Among the many phrases said about this amazing community volunteer is that “She’s every where! She’s every where!”

One of the things I like best about living and working in Frederick County is the rich tradition in the business community of serving those in need.

Frederick’s charitable organizations do a lot of heavy lifting—educating children, healing the sick, training the jobless, nurturing the arts, caring for the elderly—and countless other services so critical to the quality of life here in Frederick.  Nurturing and guiding nonprofits is such a fulfilling and effective way to leave a lasting imprint on a community.

There are numerous awards and civic honors dedicated to recognizing outstanding Frederick volunteers, but my favorite is the “Good Samaritan of the Year”, the highest honor awarded by Frederick Memorial Hospital. Each year FMH recognizes “deserving individuals for their generosity to FMH, as well as their selfless commitment to improving the quality of life in the entire Frederick community.”

It came as no surprise to me that FMH named Karlys Kline as the 2011 Good Samaritan of the Year. Her outstanding generosity to the nonprofit community sets her apart, even in a place like Frederick where service to people in need is standard practice.

This quote from FMH’s Facebook page says it all:  “Her giving spirit is evident in every aspect of her life, from her public involvement to her relationships with friends and acquaintances. Her smile and tireless enthusiasm for life are contagious; she can make a person feel good just by being around her. All this comes with a humility and genuineness that is rare to find in an individual.”

You can check out all the details about Karlys and her richly-deserved award on the Want2Dish website.

Congratulations, Karlys! Frederick County is blessed to have you.

Rocky Mackintosh served on the Board of Directors of Frederick Memorial Hospital for nine years, during which time he served as Chairman of the Board for three years, and Development Council Chairman for three years. He still volunteers actively with a variety of Frederick charitable and civic organizations, but remembers FMH fondly as “the hardest work I ever did in my life and the most rewarding.”

Capital gains taxes on real estate transactions could increase by as much as 8.8% in 2013!

Contemplating the sale of a tract of land, commercial real estate, or even a personal residence?

A property owner may want to consider taking action sooner rather than later.

There are two changes on the horizon that could significantly impact profits on residential, Land and Commercial Real Estate transactions: new Medicare surtaxes and the expiration of the Bush tax cuts.

The Patient Protection and Affordable Care Act (PPACA) (a.k.a. Obamacare) has been front and center in the news for the past couple of years since it became law in March of 2010.   Buried within the nearly 1,000 page document are any number of regulations and new taxes … more than one can imagine.

The good or bad news (depending on one’s perspective) is that over the last two years the grim truth about PPACA has been surfacing, as former Speaker of the House Nancy Pelosi revealed in her now infamous statement, “You have to pass the bill so you can find out what’s in it!”

Consider Section 1411 of the bill, where the Medicare surtax is addressed.

What does the healthcare bill have to do with real estate, one may ask?

For the first time, a 3.8% Medicare payroll tax will be applied to investment income — including rents and net gains from disposition of Real Estate – of single taxpayers with adjusted gross income (AGI) above $200,000 and joint filers over $250,000. 

One may think that this only impacts the very wealthy … It may be worth taking another look.  Consider the small farmer or investor living on a meager income, but sells a tract of land or building that yields a capital gain of over $200,000.  Is such a sale subject to the 3.8% tax?

Perform a Google search “The 3.8% Tax: Real Estate Scenarios & Examples” to find a detailed informational brochure available from the National Association of REALTORS® (NAR) that lays out helpful scenarios calculating Medicare surplus taxes on a variety of real estate transactions.

According to NAR, “This new tax was never introduced, discussed or reviewed until just hours before the final debate on the massive health care legislation began.”

And that’s not all.  The healthcare reform legislation also imposes an additional 0.9% hospital insurance (HI) tax on wages in excess of $250,000 for married taxpayers filing jointly and $200,000 for single taxpayers.

Assuming the Supreme Court doesn’t reject Obamacare in its entirety, both of these taxes take effect in 2013.  Taxpayers in the highest brackets could see income tax increases of as much as 4.7% due to the PPACA legislation!

