space, child care, schools and other priorities are under consideration.

Bill 29-20 does not enable any of that. It creates an entitlement. Developers at Metro station properties will get tax breaks by right according to law. The council gives up most if not all of its leverage to influence such projects. And of course future developers might want to amend the law to get even longer tax breaks or other benefits. Developers of sites near but not on Metro stations might demand concessions too. As with the county’s Economic Development Fund, which began by handing out small grants to companies twenty years ago and eventually distributed 7-digit and 8-digit grants, the subsidies in the current bill may only be the beginning.

Metro station development was supposed to make us money. Now it seems we will have to pay for it, at least up front, to get the benefits that come later. Dear reader, this is your judgment to make. Is it worth it?

Share
Adam Pagnucco, Corporate Welfare, Development, Economy, Metro

Smart Growth or Corporate Welfare? Part Two

By Adam Pagnucco.

In making the case for Bill 29-20, which would grant developers at Metro stations 15-year property tax breaks, supporters claim that Metro high-rise development is not currently happening. And they say that’s the case for the entire region.

Is it true?

WMATA had a spate of development projects at Metro stations from 2002 through 2007, when the region’s real estate market was hot. There are much fewer proposals in the works now. They include:

Grosvenor-Strathmore, Montgomery
WMATA selected Fivesquares Development as its ground lease development partner at the Grosvenor-Strathmore station. In 2018, the Montgomery County Planning Board approved a sketch plan for 1.9 million square feet of mixed use development at the site. The original plan was supposed to include seven buildings, two of which would be 300 feet tall and another 220 feet tall. However, Fivesquares subsequently claimed that it needed tax breaks to finance the high rises, thus giving rise to Bill 29-20. Fivesquares wrote the following in its testimony about the bill:

Simply put, but for this legislation, Montgomery County’s goals to promote high density growth at transit accessible locations and, specifically, to implement the Grosvenor-Strathmore Minor Master Plan Amendment that the Montgomery County Council and Montgomery County Planning Board unanimously approved in 2017, would not be feasible due to the prohibitive economics of building high-rise projects. There is a significant gap in building high rise projects due to the gap between costs and revenue and the unique infrastructure requirements of Metro sites.

In the absence of this legislation, instead of the potential at the WMAT A property at the Grosvenor Strathmore Metro station for over 2,100 units, including over 350 Moderately Priced Dwelling Units (MPDUs), the only feasible development would be lower density, stick-built housing that would dramatically underutilize the site, resulting in less than half the number of total housing units and MPDUs.

New Carrollton, Prince George’s
WMATA plans to replace the parking on the station’s south side with hundreds of thousands of square feet of office, retail and multi-family space. At full build-out, the site could have a dozen buildings ranging in size from five to fifteen stories. Construction of a new garage is also planned for the station’s east side. Along with Grosvenor-Strathmore, this is easily the most aggressive of WMATA’s current development plans.

A rendering of development on the south side. Credit: WMATA.

College Park, Prince George’s
WMATA is planning a 5-story project at this station with more than 400 housing units.

A rendering of development at College Park. Credit: WMATA.

Capitol Heights, Prince George’s
WMATA would like to place a 6-story residential building with ground retail at its Capitol Heights station parking lot. This project was terminated in 2018 but WMATA staff asked for a new solicitation last year. KLNB is advertising the project’s retail component.

Deanwood, D.C.
In 2018, the WMATA board approved a joint development project to replace its Deanwood station parking lot with a mix of residential and retail and a garage. The project is not high-rise; rather, it envisions four-story buildings.

That’s about it. The project in D.C.’s Takoma neighborhood looks stalled as does the Greenbelt site in Prince George’s, which was once considered for the FBI. Amazon’s arrival in Northern Virginia could eventually stimulate development at Metro stations there but that seems quite a ways off.

