Friday, February 14, 2014


Some refreshingly-candid commentary on Montgomery County's massive energy taxes, and weak market for office space, was delivered Tuesday by Charles Nulsen, president of Bethesda's Washington Property Company. Nulsen was testifying before the Montgomery County Council, on a slew of new energy and environmental requirements that would impact residents and businesses countywide.

But some of his more general testimony on the current economic development climate in the county jumped out. I recall being in the audience at a council hearing three years ago, and hearing the testimony of the county chamber of commerce regarding job creation. When the statistic of the low number of jobs created in MoCo was contrasted with Fairfax County's number - many times that of Montgomery's during the same period - there was an audible gasp in the room. Listening to Nulsen's testimony, those who might have tuned out local economic matters could quickly understand why we are behind.

Nulsen testified that Montgomery County businesses' utility bills are 30% higher than those in DC or Northern Virginia. He said the county currently "collects more for the distribution of electricity than Pepco itself." In addition to our tremendous traffic congestion (due to the failure to complete our master plan highways), lack of access to Dulles Airport, and high tax burden, these disparities hardly make MoCo the easy choice for large employers seeking to relocate.

That impact is felt in the county's weak office market. The vacant office space in Bethesda, Rockville, Silver Spring and Wheaton speaks for itself. With no large employer moving to the county in a decade, developers are abandoning planned office space countywide. We were told that "smart growth" would allow people to "live where they work." The factual evidence suggests otherwise: Office space planned for "smart growth" communities such as Clarksburg and King Farm is being abandoned, or converted to residential. An office building in downtown Wheaton was recently flipped to residential, as well. Ultimately, the "smart growth" has actually led to more traffic congestion and sprawl, as we are ending up with more residential than was even planned. And all of those additional residents are going to commute in to the usual downtown DC and VA employment centers.

Nulsen said his own office properties have a 25% vacancy rate, and that "our commercial tenant base is dwindling." He added that he has had difficulty attracting office tenants for a decade. I would point out that that coincides directly with the lack of major firms relocating to the county over the same time period. With a dwindling tax base, and surging population, the county's current economic trajectory is "unsustainable," Nulsen argued.

"We have an A- grade in environmental stewardship. We have an F in economic stewardship," was Nulsen's assessment of where Montgomery County stands at present.


Anonymous said...

1. The office market is weak everywhere in the area.

2. Perhaps there are more important things to the folks of Montgomery County (who, by and large, are still doing very well) than tax breaks for major corporations and looking the other way when there are better environmental options out there.

3. Sprawl is the folks who drive from Gaithersburg, Frederick and farther every day to NIH/Walter Reed. Sprawl is the folks who drive from Columbia down New Hampshire Avenue to D.C. Sprawl is not more housing in established Metro areas such as Bethesda or Wheaton.

Anonymous said...

This is what makes comparisons between Tysons and White Flint laughable until White Flint starts to get anywhere near the number of major corporations as Tysons has headquarted there.

Robert Dyer said...

1. Actually, DC had the lowest vacancy rate in America last year, then slipped to No. 2, but still significantly lower than the MD suburbs' rate.

2. Maybe folks in Potomac are doing well, but we're talking about the whole county here. You know, the one where poverty has skyrocketed over the last 8 years? The latest stats don't reflect your assessment.

3. You're correct that new housing in downtown Bethesda is not sprawl. High-density development in Wheaton, Science City, White Flint, etc. is sprawl. We were told King Farm + Clarksburg were "smart growth." We were lied to - it's sprawl. Bedroom communities + urbanization = sprawl.

4. I'm assuming you oppose the $72 million tax break for developers in White Flint, then?

Robert Dyer said...

Yes. White Flint has attracted zero large corporations so far.

Anonymous said...

Not everyone is doing as well as you may think in the county.

Manna Food Center reports that there are many people in our community who must make choices everyday between having enough to eat and buying the medicine they need. Others find they must choose between paying utility bills or grocery bills.

One in three students attending Montgomery County Public Schools qualifies for a free or reduced price lunch (32.3%). This is a true indication of the poverty that exists in our community.

Robert Dyer said...

And the number of residents who qualify for the Supplemental Nutrition Assistance Program has exploded since 2006 here. The myth that everyone in Montgomery County is rich is just that - a myth. It's the less fortunate who are being thrown out of their homes in the massive sprawl redevelopment of Wheaton, Glenmont, etc. It's a disgrace.

Anonymous said...

King Farm and Clarksburg are both hoping to have some kind of rapid transit system that was 20 years off 10 years ago and is still 20 or more years off. Even if built, it would be a very, very long ride from Clarksburg to Bethesda or DC.

Anonymous said...

I was thinking more Kentlands than King Farm actually. The Kentlands was supposed to be the greatest new urbanist thing since sliced bread but I think now everyone realizes it wasn't. The Corridor Cities Transitway is still 20 years off and it may never be built.

Anonymous said...

Funniest thing was King Farm residents were up in arms in recent years about allowing the CCT to go through the planned right of way.

The community was built with the CCT in mind, but 15 years later people are surprised.

Anonymous said...

I lived for 10 years in Germantown & Gaithersburg, eagerly awaiting the CCT as my solution to traffic. 5 years on that's no closer to reality. I also found that any one who could afford it sent their kids to private school at least for elementary, sending those subsidized lunch numbers soaring. We moved to Bethesda 5 years ago largely because of traffic and schools. Neighborhoods in the upcounty lose their sheen very quickly and become rental units for the less affluent as their owners trader up to bigger houses.

Robert Dyer said...

The CCT is an interesting issue because A) As several of you have mentioned, it has been delayed B) If it ever becomes reality, its new incarnation as BRT will be totally ineffective. 50 minutes from Clarksburg to Shady Grove? Who's going to sit through that. There's an existing bus line between Germantown and Shady Grove Metro that makes the trip faster! It won't run in snow because it will be canceled like all other buses. Light rail is better in every way, more cost efficient, and draws higher ridership.