Home Archived Articles Q&A With MBRG President Scott Dorsey

Q&A With MBRG President Scott Dorsey

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The chairman and CEO of Merritt Properties, Scott Dorsey, is a rarity in today’s business world: an executive who’s spent his entire career with one company since coming on board, in his case, in 1972.

With his focus on Merritt’s strategic planning and long-term goals, Dorsey remains involved with the day-to-day operations of the business, while serving as the company’s point person with financial institutions, government agencies, economic development organizations and industry groups — such as Maryland Business for Responsive Government (MBRG), where he’s served as chairman since mid-2014.

That latest role is in addition to his service on the boards of the Maryland Economic Development Corp;, the Economic Alliance of Greater Baltimore and Young Life-Urban Baltimore, as well as sitting on M&T Bank’s Greater Baltimore/Washington Directors Advisory Council, the Baltimore County Economic Development Commission, Baltimore County Public Schools Superintendent’s Business Advisory Council, the McDonogh School Board of Trustees, and the Board of Trustees for Junior Achievement of Central Maryland.

Dorsey is also an active member with the National Association of Industrial and Office Properties, the Institute of Real Estate Management and the Urban Land Institute. He received a Bachelor of Arts from Cornell University and an MBA from Loyola University in Maryland.

How do you foresee Fort Meade generating greater demand for office and retail space around the area?

The key will be the extent to which we can develop commercial applications for the technology developed for the [Department of Defense]/cybersecurity market. This is about driving the economy, similar to the way the development of the space program in the ’60s spurred the computer industry.

Last year’s Sony cyberattack by North Korea demonstrated just how vulnerable we are. To tap its full potential, we have to take advantage of not only the growth in government contracts, but the potential for technological growth from its commercial applications.

The BWI office submarket has been slow in recent years. Do you think the activity generated by the cyber industry will equate to more demand for space?

I do, and it has, but the potential for very significant job growth will be due to developing commercial applications.

Much of the product in the BWI submarket consists of older buildings. Do you foresee a great deal of repurposing of product occurring in the coming years?

Yes and I think you’ll see that throughout the region, as we already have in Hunt Valley. Greenfield development is becoming less of an option, especially when municipalities prohibit the extension of infrastructure. As a result, ’80s era office space is a prime candidate for redevelopment.

Local real estate executive Mitch Weber, of Heffner & Weber, is again starting to talk about developing the much-discussed Aerotropolis, which would rise around BWI Thurgood Marshall Airport. What are your thoughts on that topic?

First, I would say that the location of this property, adjacent to the MARC station, between Route 170 and Baltimore-Washington Parkway, is the best site in the state for transit-oriented development, given the road network and access to BWI Marshall.

Building across the Amtrak right-of-way and connecting the property on both sides of the tracks provides tremendous opportunity for exciting new commercial and residential development. I also think it would be important to redevelop the MARC station. Right now, we don’t have many options, aside from the candy and soda machines. I think we can do something similar to what we’ve done in the airport, with a food court and other concessions, in the train station.

What about the office market in general, with more people working at home?

There are two schools of thought here. Collaboration occurs best when people are working together, face to face, having conversations. That’s why when Marissa Meyer took over as CEO of Yahoo, she required everyone to work in the office.

Still, we are seeing more people working at home. Also, workers today often have only a desk as a work station, as opposed to an office or cubicle, so there has been a reduction in square feet per employee.

What was your biggest takeaway from working with the founder of Merritt Properties, Leroy Merritt?

The reason that he had such phenomenal success was the way he connected with others. It seemed that everybody was his friend. It was his relationships with people that mattered to him, rather the bottom line. That philosophy — valuing people — was most important at Merritt in 1972, and it’s true today, even though we lost Leroy in 2010.

What can Gov. Larry Hogan’s administration do to improve Maryland’s image within the business world?

I think they’re off to a good start. Many of the questions that arose in the Augustine Report are being addressed, and the Department of Business and Economic Development, under its new secretary, Mike Gill, will have an expanded role, coordinating with every department on matters important to business development.