Other than the Grosvenor-Strathmore site (which led to Bill 29-20) and New Carrollton (which might not have been viable without the relocation of the state’s housing agency), none of these projects has a high-rise component. That’s not an accident. Developers at Metro station sites have to deal with replacing existing parking (either with a garage or underground), station access issues, bus circulation issues and even possible amenities like park space. There is also WMATA’s time-consuming approval process on top of any local planning approvals. Developers of private sites don’t have to deal with these problems. Combine the construction costs of high rise as opposed to wood frame with the extra costs of building at WMATA sites and the economics of such projects get difficult, even with high rents and condo prices.

DC Urban Turf, a website that tracks residential development, lists hundreds of new residential projects that have been delivered, are under construction or are planned in the area. Many of them are high rises. High rises are being built in the region. They are just not being built, for the most part, on Metro stations.

So if high rise construction at Metro stations requires huge tax breaks to work, are the bill’s supporters right? Should Fivesquares and other developers get 15-year property tax exemptions? There are lots of other considerations to be discussed. Let’s do that in Part Three.

Share
Adam Pagnucco, Andrew Friedson, Corporate Welfare, Development, Economy, Hans Riemer, Metro

Smart Growth or Corporate Welfare? Part One

By Adam Pagnucco.

For many years, MoCo has focused its land use and economic development policies on transit-oriented development. Since 2006, the county has adopted eight master plans centered on Metro stations, another four centered on Purple Line stations and one more centered on Corridor Cities Transitway stations. Another plan is in the works for Downtown Silver Spring.

The capstone for the Metro-based plans is development on top of the Metro stations themselves, which requires joint development agreements with WMATA. Placing the highest density on Metro stations, along with nearby parcels, enables the county to balance growth, transportation and environmental priorities in its march towards the future. For fifteen years, that’s what we have been told.

Now we are told that this approach won’t work without taxpayer subsidies.

The problem is that most, if not all, development on top of Metro stations is not proceeding. And that is because of economics. In order to be economically viable, Metro development projects must charge rents or condo prices sufficient to not only cover construction costs, financing and investor returns but also the unique costs associated with Metro station sites. The economics are particularly difficult with high rise projects, which have higher material and construction costs than wood-frame projects. And so the county council has proposed Bill 29-20, which would eliminate property taxes on Metro station development projects for 15 years and replace them with undefined payments in lieu of taxes to be set later.

In justifying the bill’s purpose, consider these remarks by Council Members Hans Riemer and Andrew Friedson, the lead sponsors of the bill, and Planning Board Chairman Casey Anderson at the council’s first work session.

Riemer
I want to say that this is a smart growth proposal. This is about making development feasible where decades of inactivity has demonstrated it is not feasible. If you look at Montgomery County and our Metro stations, you will almost universally see empty space on top of the Metro stations and despite efforts by WMATA over many years to support development at those stations, to solicit development on their property, there is very little that has happened. And there is very little that has happened recently, in the last ten years or so. Very little high rise, especially, and because of a shift in the market, I think which is driven by regional economic shifts and global economic shifts that have made the cost of high rise construction prohibitive except in the most high rent communities…

I think very broadly speaking, we have sought to channel all of our development, almost all of it, through a smart growth framework. We want to get housing that is high rise. We want to discourage sprawl. But the problem is we have not – the market isn’t producing the high rise that we have zoned for, that we want. And so the end result is we’re not getting much development. We’re not getting very much housing. We’re not even getting much commercial development.

Friedson
The idea that we’re forgoing revenue and that has a direct cost, that we’re leaving money on the table, we’re not leaving money on the table – the table doesn’t exist currently. That is the issue. There is no development, there is no investment. At best, the table is going somewhere else. It’s been shipped to another region of the country. It’s been shipped to another county. The whole point here is to create the opportunity. You know, the idea that we would be serious about transit-oriented development, that we would be serious about meeting our significant housing targets to address the housing crisis that we currently face but wouldn’t be willing to do anything about it is troubling. And we need a game changer. We need something to change the economic development path that we’re on, we need something to change the housing path that we’re on, that currently does not work. And I will say our housing situation, that is our version of a wall in Montgomery County. What we do with housing is a decision that we make on whether or not we want new residents here or not. That’s the local government version of whether we put up a literal or proverbial wall to say who can and who can’t live here, who we want and who we don’t want here.