The other grim reaper lurking in the shadows is the fast-approaching expiration of the Bush-era tax cuts.  If those tax cuts expire at the end of this year, capital gains tax rates generally will increase from 15% to 20% (0% to 10% for lower-income).  This increase affects all taxpayers, including small businesses.

“The bulk of these changes will affect individuals, but they will also have a major impact on businesses,” said Jennifer Fair, a CPA with McLean, Koehler, Sparks and Hammond.  “In particular, the highest income tax rate on individuals will increase to 39.6% percent, which is 4.6 percentage points higher than the highest tax rate on corporations. Therefore, although there has been a move in recent years toward pass-through entities, such as LLCs, the C corporation may again come back into favor as individual rates are increased.”

“We don’t expect any legislation on these tax cuts to be passed until after the election,” continued Fair.  “We are planning as if they are expiring, until we hear otherwise.  It is possible the legislation could be passed as late as early 2013 and made retroactive.”

So what is the bottom line of all of these tax increases in the pipeline?

A real estate seller could be facing a combined increase in capital gains taxes of 8.8% next year!

“If all of this hits at the same time, it could send shivers up people’s spines,” said Bill Castelli, Vice President of Government Affairs with the Maryland Association of REALTORS®.  “It’s not clear what is going to happen in Congress.  On one hand, Republicans want to hold out to extend the Bush tax credits, but they have to pass something.  The election results will have a role to play in this, and the economy will have a role to play.  If the economy doesn’t pick up so revenues can fund some of the deficit, it gives Congress less of a choice.”

So what’s a seller of Land and Commercial Real Estate to do?

Sell that property before 2013.  That’s the only sure way to avoid these taxes.

If that is just not practical, one may choose to wait (for what could be several years) for a more robust real estate market, it is highly recommended that one find a competent accountant or financial planner to help with capital gains planning.  Tax planning strategies (including reporting capital gains on the sale of property on an installment basis) can help reduce or defer capital gains income

An additional thank you goes out to Catharine Fairley, CPA and Principal at Draper & McGinley, PA for her guidance and expertise in providing information for this article.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes for TheTentacle.com and Want2Dish.com.

High vacancy rates have created a renter’s market for Frederick office space.

In our last post, MacRo Report shared an overview of the 1Q 2012 performance of the U.S. commercial office market and broke out some statistics for Frederick. Although vacancy rates for Frederick area office spaces have begun to tick down, and small businesses are coming back into the market, commercial lease rates in this area continue on a downward trend. We spoke with Rusty McCabe, Assistant Vice President at McShea & Company, about the near-term outlook for Frederick’s office market.

MacRo: Costar reported this past quarter that small businesses are back in the commercial office market across the nation. Are you seeing that trend in Frederick as well?

McCabe: Definitely. Most lease deals we have done for the past couple of years are smaller deals, under 5,000 sq. ft. and in the $2000-3000 per month range of rent mostly. And during the past couple of months the little guys are really coming out, those in the 2,500-3,000 sq. ft. range.

Now that vacancy rates are starting to drop, are rents rising in this region?

Right now there is a lot of downward pressure on lease rates. You have got to be competitive if you want to make a deal. The only larger tenant deals we are seeing now in Frederick are lease renewals. In most of those cases, the tenant will tour the market, get leverage, and go back to the landlord asking for a better deal. Tenants are finding good deals now, spaces that were going for $26.50 a couple of years ago are now $20 and under.

What is putting so much pressure on lease rates in Frederick?

Frederick vacancy rates are still fairly high [nearly 16%].  A more healthy vacancy rate for Frederick is between 12-10%. Also, businesses are starting to look at flex space as an alternative to traditional office buildings, because flex is $2-3 sq. ft. cheaper in price. St. John Properties, which has about 200,000 sq. ft. of empty flex space sitting on the market in Frederick, has recently become a lot more aggressive and responsive in making deals. A number of tenants are getting quotes from St. John to use as leverage when they renegotiate leases with their current landlords.