I think for the Hogan administration to continue to make progress, we need to get our story out to the national and international markets. I believe the 2016 legislative session will be critical, as it will focus more on tax policy and regulation. It will be important for the administration and legislature to work together to develop a reputation as being open for business.

Various organizations, like Forbes magazine (18th), the American Legislative Exchange Council (34th), the Tax Foundation (41st) and Site Selection Magazine (bottom half) have offered negative assessments of the business climate in Maryland. Still, Gill has stated that he and Hogan want Maryland to be in the Top 10 of any list of great states to run a business in. How can they work with the legislature to make that happen?

It’s a tremendous goal to shoot for the Top 10, but it will take more than a marketing effort. We need to look at our tax policy, not only for corporate income tax rates, but even more importantly, personal income tax rates, and also the estate taxes, which discourage people and companies from moving to, or staying in, Maryland.

We need to look at best practices in the states that are doing well. Maryland should be a star — one of the best places in the country to do business — but we are not close to reaching our potential, given the assets that we enjoy.

How do you think the recent riots in Baltimore will influence businesspeople to locate (or not) in the city?

I see enormous opportunity in the Baltimore region. If Maryland is successful in creating significant job growth, we will create more opportunity and hope for people in economically disadvantaged neighborhoods. Economic inequality has led to enormous frustration, which was evident in the recent events, for which the tragic death of Freddie Gray was the catalyst. The solution will require fostering trust and a real dialogue between religious and political leaders, as well as the police and business communities.

The future of the city, and the region, will depend on how we respond, finding solutions. If we get real engagement from various civic, political and business leaders, Baltimore will proceed without missing a beat, stronger than ever.

What are your thoughts on increasing the minimum wage?

While it feels like the right thing to do — to pay hard workers more money — unfortunately, there is much evidence that, while it increases wages for some, it causes job losses for others.

If business owners have to pay more for labor, they may also have to reduce the number of workers they’re hiring and opt for labor-saving (thus more affordable) technology. Stephen Fuller of George Mason University has released a study that indicated that raising minimum wage doesn’t always help; it was intended to be a starting point in a new job, not support for a family. These jobs provide the opportunity for students and senior citizens to supplement their incomes.

The way to deal with this issue is to expand the economy. I believe in free enterprise and competition. These policies have created the strongest, most prosperous society in history, providing people with the most opportunity.

What do you think about the implementation, thus far, of the Affordable Care Act (ACA)?

I think it’s been a disaster. There were some issues with portability of insurance and pre-existing conditions, but the Obama administration blew up a system that really just needed some tweaking.

The ACA has not resulted in any of the benefits that were suggested it would provide, and the cost of insurance has gone up for many people, though some people who didn’t have coverage have been insured. I don’t know if it’s possible to repeal it, but I’d be in favor of that.

Do you think Maryland could use more incubators, or are we at a point where we have enough?

I think they are a very good thing. We also need to address providing affordable office space with more modest economic commitments for rapidly growing companies than the usual lease terms of five years or more that most landlords require for companies that outgrow the incubators.

What were your feelings at the end of the 2015 legislative session?

I think many of us felt pretty good. The pro-business agenda and the approval of the preliminary recommendations of the Augustine Commission were encouraging. With a new administration, and many new legislators, not many significant initiatives were introduced this year. I think the next session will be more meaningful and important, with much discussion about tax and regulatory policies, which are key to growing the economy.

On that note, right-to-work states tend to have more economic growth and more jobs. That’s a hard conversation to have in Maryland. It seems that there has been a reluctance even to discuss policies that would create more economic opportunity for everyone. We should, at the very least, have a conversation about regional right-to-work legislation, possibly for the Eastern Shore, Western Maryland or other areas.

We need to have a real dialogue. I know that our political leaders want the best for Maryland. We have to take the politics and the emotion out of the process and try to get the results that we all want.