Anderson
Will the development happen anyway? And I think the market is not just speaking, it’s screaming that the answer is no. Because you don’t have to take any particular real estate developer’s word for it, you can see what’s happening in the real world. It’s not just in Montgomery County, you can look at what market rents are at every Metro station in the region and you’ll see that there’s a few, particularly in Northern Virginia and in Bethesda, where rents can justify new high-rise construction there. Everywhere else, the answer is no, and that’s not just true of Grosvenor, or for that matter Forest Glen, as you mentioned, it’s also true of White Flint.

In considering these remarks, let’s remember who is saying them. It’s not County Executive Marc Elrich, who voted against numerous transit-oriented development master plans when he was on the council. It’s Casey Anderson, who has served on the Planning Board for nine years and chaired it for six; Hans Riemer, who has served on the council for ten years and is the current chair of its planning committee; and Andrew Friedson, who has emerged as the council’s principal champion of economic development during his first term in office. These are not development critics as Elrich has been. Anderson in particular, and Riemer to a lesser extent, are two of the architects of the county’s Metro-oriented land use policy and they are saying that it has failed.

They are also saying that the only way to rescue it is through what may ultimately become the biggest application of corporate tax breaks in the county’s history.

Are they right? We’ll discuss it in Part Two.

Share
Adam Pagnucco, COVID-19, Economy

Huge Demand for COVID-19 Applications

By Adam Pagnucco.

Montgomery County’s COVID-19 assistance application went live today around 3 PM and demand was both immediate and heavy.

One applicant who completed the county’s form described the process to me as lasting less than 10 minutes. She encountered no problems and said she was “very impressed.”

Another applicant tweeted that he applied roughly 45 minutes after the application went live and was assigned application number 721.

That’s important because, according to the county’s regulations, the first tranche of $10 million will include individual awards of $10,000 each. That implies that only the first qualifying 1,000 applicants will get initial assistance awards. Conceivably, the county could get 1,000 qualifying applications in just a couple hours – or less.

One glitch in the rollout involved an email signup shown on an earlier version of the website. (It’s no longer available.) I signed up a couple days ago and received notification of the application at 4:30 PM. By that point, the queue may have filled up.

Intense interest in assistance will result in the county’s initial funding being claimed RAPIDLY. Those who waited for email notification or other official notice from the county will no doubt raise process protests if they indeed lose out because of application timing.

The process has been far from perfect as I have previously written. But let’s also acknowledge that even with a perfect process, this was going to be very tough sledding.

Expect more of the same!

Share
Adam Pagnucco, COVID-19, Economy

Elrich Administration Releases COVID-19 Small Business Assistance Regs

By Adam Pagnucco.

At 9:09 PM last night, I published a post on the county’s $20 million COVID-19 small business assistance program noting that no regulations governing its disbursements had yet been sent to the county council or published for the public. Roughly 20 minutes later, the regulations were sent to the council and forwarded to me by multiple sources almost immediately. The regulations appear below.

There are many details of interest to applicants, who should read every word of these regulations. The provisions that stand out to me are the ones setting aside $10 million for near-term disbursement and reserving $10 million for later. Consider these specific provisions.

Section 4 (b). $10,000,000.00 of funds appropriated for this Program are reserved for businesses or nonprofit organizations that demonstrate Significant Financial Loss. The initial grant award disbursed under this component of the Program is $10,000. The remaining amount of Significant Financial Loss demonstrated by these businesses and non-profit organizations may be disbursed subsequently, subject to the availability of funds.

Section 5(e)(B)(6). Business that have suffered Significant Financial Loss will be eligible for an immediate disbursement of up to $10,000. If the Percentage Decline is 50% or greater, Subtract the Adjusted PHE Revenue from the relevant historical average (Monthly Historical Average for monthly Adjusted PHE Revenue, Quarterly Historical Average for quarterly Adjusted PHE Revenue) to get the Recommended Grant Amount, up to a maximum of $10,000.

