MacRo LTD Blog

Leasing City Owned Commercial Real Estate: Good Call, Mr. Griffin!

When government plays landlord, even in a soft real estate market it can’t forget that “Transparency” thing! 

City of Frederick Parking Deck 5 All Saints Street

A few days ago I received an email with a vague real estate leasing question from a local business person … and then another from a well known local reporter.

The first email asked: “… say I wanted to rent a space downtown. 3,000 square feet, say a warm white shell, say in historical district, near Carroll Creek.  What kind of cost per square would I be looking at?”

I shared some very general comments with him and got on with other things.

The next day,  Katherine Heerbrandt with the Gazette sent me a facebook message asking me pretty much the same: “Hey, Rocky, Can you give me an idea of how much per sq foot property on the Creek is going for? … I need it for a story I am writing…thanks!”

Again I shared the same opinion, but had to close with: “Hmmm … this it second similar question I’ve received in the last 24 hours … is this a test?”

I then communicated back with the first inquirer with the same question and learned about the City’s recent dealings with the owners of one of Frederick’s most talked about restaurants Volt located at 228 North Market Street.

Seems that Richard Griffin, Director of Economic Development at City of Frederick, and others have been carrying on serious negotiations with the Volt folks over a location for a new eating and drinking establishment – Bar 228.  The identified spot is the 3,000 square feet of unfinished retail space on the ground level of the new All Saints Street parking garage between Carroll and East Streets.

Also known as City Deck 5, the retail portion of the property has been vacant since the structure was completed early last year.  Apparently the City of Frederick has been marketing the property to the public in a pretty non-aggressive fashion.

Be that as it may, the good news for some is that the serious discussions did yield a proposal that was scheduled to go before a workshop of the Mayor and Board of Aldermen today.

The bad news for the proposal is that once the details of the Bar 228, LLC. deal was circulated amongst the general Frederick restaurant community, many began “crying foul” over a “sweetheart deal” as Ms. Heerbrandt stated in her Gazette piece that will hit the papers in the morning.

The details of the proposal on the surface do appear to be quite “sweet” as outlined in the Executive Summary to the Mayor and Board of Aldermen regarding the Outline of Proposed Lease Agreement for Bar 228 LLC.

This article is not written to cast a judgment on whether this proposal is truly a sweetheart deal or just a fair market transaction under the current economic climate.   Frankly, in this market I have found that absolutely anything goes.  There are plenty of transactions out there where highly motivated landlords are literally paying tenants to move in to their vacant space … so eye popping deals are happening out there!

It happens that the workshop item scheduled for today was “pulled,” and I consider that a good thing.  According to Ms. Heerbrandt’s piece, Mr. Griffin pulled the item because the City wants “to put it out to the public to see if anyone else has an interest in leasing the space.”

I’m happy to know that the City realizes that the process it follows to enter into real estate transactions is very different from that of a private individual or firm.  Governmental actions require full transparency to the public.

I’m reminded of the effort a former client made to acquire Carroll Creek Sites B and C in downtown Frederick around 2002.   The properties were not being marketed at the time by the City.

Bradley Tavel, President of Main Street Development in Rockville, Maryland, presented and offer to the City that appeared to be a fair market offer for the time.  Not feeling like it was fair to just deal one on one with Tavel, without other members of the public being given the opportunity to bid, the City issued a formal Request for Proposal (RFP) out to potential developers and commercial real estate brokers.

Tavel responded appropriately, only to find that he was the only one.  Scratching their heads, the City felt compelled to reissue the RFP to a broader market.

Again Mr. Tavel responded, and again as hard as it is to believe, he was the only one who had submitted an offer.

Feeling that the offering was sufficiently vetted, the City then proceeded to make a deal with Tavel, for what are now improved buildings known as South Market Center (office/retail complex) and Maxwell Place (residential condominiums).

For the buyer or tenant, such a process can be frustrating, but one must remember  that government is held to a different standard.

So, hats off to Richard Griffin and his City cohorts for recognizing the need for a proper vetting process for the All Saint Street site.  After a county election where candidates cried out for transparency, it’s good to know that those in our City government are on top of this issue.

As a big fan of the success that Hilda Staples and Bryan Voltaggio have enjoyed, I wish them well in their efforts to bring another great restaurant to Frederick, as I know that it will result in another success story!

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The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland.  He also writes for

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