Gaithersburg’s economic development chief waxes optimistic -- Gazette.Net


Abby Pawil wanted to open a pizzeria in Olde Towne Gaithersburg, but found her customers didn’t have anywhere to park.

In stepped Economic Development Director Tom Lonergan, who got city officials to come to the table to work it out. Now, Pawil is hoping it will be hungry customers gathering the tables of her new restaurant in May.

“He’s the one who brings everyone to the table,” Pawil said of Lonergan, whom she said helped walk her through the city’s planning and permitting process.

Her new restaurant, to be at 312-A E. Diamond Ave. in Gaithersburg, will now have 24 parking spaces instead of 12.

Lonergan, Gaithersburg’s economic development director, has held his position for more than a year, bringing the city council, local businesses and developing communities together.

When he was selected for his position in October 2011, Lonergan moved from New Jersey to the Kentlands. He was tasked with developing a healthy business climate, strengthening existing businesses and promoting employment opportunities. The city has made significant progress.

According to Lonergan, the vacancy rate for retail and offices spaces has decreased since 2010. Data from Montgomery County show that the countywide vacancy rate for retail space was 4.4 percent in the first quarter of 2010, and 3.9 percent at the end of 2012.

Out of Gaithersburg’s 309 retail spaces, 3.6 percent are now vacant, compared to 6 percent in the first quarter of 2010.

Some of Gaithersburg’s economic tools, including its Economic Development Opportunity Fund, have helped retain businesses in the past year. Sodexo Inc., a food and facilities management company at One Washingtonian Center, considered moving its headquarters and more than 500 employees to another city, but ultimately decided to sign a 10-year lease for its Gaithersburg location. The city of Gaithersburg approved up to $500,000 in February to help Sodexo renew its lease.

Although the city has been “remarkably successful” in attracting quality tenants, he said some spaces have been difficult to fill.

In the Kentlands, 654 Center Point Way has been vacated and re-occupied multiple times. Restaurants The Last Mango, Tony and James, Zodiac Grill and 44 Sports Bar and Grill have come and gone.

Lonergan said a new tenant soon will occupy the space, but the name of the tenant has not yet been released, pending the final paperwork.

Keeping retail spaces occupied involves making important relationships, he said. The city’s strategy has been direct outreach and keeping close contact with prospective tenants.

In Olde Towne, Lonergan is focusing on 315 E. Diamond Ave., a 1.2-acre site that he and Director of Planning and Code Administration John Schlichting want to transform into a public plaza with residential units and parking.

Lenny Levy, a co-chairman for Gaithersburg’s Olde Towne Advisory Subcommittee, said the group’s development ideas for Olde Towne are still being decided, but Lonergan has been supportive through its early stages.

“He’s very in tune with what should be done and what needs to be done to make it a vital part of the city,” Levy said.

Lonergan said Olde Towne’s future residents will influence the types of businesses that eventually move in.

“There’s an old adage that says, ‘Retail follows rooftops,’ and the rooftops are starting to get delivered here,” Lonergan said.

He would like to see more unique businesses that serve the local community and become a draw for more distant residents. Restaurants with distinctive food, specialty markets and clothing stores could become those destinations.

“Not everything needs to be a national chain that you find on every corner,” he said.

Prospective businesses are snapping up spaces at Gaithersburg’s new Crown development, built on the former location of Crown Farm at Sam Eig Highway and Fields Road. According to Schlichting, the city has brought in more than $1 million in building permit fees from nine retail and mixed-use structures in the Crown development.

Krista D’Iaconi, development manager for the company handling Downtown Crown, the retail district in the community, said about 50 percent of Crown’s retail space had been leased out as of January 2013. Residential developer Pulte Homes held an open house at Crown to show model homes to potential buyers on Feb. 23. The RSVP-required event filled up within hours.

When it comes to opening up shop in Gaithersburg, Lonergan said, the city’s in-house planning, permitting and inspection capabilities, coupled with its economic opportunities programs, give it “the business-friendly advantage” over neighboring towns.

The Crown community is also preparing for a future transportation system, the Corridor Cities Transitway. The upcounty bus rapid transit system would have multiple stops between the Shady Grove Metro station and the COMSAT property in Clarksburg.

“Getting the CCT built is going to be a critical part of facilitating future development,” he said.

Another major transportation project in Gaithersburg is the Watkins Mill Interchange, which would link two unfinished portions of Watkins Mill Road over Interstate 270, with exits built in. The planned interchange would relieve traffic at the intersection of Md. 355 and Montgomery Village Avenue.

Finding funding for the interchange has been slow, however. Lonergan said the state has set aside about $40 million for the $161 million project. Among other options, the city is considering a “tax increment finance district,” in which local infrastructure development — in this case, the interchange — would create additional tax revenue to fund itself.

“I feel more confident than I ever have that we are getting closer to an agreement on some sort of funding package that will get this project done,” Lonergan said.

The city continues to work with the county to finance the project. Lonergan said building the interchange is essential for future development in the area.

“Beyond the excitement of a new highway’s a facilitator of development unlike any other,” he said.