MacRo LTD Blog

City of Frederick: Economic Development Incentives and Zoning Changes Coming Soon!

In today’s economic climate, no matter how wonderful we believe the Frederick community is, it is still a dog eat dog environment when it comes to attracting and retaining large and small businesses.

EDAC_ChangesAfter a year of research, meetings and working with staff, the Mayor’s Ad Hoc Economic Development Advisory Council (EDAC) has been proceeding well with its assigned task:

To provide advice and specific recommendations to help ensure that the City of Frederick, both today and into the future, is the preferred community in the Baltimore Washington region for attracting private business investment, jobs, and economic opportunity.

As noted in a February 2015 post, the council made the decision to place its focus on three general categories related to City policies with initial tasks under each:

  1. Taxes & FeesBusiness and Personal Property Taxes (BPPT)
  2. Regulations – Land Management Code (LMC), the City’s zoning ordinance
  3. Business Incentives/Support – a Small Business package for targeted industries

Fast Action

Moving quickly with the matter of Business and Personal Property Taxes, it only took a handful of meetings for this EDAC subcommittee to have staff develop a proposal to phase out the program over the next ten years that has been generating an average of $2.6 million in revenue to the city coffers in recent years.  The Board of Aldermen voted 4-0 April 16th of this year in favor of the EDAC recommendation.

About $1.4 million of the levied taxes have been imposed on major businesses that have large investments in equipment, machinery and other tangible items.  Businesses such as Medimunne (now owned by AstraZeneca), the Frederick News Post and Fairchild Controls will be primary beneficiaries.

The only exceptions will be companies that are considered public utilities, such as Potomac Edison, which will still be required to pay the tax that generates about $1 million per year.

The remaining $200,000 in taxes come from the hundreds of small businesses scattered throughout the City.  In a recent Frederick News Post article, a number of downtown Frederick boutique businesses gave mixed reviews to the program, as they may pay no more than $50 per year.

What’s all the fuss about, you may wonder? Simply put, nearly every jurisdiction around the country wants to attract big clean businesses, and the City of Frederick is no exception.  Competition for new and expanding businesses is fierce, because they bring jobs to the community and inspire commercial real estate and industrial land development. And besides, Frederick County does not have such a tax; so why shouldn’t the city even the playing field in this arena?

The Big Hairy Audacious Goal

Jim Collins is a well-known author of business leadership books, including his Good to Great series, which has taken the nation by storm over the last 20 years.  If he didn’t coin the phrase “Big Hairy Audacious Goal” (affectionately known as a BHAG), he sure has capitalized on it.  For Collins, the only way to accomplish a task is to start with the Who Factor by “getting the right people on the bus and in the right seats.”  From there you set a challenging goal and approach it in a systematic manner.

When it comes to tackling the city’s Land Management Code, it appears that in the assemblage of EDAC council members, Richard Griffin, his staff and Mayor McClement gathered together a good team. The subcommittee that came together to take on this task has had deep experience in dealing with this monstrous document that has been found to be confusing, conflicting and constrictive in dealing with small and large zoning and development proposals … not to mention slow to process.  Many terrific private sector ideas for the development of downtown real estate and surrounding city commercial, industrial and mixed use projects have been hampered or abandoned for no other reason than that the LMC does not provide the opportunity to go forward.

Should the LMC be repaired or replaced? Well, the jury is still out on the latter, as it could be very costly and time consuming.  But EDAC was in full agreement that something had to be done as soon as possible.

It was the Land Use Council, an arm of the Frederick County Builders Association, which provided the Mayor with its basic wish list of items that can be repaired with minimal cost and effort. These fell under eight board categories in a 13 page report to increase competitiveness:

  1. Application Review and Approval Processing
  2. Demolition Delays
  3. Street Standard Inconsistencies
  4. Parkland requirement Options
  5. Forest Conservation Standard Opportunities
  6. Adequate Public Facility Ordinance Thresholds and Inconsistencies
  7. Landscaping Standard Thresholds and Impacts
  8. Architectural Review Clarification of Intent

With these issues driving the train, the city is in the process of issuing a request for proposal to find a engineering/zoning consultant to assist in this effort.

On Mary 30th 2015, reporter Nancy Lavin at The Frederick News Post authored a well written article on the matter.   Mark Friis, CEO at Rodgers Consulting, is quoted saying that many consider the LMC as an anti-development code that must be addressed to make the city more competitive.  “We’re in a competitive world nowadays,” he stated. “If it’s difficult to do something here. There’s lots of other places where it’s not so difficult.”

Truly, no matter how one looks at the issues with the LMC, changing it is a BHAG!

Developing a Micro Investment Program

The third task identified by the Economic Development Advisory Council wants to find ways to make it easier for start up and expanding small businesses to grow. Without a doubt, entrepreneurship is the life blood of the city’s thriving community.  Unfortunately, very often with rising commercial real estate lease rates, tenant improvement costs and regulatory expenses, many of these business people with great ideas lack the capital required to begin or expand their ventures.

The subcommittee headed by EDAC co-chair April Reardon (owner of the Velvet Lounge Boutique located in the heart of Frederick’s downtown area) knows all too well these challenges.  With the energy of her passion for making things happen, she, her group and staff have worked tirelessly to identify incentives and support ideas that the City of Frederick can offer this segment of the business community.

One such idea, in the final stages of development, is the establishment of a fund that targets catalytic projects for industries of advanced technology/manufacturing, life sciences and information technology.  From this the city would provide matching funds for tenant improvements and the like for new and expanding businesses.

This program is likely the first of several that evolve from the workings of this EDAC subcommittee and the terrific support provided by Richard Griffin and his key staff members, Bobby Baumler and Michelle Kershner, in the city’s Department of Economic Development.

At the end of the day, be it a BHAG or micro funds, the goal is all about identifying and implementing ideas that inspire economic development by attracting and retaining the type of industries that bring good jobs and new opportunities to the residents of the City of Frederick and its surrounding communities. For me, it has been and will continue to be an honor to be a part of this campaign.

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The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few.



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