Section 5(e)(B)(7). Subtract the Adjusted PHE Revenue from the relevant historical average (Monthly Historical Average for monthly Adjusted PHE Revenue, Quarterly Historical Average for quarterly Adjusted PHE Revenue) to get the Recommended Grant Amount, up to a maximum of $75,000.

Section 5(e)(B)(8). Subject to the availability of funds, once the initial $10,000,000 reserve has been committed, applicants who qualified for more than an initial disbursement of $10,000 and applicants who qualify for a grant that have not received funding will be evaluated and the remaining balance will be disbursed.

And so $10 million will be disbursed sooner and $10 million will be disbursed later. Instead of the full $75,000 maximum grant provided in the legislation passed by the council, applicants will get a maximum of $10,000 in the first round and may get a chance for more money later. When will the second $10 million go out? That’s not clear, but the caveat of “subject to the availability of funds” in Sections 4(b) and 5(e)(B)(8) is not encouraging. Given the volume of paperwork required in the application process, it could take a while.

None of this appears in the legislation creating the program. The council prioritized speed in disbursing the full $20 million it allocated for assistance. The executive branch took twice as long as the District of Columbia to get its assistance program going and now plans to hold back half the money. The council just introduced a new appropriation of $5 million for restaurants and retailers. Given these regulations, what will happen to that money?

The executive branch is not implementing this program in accordance with the legislative intent of the council. The council must take additional action to enforce its will. NOW.

The regulations appear below.

Share
Adam Pagnucco, COVID-19, Economy

Fact, Rumor and Chaos on COVID-19 Assistance

By Adam Pagnucco.

The county has announced via press release that COVID-19 assistance for small businesses will be open for application tomorrow (April 15). But questions arise both from the release and what is not in the release.

1. The application process is supposed to open in the “mid-afternoon.” No exact time is given in the press release. Will business owners be refreshing their browsers for hours waiting for the application to go live?

2. According to the press release, “The County will host webinars to answer questions and provide updates on the PHEG program starting at 9 a.m. Mondays through Saturdays. The first webinar will be held on Thursday, April 16.” In other words, the first Q&A webinar will not take place until THE DAY AFTER applications open.

3. As of this writing, multiple sources in the council building report that the council does not have final regulations governing the disbursement of the money. How is the administration going to make decisions on who gets the money? Why have these criteria, in the form of a regulation or otherwise, not been publicly released – or at least sent to the council – prior to the start of applications?

4. The legislation passed by the council authorized grants of up to $75,000. At the time of passage, council members stressed their interest in rapid disbursement. Today, a phone call was held by representatives of the executive branch with representatives of the business community in which some details were shared about the administration’s plans. According to an individual present on the call, “We heard that the 1st wave was the first 1,000 qualified recipients would receive $10,000 as a start. They may receive more later TBD.” Furthermore, only losses in March will be considered and priority will go to businesses with losses of more than $50,000. An earlier requirement that applicants apply for federal and state assistance first has been dropped. So it appears that $10 million will be disbursed first and that $10 million will wait for later – at least as of this writing. If there is indeed a hold on part of the money, why is that? What will happen to it and when will it get released?

This would be a lot easier to figure out if the administration simply released its regulations on how they are making these decisions, or even a simple guidance document. Instead, in the absence of published documentation, rumor rules the day.

Let’s be clear: the executive branch is in a tough spot here. They had to stand up a $20 million assistance program on short notice (although D.C. did the same in half the time). If they disburse small checks to lots of businesses, the money may not be enough to help any of them. If they disburse large checks that might be helpful, MANY businesses will be left out. So there are choices to make.

The problems are that the executive branch is diverging widely from the intent for speed of the legislation passed by the council, is forcing applicants to sit next to a browser and refresh it potentially for hours, is not offering aid for completing the application until the day after it goes live and has not published details of how it intends to spend $20 million.

This process is in need of improvement.

The press release is reprinted below.

