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February 2017:

Biz Roundup

February 6, 2017

Posted in: News

HHC Acquires Two Downtown Columbia Office Buildings

The Howard Hughes Corp. (HHC) has expanded its holdings in Downtown Columbia with the acquisition of the American City Building (ACB), which sits adjacent to Whole Foods Market on Little Patuxent Parkway; and One Mall North, positioned on the outside of the ring road surrounding The Mall in Columbia. Both purchases were underwritten in view of their future development potential.

The purchase of ACB for $16.5 million unlocks the potential for redevelopment in the Lakefront District in Downtown Columbia for up to 1.5 million square feet of additional density, as its acquisition allows for termination of restrictive covenants on neighboring parcels of the company’s holdings. Specific plans for the ACB site and its adjacent surface parking lot contemplate complete demolition of the existing structure, which is mostly vacant, and development of a new, mixed-use project with multi-family, retail and restaurant space.

One Mall North, which is 100% leased, is a 97,500-square-foot, four-story office building. The low-rise structure and surface parking totals 5.37 acres. The building is currently leased to a diverse roster of tenants, including medical, financial, engineering and technology companies, with minimal near-term rollover. The in-place net operating income is approximately $1.6 million, and the purchase price is $22.25 million.

The longer-term value creation opportunity is due to the site’s underlying zoning potential, which allows for a variety of uses, including retail, office and multi-family, with new construction of up to nine stories. This makes the parcel suitable for significant future redevelopment.

DOC Approves Rise Zone Around UMCP

The Maryland Department of Commerce (DOC) has approved a Regional Institution Strategic Enterprise Zone, or RISE Zone, in and around the campus of the University of Maryland, College Park (UMCP). The designation aims to spur economic development and job creation by allowing commercial and industrial businesses that move into, or expand significantly within, the zone to benefit from real property and income tax credits. Businesses in targeted industries, including engineering, cybersecurity, additive manufacturing, aerospace and biotechnology, among others, will be eligible to receive increased incentives.

Existing businesses in the RISE Zone that invest a minimum of $5 million and create at least 50 jobs are eligible for the benefits, which include income tax credits. Companies in target industries are eligible for county and municipal real property tax credits as high as 75% for the five years that the designation is active.

The Greater College Park RISE Zone covers approximately 470 acres, including portions of the university’s campus, the City of College Park, and the adjacent Town of Riverdale Park. Major projects in the RISE Zone include The Hotel at the University of Maryland, a 300-room luxury hotel and conference center expected to open in July 2017; a 75,000-square-foot office building; two multi-family residential projects near the College Park Metro Station; and 111,000 square feet of flex space. The Hotel at UMD will also include facilities for academic research and incubation space for startup companies.

Kittleman Advances New Courthouse Through Public-Private Partnership

Howard County Executive Allan Kittleman has pre-filed a resolution asking the county council to support the construction of a new Circuit Courthouse through an innovative public-private partnership (P3). Delivering the estimated $138.7 million project through a hybrid P3 option was given unanimous support by the Spending Affordability Advisory Committee at a meeting in January.

The proposed hybrid P3 would blend public and private financing. A private consortium selected through competitive bidding would be responsible for the design, construction, operation and maintenance of the new courthouse for 30 years. This financing and delivery approach is expected to benefit the county in the long run with its ability to share risks, lower costs, gain efficiency and keep the building in good condition. The project would be built on property the county currently owns on Bendix Road. The existing Thomas Dorsey Building would be demolished. The county estimates the new facility would require 227,000 square feet of space and parking for 600 vehicles.

In the existing courthouse, prisoners, judges, court staff, the public and opposing parties in highly contentious matters (such as child custody cases) often are required to share hallways and other common areas. The courthouse cannot adequately accommodate security needs or the technology infrastructure to meet state requirements for electronic filing. While the state has already authorized a sixth judge for Howard County, the courthouse has no space for an additional judge and support staff.

“The existing Circuit Courthouse is 174 years old. Despite multiple renovations, it can no longer be updated to compensate for its limitations,” said Kittleman. “A new courthouse has been discussed and delayed for nearly 20 years, and it’s badly needed, but we also have to balance our priorities of education, public safety, infrastructure and community services. That is why we needed an innovative solution to fund the courthouse, without impacting our ability to address those priorities. This public-private partnership is the most efficient and effective way to deliver a modern facility at the best value to our taxpayers in the long run.”

HCC Alleviates Parking Challenges With New Garage

After one year of construction, a new, 736-space expansion of Howard Community College’s (HCC) existing East Garage has opened, just in time for the start of the spring semester. This marked the successful completion of a $16.4 million project that began planning in the summer of 2012, with major construction commencing in February 2016.

HCC contributed $6 million toward the project, with $2.7 million coming from Howard County. Additional funding comes from a $7.7 million bond sale, which is supported by the county, and will be repaid to the county from student fees.

Among the features of the new garage are a new access road directly from Little Patuxent Parkway to help alleviate congestion and delays entering campus and to promote more efficient access to parking. The garage also has a covered pedestrian bridge for safe access from the garage to the campus.

The original East Garage opened in 2006 with 518 spaces, while the college’s 723-space West Garage opened in 2011; the expansion has more parking spaces than what was available at the off-campus satellite parking lots, so the college no longer uses these locations and has discontinued the shuttle. According to its facilities master plan, the college has planned another parking garage for construction in 2025, depending on budget funding and future campus needs.