Is shadow space still a drag on the Frederick market?

Definitely. We recently saw a large tenant in Frederick with a 3-year lease on nearly 10,000 square feet of Class A office space come to the landlord asking to downsize to the best half of that space, and asking that the $60,000 in retro-fit costs be covered by the landlord. Where lease renewals are concerned, tenants are in the driver’s seat right now. Many need to downsize because of the economy, and they are coming to landlords to ask “do you want to keep me?” Landlords need to renegotiate lease terms in this market to keep tenants; 90% of the time when they renegotiate they keep the tenant.

Costar also reported that there is currently a severe shortage of small office spaces under 10,000 sq. ft. in D.C. and Bethesda because so many smaller businesses have entered the market there. Will that trickle up to Frederick and impact the market here?

Increased activity in D.C.’s office market has been a rent driver for the Frederick in the past, and eventually we will see smaller tenants forced to come north to find office space.

And in terms of larger businesses, companies will start to look north to relocate to cheaper spaces located closer to where their employees are living—this seems to happen in cycles every five years or so. Frederick has very little Class A office space, really only five or six buildings, so it won’t take much activity to put upward pressure on Class A rents in Frederick.

However, office vacancies in Gaithersburg are at about 30%. I own a building near the Kentlands that had a law firm as the sole tenant. When the firm needed to move to expand, my partner and I eventually found five smaller tenants to replace it. Recently, some of our tenants renegotiated their monthly rents down 50%, because that is all the market will bear right now.

Until office lease rates start rising in northern Montgomery County, we won’t see much business migration from the D.C. region to Frederick. There isn’t a significant enough difference right now between prices per square foot in Frederick versus Montgomery County.

Rusty McCabe is Assistant Vice President of Leasing and Sales for McShea & Company, Inc.  McShea is a privately owned, full-service real estate services company founded in 1983 and operating throughout the Washington metropolitan area.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

Small businesses are back, and Frederick is poised with a healthy inventory of small office space!

Costar Group, the nation’s leading provider of commercial real estate trends and intelligence, recently reported 1st quarter 2012 statistics for the nation’s office market.  For the most part, the news was good:

• The U.S. saw significant conversions of temporary employees to permanent ones
• Corporate profits are still at record high levels
• Job growth was primarily in office jobs, versus manufacturing jobs
• Overall office vacancies are declining nationwide, currently standing at 12.7%
• Short supply of new commercial office space in the development pipeline indicates that vacancies will continue to decline
• The office market is nearing a tipping point for rent growth

CoStar also noted some interesting trends in commercial office space rental during the first quarter of 2012:

Small businesses are back!  Leasing of small spaces (less than 2,000 square feet) dominated activity during the first quarter.  In fact, there is currently a SEVERE shortage of office spaces less than 10,000 square feet in size in the Washington D.C./Northern Virginia/Montgomery County market. Rents on those spaces are starting to rise.

Best liquidity is in the mid-range of office space size.  Nearly half of the U.S. commercial tenant base is working in spaces 2,000-20,000 square feet in size.  So developers and investors take note:  buildings offering space in this size range are currently experiencing the highest overall demand.

Overall, tenant square footage is shrinking.  For Class B and C office spaces, tenants decreased the amount of square footage they leased.  Class A spaces, however, saw an increase in overall square footage leased during the past quarter.  (Good news for prime commercial buildings like South Market Center on Carroll Creek!)