For Immediate Release: Tuesday, April 14, 2020

Montgomery County Public Health Emergency Grant (PHEG) Program Applications Will Be Accepted Starting Mid-Afternoon on Wednesday, April 15

Montgomery County will begin accepting applications to its Public Health Emergency Grant (PHEG) program beginning mid-afternoon on Wednesday, April 15. The PHEG initiative is designed to help for profit and nonprofit businesses with 100 employees or fewer during the current public health crisis.

A sample of the application is now available in English and Spanish on the PHEG program web page. The website provides information for businesses on how to prepare their grant applications. The sample applications will guide businesses in pulling together the information and documents required to file their applications.

A fact sheet describing eligibility and document requirements also will be available in Spanish, Amharic, French, Korean, Mandarin and Vietnamese.

The $20 million PHEG initiative is a collaborative effort between County Executive Marc Elrich and the Montgomery County Council. In addition to for-profit and nonprofit businesses, the program is open to businesses with no employees including sole proprietors and independent contractors.

Montgomery County’s PHEG program is intended to provide financial assistance to establishments that have experienced a significant reduction in revenue as a result of the current public health emergency. The County is encouraging businesses and nonprofit organizations to review other assistance programs and apply to those for which they are eligible.

The County will host webinars to answer questions and provide updates on the PHEG program starting at 9 a.m. Mondays through Saturdays. The first webinar will be held on Thursday, April 16. For links and instructions, visit www.montgomerycountymd.gov/biz-resources/pheg.

More information on the PHEG program is available at www.montgomerycountymd.gov/Biz Resources/pheg/. Questions about the program should be directed to BizinfoCovid19@montgomerycountymd.gov.

For the latest updates, visit the County’s COVID-19 website and follow Montgomery County on Facebook @MontgomeryCountyInfo and Twitter @MontgomeryCoMD.

#

Share
Adam Pagnucco, COVID-19, Economy

D.C. Leads MoCo on COVID-19 Grants

By Adam Pagnucco.

As complaints mount on MoCo’s not-yet-functioning process for distributing COVID-19 grants to small businesses, let’s contrast our performance to the District of Columbia.

The D.C. City Council passed a bill creating a $25 million grant program for small businesses impacted by the COVID-19 crisis on March 17. The bill also contains a number of delays on taxes and regulations that were not part of Montgomery County’s relief package, although some similar measures have been adopted by other counties in Maryland.

The D.C. government opened the applications process for the grants on March 24. The applications were closed on April 1.

That means 7 days elapsed between the creation of the program and the start of applications. The total time between creation of the program and the closing of applications was 15 days.

The Montgomery County Council passed a bill creating a $20 million grant program on March 31. On April 8, 8 days later, 7 council members wrote a letter complaining to the county executive that the grant process was nowhere close to being ready. That same day, the county published a document list for the grant process but had no application available.

Today is April 14. D.C. opened its applications within 7 days of its council creating its grant fund. MoCo has gone 14 days since creating its fund and, as of this writing, no applications are online. It has been almost two weeks since D.C. closed its application process and we don’t even have one yet. Small businesses in D.C. had a chance to apply for assistance in time to pay rent and bills due on April 1. Small businesses in MoCo did not have that chance.

What is going on, MoCo government?

Share
Adam Pagnucco, COVID-19, Economy

Will County Bureaucracy Strangle Small Business Assistance?

By Adam Pagnucco.

On March 31, the county council passed Bill 16-20E, which established a $20 million Public Health Emergency Grant Program to assist businesses and non-profits with 100 or fewer employees that have been damaged by the coronavirus crisis. The idea behind the bill was to get relief to small businesses quickly before they go under.

Unfortunately, the county bureaucracy may have other ideas.

Yesterday, seven council members released a blistering letter to the county executive slamming the administration for taking too long to implement the grant program. The letter stated in part:

This lack of urgency is beyond disappointing and directly contradicts the Council’s clear intent to get this funding to our local employers as quickly as possible. While the County’s capacity to help may be limited, our ability to move quickly should not be, especially as the level of government closest to our residents and employers. For the businesses struggling to keep their lights on and for the employees who depend on them, this program is only effective if it can get funds out in time to provide help when it’s desperately needed. Without question, that time is now.