Howard Councilmen Intro Legal Action Against FAA for BWI Noise Impacts

Howard County Council Chair Jon Weinstein and Vice-Chair Calvin Ball introduced Council Bill 8-2017 authorizing the Howard County Office of Law to take legal action against the Federal Aviation Administration (FAA) related to the implementation of the NextGen system.

The NextGen satellite-based air control system was launched at BWI Thurgood Marshall Airport in April 2015 and, since, planes have been taking off in more concentrated areas and turning at lower altitudes, resulting in a significant increase in aircraft noise in Elkridge, Hanover and parts of Columbia. The satellite technology is designed to cut down on flight times, reduce fuel consumption, reduce emissions and pollution and deliver savings to the airline industry.

The bill alleges that the FAA failed to appropriately consider the significant environmental impact of NextGen and acted arbitrarily in issuing its Finding of No Significant Impact under the National Environmental Protection Act. In addition to BWI Marshall, increased noise complaints resulting from implementing NextGen technology have been reported near airports in Boston, San Francisco, San Jose, Santa Cruz, Phoenix and New York.

“For nearly two years, all attempts to work constructively with the Maryland Aviation Administration (MAA) and FAA have been virtually ignored,” Weinstein said. “I share our constituents’ deep frustration, and I am extremely disappointed at the FAA’s complete lack of action. Their lack of communication with us since our July meeting is unacceptable and has left us with no option other than to demand legal action and a formal Congressional inquiry.”

Numbers released by BWI Marshall reveal that the airport received 835 noise complaints in 2014; in 2015, that number jumped to 1,849, an increase of 121%.

SBA to Launch $1.2 Million Aspire Challenge

The U.S. Small Business Administration (SBA) recently announced the Aspire Challenge, a prize competition of up to $1.2 million to expand access to entrepreneurial education and microloans for formerly incarcerated individuals. The competition will make up to 16 awards of $75,000 to organizations across the nation to assist in delivering entrepreneurial training and microloan assistance to formerly incarcerated individuals.

Aspire builds on Aspire Entrepreneurship Initiative, a public-private partnership announced in August between SBA, W.K. Kellogg Foundation and microlender Justine Petersen. The pilot connects the formerly incarcerated to entrepreneurial training, education and microloans focusing on those who are parents. The pilot began in Detroit, Chicago, Louisville and St. Louis.

“Sixty percent of formerly incarcerated individuals remain unemployed one year after release,” said SBA mid-Atlantic regional administrator Natalia Olson-Urtecho. “Self-employment must be seen as a viable alternative, and the Aspire Challenge leverages entrepreneurship as a tool to increase economic mobility.”

SBA will award the prizes through the online competition platform www.challenge.gov. The competition is open to all for-profit and nonprofit entities and organizations with an account in the System for Award Management (SAM). The submission ends Feb. 12; the SBA anticipates winners will be announced by March 14.

Millworks Business Resource Center Opens in Downtown Ellicott City

The Howard County Economic Development Authority (HCEDA) has opened the door on Millworks, a new business resource center and co-working space on Main Street Ellicott City, so named for the town’s legacy as a mill town. The center, located at 8098 Main Street, will provide a central location for businesses and property owners to gain access to business and recovery resources.

Organizations participating in the center include the HCEDA, Small Business Administration, Small Business Development Center, Maryland Department of Housing & Community Development, Preservation Maryland, One EC Recovery Project and the Ellicott City Partnership (ECP).

Co-working space and free Wi-Fi will be made available during business hours for individuals looking for a place to work for the day, along with space for special events and training. “We want this to be a place for the community,” said HCEDA CEO Larry Twele. “We want people to come into Ellicott City often to see what is going on here and to be a part of the rebuilding process.”

Two additional offices on the upper floor will be leased for business use. The ECP will take over one of the spaces; the other will be occupied by NextLOGiK, a resident company at the Maryland Center for Entrepreneurship, which will be using the space as an additional location outside the incubator.

BGE Economic Impact Exceeded $5B in 2015

BGE, one of the 25 largest private employers in Maryland with 3,200 employees, had an estimated economic impact of $5 billion of output, supported more than 9,500 jobs and produced more than $920 million in labor income in the company’s service area during 2015, according to the Economic Alliance of Greater Baltimore (EAGB).

BGE’s total economic impact is comparable to the output of entire industries in its service area, such as legal services, employment services, and retail food and beverage. EAGB analyzed BGE’s 2015 general operations and measured the direct, indirect and induced economic impact using the IMPLAN economic impact model.

Based on 2015 data, EAGB found that BGE’s ongoing energy management programs and charitable giving have a positive economic impact on its communities.

• Energy management programs had an estimated economic impact of more than $227 million of output, nearly 800 jobs and nearly $50 million in labor income. BGE customers also saw more than $92 million in savings through these programs.

• Charitable contributions of $4.5 million supported approximately $8 million of output and $2 million in labor income.

In addition, the company’s Smart Energy Economic Development (SEED) Program has approved incentives for 23 businesses which are expected to contribute to the addition of more than 3,200 new jobs in Maryland. New and expanding businesses creating new, full-time employment can qualify for SEED discounts on natural gas and electric connection and usage costs.

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