After hearing all of that good news, we at MacRo eagerly dug into CoStar’s 1Q 2012 Office Market report for Frederick, and ran some reports using the CoStar database to analyze Frederick vacancies:

• Office vacancy rates in Frederick have declined to 15.4%, from a peak of 16.2% in 2011.  This compares to 13.5% in Washington, D.C. and 15.5% in Rockville/Germantown.  Bethesda’s office market is red hot, with a vacancy rate of just 9.4%!
• Nearly 80% of Frederick’s office vacancies are less than 10,000 square feet in size.  The D.C. metro area may be experiencing a shortage of office space under 10,000 sq. ft., but Frederick still has a healthy (ahem) inventory.
• Over 55% of the lease transactions in Frederick during the first quarter of 2012 and all of 2011 were for office spaces under 2,000 sq. ft.  When you take into account that 92% of all transactions for 2011 were for space less than 10,000 sq. ft., it does appear that most of Frederick’s office lease transactions for the past year have been for small to moderately-sized spaces.
• The top two office lease transactions year to date:
  • 15 Worman’s Mill Court   Pathology Associates renewed a lease for 35,000 sq. ft.
  • 7211 Bank Court Drive  Frederick Memorial Hospital signed a lease for 30,000 sq. ft. with a move-in date set for June of 2012

So what is the near-term outlook for the improvement of Frederick’s office market?

Well, if your business has outgrown its current space, or you need to trade that basement office for something more professional, now is the time.  On Thursday we’ll share our conversations with local Frederick commercial real estate brokers and investors, who report that the pressure of high office inventories and the prolonged recession has created a buyer’s (and leaser’s) market for Frederick office space.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

2011 showed gains in the development and construction of office, industrial and retail buildings. That was the first year since our recession began in 2007 that there were improvements in the commercial real estate development and construction market. “The total economic impact of the development (pre-construction, construction and post-construction) of commercial real estate during 2011 added $261.6 billion to the GDP, compared to $231.7 billion in 2010, a 13 percent increase, according to the report. Construction spending on commercial real estate totaled $92.3 billion, a more than 12 percent increase over 2010. This spending supported nearly 2 million jobs nationally.” Hopefully, commercial real estate development and construction will continue to improve throughout this year.

Excerpt taken from Market Watch: Commercial Real Estate Development and Construction Rebounds in 2011 Released 5/1/12

Is Maryland’s Lend Local Act enough to loosen small business commercial credit?

Most people think of It’s a Wonderful Life as one of the greatest, if not the greatest, Christmas movies ever filmed.

It also happens to be just about the best P.R. that local community banking has ever received. If anyone, anywhere, has ever done a better job of highlighting the direct impact that actively engaged “relationship bankers” have on the economic well-being of the communities they serve, please share it.

Ben Bernanke himself asserts that not one of the “too big to fail” banking institutions has an algorithm sophisticated enough to match the “in-depth local knowledge that community banks use to assess character and conditions when making credit decisions. This advantage for community banks is fundamental to their effectiveness.”

Of the few Frederick-area businessmen and women who came to the Weinberg Center for last week’s town hall meeting of Maryland’s Small Business Commission, a significant number claimed “trouble getting loans” as their most pressing issue. This isn’t unique to Frederick. All over Maryland, businesses owners are frustrated by the lack of “affordable and reliable credit” needed to grow their businesses.

Large institutional banks have tightened credit so much since the recession they may well find themselves the subject of an upcoming episode of Hoarders. (This is a great show to watch if you need motivation to clean out your garage. Or anything else, for that matter.)

Early in April, along with co-sponsor Senator Ron Young, the Maryland Senate passed Senate Bill 792 – Lend Local Act of 2012, which was subsequently signed into law effective July 1, 2012.  Simply put, the State of Maryland promises to use local banks for $50 million worth of deposits in return for those deposits being lent to small businesses at below-market interest rates. A loosening of the credit supply would go a long way toward overcoming some of the regulatory hurdles that Maryland business owners face.

However, $50 million across the entire state of Maryland doesn’t go as far as it may seem.  Not only that, but in speaking with one local community bank executive, who stated that he is “intimately” familiar with the legislation, it seems there is not that much enthusiasm for programs that involve government deposits.  ”We struggle with enough government red tape as it is,” he said, “and frankly such deposits are just not that dependable” when one factors politics in to the equation.

No question that several of Frederick’s large and small banks have taken serious hits on commercial loans and real estate used as collateral. But while real estate values continue to be a drag on balance sheets throughout the banking industry, local banks have come through this crisis in much better shape than most of their large institutional competitors.