We must move with the urgency that this moment requires because our small businesses and nonprofits are counting on us. The only thing that will help businesses right now is getting them the relief money already approved and appropriated by the Council. We urge you to get the Public Health Emergency Grant Program up and running immediately. We cannot afford to wait for some other support to come first. If we fail to act in time, our local businesses won’t be able to afford to stay open. The County Council stands ready to support your administration however we can.

We reprint the letter below.

Shortly after the letter was written, the administration published a required document list for businesses applying for assistance. (As of this writing, the application itself is not finalized.) The documents include a dizzying array of tax statements, bank statements, interim monthly or quarterly financial statements, corporate articles and invoices and quotes for telework software (if applicable) as well as a requirement that businesses verify their good standing on a state website. Most crucially, the document list states in bold: “You must apply for any applicable State and Federal programs to qualify for County assistance.” It then requires applicants to submit “evidence of application to Federal and/or State COVID-19 assistance programs, including award or denial letters.”

There is no requirement in the legislation passed by the council that applicants for county assistance must first apply for state or federal assistance. The council considered an amendment making county assistance “secondary” to state and federal assistance and allowing it to be used as a “supplement” to such aid but decided against it. This requirement has been added by the administration in direct contradiction of the will of the council.

This requirement is of great consequence. When following the links provided by the executive branch, one quickly sees that two of the state’s assistance programs – the Maryland Small Business COVID-19 Emergency Relief Grant Fund and the Maryland Small Business COVID-19 Emergency Relief Loan Fund – stopped accepting applications on April 6, two days before the administration published its document list. So by the executive branch’s criteria, if a MoCo small business missed the state application window, which was only open for about two weeks, it is disqualified from seeking county assistance.

The county is requiring business assistance applicants to apply to these two state funds but both are shut down.

As for the federal assistance programs, the U.S. Small Business Administration (SBA) is under heavy criticism for not getting money out quickly. Some small businesses report that they have not heard anything from SBA after applying, not even a confirmation email. One of the SBA programs relies on private financial institutions to process applications, and some of them are either not taking applications or limiting them to existing clients. One community bank president even said, “What I thought was a brilliant plan is turning into a quagmire of quicksand.”

MoCo is insisting that its businesses jump down these bottomless state and federal rabbit holes to get county assistance. Again, this requirement simply does not appear in the legislation that the executive branch is charged with implementing.

So which businesses will be best able to navigate the process set up by the administration? Naturally, they will be the ones who are the most financially sophisticated, have the best accountants and have the most familiarity with government business assistance programs. Those who lack those assets – especially those with limited English language skills and less entrepreneurial experience – will be left behind. And so a county that prides itself on progressive values might actually wind up directing assistance disproportionately to the most privileged elements of the business community while the others will face extinction.

It’s not too late for the county to streamline its process. But it has to act fast. As in, NOW.

Share
Adam Pagnucco, Economy, Prince George's

Alsobrooks Brags About Beating MoCo

By Adam Pagnucco.

In a blast email sent today, Prince George’s County Executive Angela Alsobrooks bragged about a recent Washington Post story showing her county pulling ahead of Montgomery County in job creation. The email is reprinted below.

*****

Prince George’s Overtakes Montgomery as Top Job Creator in Maryland Suburbs

Dear Prince Georgians:

In case you missed it, an article published Monday in the Washington Post showed that our County has officially overtaken Montgomery County in terms of job creation for Maryland.

From 2013 to 2018, we added 21,236 jobs in our County, growing by 7.1%.  That growth secures our County’s spot as the top job creator for the entire State of Maryland.  I am Prince George’s Proud to say that these numbers confirm what we have been saying, which is that we are the economic engine for our State.

As the article states, our job growth is due in part to honest and effective political leadership in our County over the past several years.  In addition, our County has aggressively courted businesses by making key investments over several budget cycles.  We are not just waiting for businesses to come, but instead going out and beating the bushes to tell the story of Prince George’s.  These factors, plus the strong working relationship that we have with our colleagues on the County Council, have contributed to a very business-friendly environment in our County.

