Rockville seeks competitive edge -- Gazette.Net


At the Rockville Summit, working groups and residents from all over the city outlined some of what makes the city unique and how it can improve.

Now, it’s time for the pros to decide how to take their advice and incorporate it into policy.

Laurie Boyer, executive director of Rockville Economic Development Inc., said part of the goal of the Rockville Summit, held Nov. 3, was for residents to identify Rockville’s competitive strengths.

“We don’t want Rockville to start losing jobs and businesses to other jurisdictions, so what do we do to remain competitive?” she said, adding that the Washington, D.C., region is strong and competitive as a whole.

“What we try to do as individual jurisdictions is to identify what differentiates us from Gaithersburg and from Arlington and from Bethesda and what gives us that competitive edge that might make a difference to certain types of employers and different industry types,” Boyer said.

In comparison to the rest of the nation, Rockville has high property costs and a limited amount of available land, Boyer said, but it has a highly-educated workforce, which means high-tech firms can quickly fill jobs with qualified employees. Rockville has many high-tech and biotech entrepreneurs, Boyer said, in part because of its proximity to federal agencies, large science companies and research universities that can “spin off” new, smaller businesses as the result of research.

“Rockville’s a great petri dish, if you will, for developing those types of strong entrepreneurs,” she said.

Earlier this month, commercial real estate firm Jones Lang LaSalle reported that today’s fast-growing technology companies are more likely to choose sites based on access to intellectual capital and urban living amenities that “young knowledge workers” prefer.

“The labor pool is tighter in more established tech markets, such as the Silicon Valley Austin and Seattle, prompting companies to look for space and set up shop in less-traditional markets, such as Atlanta, Chicago and Washington, D.C.,” Amber Schiada, a research manager for the company, said in a statement.

Boyer said access to transportation hubs, such as Metro stations, and amenities within walking distance are incentives for companies to locate within the city limits, especially within the Town Center area. In other areas of the city, like on Research Boulevard, companies can have more space and available surface parking, however.

“It helps us diversify what we have available and, I think, helps make Rockville more marketable when you have more than one type of building opportunity for a company to look at,” Boyer said.

Another Jones Lang LaSalle report comparing rent costs and vacancy rates in three different areas along the Rockville Pike found that the area overall had a 9.3 percent of total office vacancy. The report looked at the areas in Rockville’s Town Center, around the Twinbrook Metro station and the White Flint area just south of the Rockville city limits.

Of the three areas in the report, the White Flint area had the highest average rental rate for office space, followed closely by Town Center. The report said that the majority of space under construction in Montgomery County is in the Rockville Pike area.

Andrea Jolly, executive director of the Rockville Chamber of Commerce, said one of the things that stood out to her at the Rockville summit was how residents really are not anti-business, although people often perceive them that way.

“There’s always been a perception of a we-[versus]-they attitude of businesses and residents, but it was clear to me at the summit that that perception has been overblown,” she said.

Overall, residents understand that Rockville needs businesses to provide services and boost the tax base, Jolly said.

One area that Boyer said Rockville needs to work on is developing an incentives policy to guide city officials when they are asked to provide incentives.

“Because it’s easier today than it ever has been for a company to move [anywhere], then it’s much more competitive,” she said. “And jurisdictions that are able to provide some sort of financial carrot, if you will, to lure the company in, it makes that area more attractive.”

Before handing over cash incentives, however, the city has to look at the long-term financial gain the business can provide, and consider how long it will take the city to make its money back in jobs and tax revenues. For many businesses, expedited permit review to get in the door quicker is even more valuable than cash incentives.

“For businesses, time is money,” she said. “... Often, it’s those non-financial incentives that are much more helpful to a company than just a one-time cash assistance.”

Boyer said the need for a defined incentives policy came up several times during the summit, and she expects REDI to work with city staff to begin developing one over the next few months.

Recently, the need for an incentives policy to attract and retain businesses became more obvious, Jolly said. Gaithersburg’s annexation of the Sears property south of Shady Grove Road was a catalyst for the mayor and council to consider how Rockville can be competitive with surrounding municipalities, she said.

“That just made us look at what we’re doing to be business-friendly,” Jolly said.

Since the city does not have its own economic development fund to provide cash incentives to developers, it sometimes has to provide financial assistance in a round-about way. Recently, Rockville officials reached a preliminary agreement with Montgomery County officials to provide some gap financing to Duball LLC, a developer that is planning a mixed-use complex with a Cambria Suites hotel in Town Center. The county is planning to pay Rockville’s $980,000 portion of the incentives package up front, and the city will pay the county back over a period of six years.

The financing strategy is not new. Rockville reached similar preliminary agreements with the county to provide funds for the new Choice Hotels headquarters and Rockville Housing Enterprises’ purchase of the Fireside Park Apartments.