It shouldn’t take an act of legislature to encourage Maryland to use local banks for state deposits. It seems common sense to infuse local lenders with capital when they are in such a great position to jump start our business communities out of this recession. And now is the time many major businesses that survived the recession are reporting record profits, and are crying out for capital to expand.

Smaller businesses are beginning to see the trickle-down effect and face the same needs for capital, as the Small Business Commission representatives admitted they hear over and over.

MacRo Report noted in a previous post that some economists are predicting the recovery from this recession will be regional, with states and communities led by fiscally responsible governments seeing the strongest (and longest lasting) improvements.

Frederick is uniquely situated in Maryland, and is poised on the brink of some exciting new development projects that will provide growth opportunities for new and existing businesses alike. There are any number of Washington and Baltimore developers who are beside themselves at the potential they see in Frederick’s future, and are drooling over the opportunity to get involved somehow.

It would be better for Frederick on many levels if the capital to finance these projects is provided locally. This is an instance where Frederick County’s “small town” culture can be leveraged—it’s certainly easier for our local banks to weigh risks and rewards of commercial lending in a business community as intimate as Frederick County. And keeping the money in town means Frederick keeps some control of its own destiny.

But can Lend Local really make enough of a difference? While it’s always refreshing to see Maryland trying to be part of the solution, the best thing O’Malley can do is move quickly to untangle the mess of taxes and regulations that discourage business in this state. Otherwise Maryland communities are destined to play Potterville to Virginia’s Bedford Falls.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

With the November 2012 general election just about six months away, the Charter Board is putting the finishing touches on the draft of a new constitution for Frederick County.

As most of our citizens know, since its establishment in 1748, Frederick County has operated under the County Commissioner form of government.  For the twelve Charter Board members appointed by the current administration of the Frederick County Board of County Commissioners in March of 2011, the countless hours of dedicated effort to draft this proposed constitution is about to end.

However, that does not mean that they will be packing their briefcases and heading home in wait for the election.  The next phase of the Board’s work will entail educating the public on the benefits of making the shift from the current County Commissioner form of government to Charter Home Rule.

The benefits of such a change have been expounded upon at length within the posts of the MacRo Report Blog since its inception two years ago, so this post will not dwell on the “Why’s” of charter government.

Instead I want to focus in on the “What” that is being baked in to this new document, which will be on the November ballot for the voters of Frederick County to accept or decline.

It is the hope of the Charter Board that Frederick County’s government will shift from a committee form of rule to one with a balanced executive and legislative branch that provides more autonomy from state legislature control.  Here are the key components found in the latest draft version of the proposed Charter:

A.  County Council:

1. This will be the legislative arm of county government.  This seven-member body will pass the laws that the County Executive will be charged with carrying out.
2. These seven Frederick County residents will be divided into two groups.  There will be five members, each elected from one of five legislative county districts, and two others known as “At Large” members, who will be elected by the voters county wide.
3. These members will be elected to serve no more than three consecutive four-year terms.
4. The Council will only be allowed to act as a body and will have no power to create standing committees or delegate its functions and duties to smaller groups of its members.
5. The Council will not be allowed to interfere with the day-to-day functions of the County Executive.  They cannot appoint, dismiss or direct any employee of the Executive branch.
6. The County Council will essentially be a part-time body that is not allowed to “sit for more than forty-five (45) days in a calendar year for the purpose of enacting legislation.”
7. Compensation for the council members will be established by the Charter Board, and is expected to be considerably less than that of a county commissioner salary

B.  Councilmanic Districts:

1. The initial district map will be established and recommended by the Charter Board and become part of the charter document to be approved by the voters this coming November.  A first draft of the map is available for public review, and at the April 25, 2012 meeting of the Charter Board, member Bob Kresslein (pictured above) presented another version of the map for consideration.
2. It is expected that the board will continue its review of the district maps over the next several weeks.
3. The districts are mandated to be “compact, contiguous, substantially equal in population and have common interests as a result of geography, occupation, history or existing political boundaries.”
4. A Redistricting Commission will be appointed by the County Council “not later than April 1 of the year following each decennial census date.”