As we maintain the spot as the top job creator for the State of Maryland, we will not rest on our laurels.  Over the next several years, we plan to continue making investments to incentivize businesses to locate to Prince George’s County.  Some of our top priorities include high-quality dining and amenities, technology companies, and even federal government facilities that are looking to relocate.

We also plan to invest in creating what we call the Downtowns of Prince George’s.  These are areas where we will focus on mixed-use, transit-oriented development to continue attracting new businesses and growing our commercial tax base.  In the past year alone, we have seen several successes with these projects and the investments we have already made.

For example, in the area around the New Carrollton metro, Kaiser Permanente opened its new regional headquarters last year, and we learned that WMATA plans to move its regional headquarters there as well.  Construction will soon begin on the Carillon Project in Largo, which will revitalize the former Boulevard at Capital Centre.

Finally, we broke ground on the Hampton Park Project, which will replace the former Hampton Park Mall in Capitol Heights.  We’ve already secured several commitments from businesses to open in this location when construction is done, including the award-winning Ivy City Smokehouse restaurant and a Market Fresh Gourmet grocery store.

Those are just a few of the accomplishments we had in 2019 in terms of attracting new businesses and job creation.  You have my commitment that my administration will continue telling our story, making critical investments and attracting new businesses to create even more jobs over the next several years.

The best is truly yet to come for Prince George’s, and I know that by working together, we’ll have an even better story to tell in the coming months.

Yours in service,

Angela Alsobrooks

Prince George’s County Executive

Additional Coverage: The Economy is Booming in Prince George’s County

Following the Washington Post article, WJLA ran a story discussing the booming economy in Prince George’s County.  We have thousands of job openings in the County, and engineering firms like ATCS are excited to be here and hiring now. In case you missed the story from WJLA, watch it online by clicking here.

Share
2018 Elections, Montgomery County

Looking for the Next County Executive, Part II: The Future

The next county executive will face major challenges. Montgomery County’s economy is not performing well. While it’s a long-time cliché that we’re losing business to Northern Virginia—Ellen Sauerbrey campaigned on that theme in 1994—the County has not done well in creating new employment over the past several years.

Jobs, of course, are critical to success of county residents and also the tax base. Employment is the best social justice program ever invented. If the tax base stagnates, there will not be enough money to maintain the array of services for which Montgomery County is renowned, let alone spend more to lend people who need it a helping hand.

I’m hoping that whoever is elected county executive will have a forward-thinking plan for economic development. Though the newly launched Montgomery County Economic Development Corporation imitates the highly successful efforts of Howard and Fairfax to pursue business opportunities, I remain skeptical that it will achieve the same levels of success, as currently managed and structured.

We also need someone who is willing to break a few eggs and not see barriers as they launch more ambitious projects in a manner reminiscent of Doug Duncan. Even though they will not all work out, new ideas both for the County and how to organize County government to work better and more efficiently need to be tried or the County’s relative decline will start to feel a lot less genteel very soon.

The challenge will be especially great because tax increases are not a real option. Though we are now out of the recession, the income tax remains set at the charter limit. In 2016, the County Council achieved the unanimity required to increase property taxes significantly above the charter limit. Fees have also gone up for everything from recording property to public parking. The one area of tax opportunity may be making commercial development pay for improvements that clearly aid their own efforts.

While being inventive, the new county executive should maintain certain key policies of the Leggett Administration. In particular, the County must continue to adopt budgets and fund future obligations in a manner that retains its AAA bond rating. The County Executive also needs to focus on the core priorities of local government. Too often, the County Council has spent an inordinate amount of time on issues peripheral to core functions.

Finally, and perhaps most important in our era of seemingly toxic politics, we need someone who continues Ike’s outstanding record of listening respectfully to people who disagree, often vehemently, and is a model for civility in governance. That should be possible even as the new executive presses forward with new ideas and needed reforms.

Share