C.  Executive:

1. The County Executive shall act as the chief operating officer of the county government.
2. This individual will be responsible for carrying out (faithfully executing) the laws of the county.
3. The executive will prepare and submit to the Council an annual County Budget for review and approval, as well as give an annual report.
4. The executive will be elected to serve no more than two consecutive four-year terms.
5. While compensation has not yet been established by the Charter Board as yet, it is expected to be in line with other counties of comparable size and likely not that different from the salary of Frederick’s county manager.

D.  Budget and Finance:

1. The County Executive shall appoint a Director of Finance.
2. No later than April 15^th of each year, the Executive will submit a budget to the County Council for the ensuing year for which at least two public hearings will be set.
3. The County Council may decrease or delete certain items from the budget, but cannot increase any planned expenses.  They cannot increase projected revenue in the budget either.

E.  Land Use:

1. The County Charter will adopt the provisions of Article 66B of the Annotated Code of Maryland to govern land use in the County.
2. This is the same law that our current County Commissioner form of government operates under, so nothing substantial changes in this arena.

F.  Charter Review Commission:

1. Beginning in 2018 and every ten years thereafter the County Council will appoint a group of county residents to review the charter and recommend changes
2. This review commission will provide a report to the County Council within a period of 18 months at which time the Review Commission will be dissolved.
3. Any changes that County Council deems worthy of adoption will be placed on the ballot for voters to approve at the next general election.

G.  Transitional Provisions:

1. If Charter Home Rule is approved by the voter in the November 2012 general election, this form of government will become effective on December 1, 2014.
2. Candidates for the seven County Council seats and the County Executive position will campaign for office with elections to be held in general election of November 2014.
3. All existing governmental officers and employees will remain the same as under the current form of government.
4. All existing appointed boards and commissions will remain the same: Planning Commission, Board of Zoning Appeals, etc.
5. The Board of County Commissioner form of government will be abolished.

The next meeting of the Frederick County Charter Board will take place on Tuesday, May 1, 2012 at 7:00 PM at Winchester Hall on Church Street in downtown Frederick.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

Will exorbitant start-up fees squeeze out the local flavor of Frederick?

Last week, the city of Frederick’s Board of Aldermen met to discuss the ongoing dilemma of water and sewer impact fees.

This issue has prevented small businesses from opening downtown in the past, but it gained notoriety when local chef Bryan Voltaggio and his business partner Hilda Staples put their North Market Kitchen project (to be located in the former Carmack Jay’s building) on hold last fall. Hilda and her angel investors decided they couldn’t stomach paying out in excess of $200,000 in hook-up (impact)  fees to the city before the restaurant even opened its doors.

Some accuse the Volt team of creating a tempest in a teapot, but that does not steep well here. If a nationally-renowned chef with a fleet of financial backers can’t make an income model work to re-furbish a longtime vacant piece of downtown Frederick Commercial Real Estate into a restaurant, how will aspiring restaurateurs with significantly fewer resources make it?

Rumor has it that Wild Wings recently signed a deal for the very high traffic count prime commercial real estate in Market Square over by Wegmans, paying the City of Frederick $200,000 in impact fees without so much as a whimper. Only a chain operation can afford those kinds of upfront costs.

National chain restaurants certainly hold an important place in any community, wouldn’t it be nice to see downtown Frederick retain the unique culture and charm that a strong influence of locally-owned businesses can provide and nurture.

The establishment of “Impact Fees” by local governments has become quite popular over the last twenty to thirty years.  In essence these are fees charged to new users to cover for the additional “impact” that new development will place on public services and systems.

Other than water and sewer impact fees, school impact fees are charged in Frederick County to cover the impact that children coming from new homes will have on the school system.  There are also park impact fees, safety impact fees and even library impact fees just to name a few.

In the case of a new restaurant, how is it to compete?  Imagine your reaction if the next time you enjoyed a meal at a new downtown restaurant and your bill had a line item on it that stated “Water & Sewer Impact Fee Pass-Through Charge … $5.00”?!?!   Not good public relations.

Is it fair that a new business should pay 100% of the cost of this new growth, or do certain types of growth benefit the community at large so that such costs should be spread among the existing users in some proportionate manner?

It’s not an exaggeration to say that the celebrity status of Volt has had a ripple effect on all of the excellent shops and eateries downtown. And it’s important to point out that without The Tasting Room, Firestones, The Orchard, Acacia, Isabella’s, Brewers Alley (and so many other local downtown restaurants), Volt probably would never have come to Frederick in the first place.   Isn’t it fair to also say that as each new restaurant comes to downtown, all of these establishments benefit as Frederick’s reputation as a dining hub grows?

Great food is an important part of Frederick’s culture and a cornerstone of its future growth and success. Richard Griffin has pointed out, correctly, that we all benefit when unique and well-run businesses open up downtown. Downtown Frederick not only hops on the weekends, but also on weeknights — bursting with energy and a great mix of people from young to old enjoying the food, the shops, and the general ambiance. Just try to get a table downtown on Thursday-Saturday night without a reservation or a long wait.

North Market Kitchen would have gone a long way toward gentrifying an area of North Market Street that has tremendous potential but doesn’t get as much tourist traffic as the southern blocks of that street. As the real estate recovery begins pick up speed, what is clear is that the zoom-zoom days of 2004 to 2006 will not return for a very long time – if ever. In addition to reviewing our city government spending and pension plans more decisively, it is also time to take a hard look at the upfront development charges that are actually impeding the local real estate recovery.

Many of the city’s land-use regulations and real estate development fees were established in those zoom-zoom days, when thresholds were set to such heights that many residential and commercial real estate developers began to wonder whether these measures were more to curb growth pressures than to encourage the redevelopment of downtown properties for establishment of new businesses.

In looking at the costs to provide these public services, are they being operated int he most cost effective manner?  Could it be that the city government has been reluctant to seriously get its fiscal house in order, as Aldermen Young and Aloi have been calling for?

While there has been a good bit of pecking around the edges, to date, the city has yet to be decisive in addressing many areas of government spending, which would result in significant costs savings.

This post has focused on the impact on the local restaurant businesses … for a moment think about the impediment these fees will have on the ability of a 200 plus room downtown hotel to get off the ground.

The good news is that the city plans to hold a public hearing on water and sewer impact fees in coming months. To date, that hearing has not been set. Stay tuned, and please contact your local aldermen in the meantime to encourage them to find a better solution to this issue!

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.

MacRo is pleased to have developed an informational website for The Manor at Holly Hills, a future luxury residential community of 21 estate lots east of Frederick City. Visitors to the new site can learn more about this future community and follow along with each stop of its development. The lots are scheduled to be recorded in July 2012.

Visit www.manorathollyhills.com for sitemaps, amenities and frequent updates on the project status.

To arrange a personal tour of the lots and for additional information, contact Rocky Mackintosh at 301-698-9696 ext. 202 or rocky@macroltd.com.

Appreciating the contributions and the values of those we have lost

Within a period of just five days last week, three unfortunate events gave me reason to pause and reflect on the value of the word “community.”

Besides the regular and consistent references to “real estate” in what we post on the MacRo Report Blog, “community” is probably the second most-often used word in our articles.

I found a simple and meaningful definition in a web search:

“Community: A group that is organized around common values and social cohesion within a shared geographical location, generally in a social unit larger than a household.”

In the 40 years that I have dedicated to my professional life here in Frederick County, Maryland, I believe that there is no single word that better defines this wonderful place.

Not unlike a large family whose members have very diverse personalities and philosophical beliefs, yet share a common love for each other, the vast majority of the 235,000 people who live, work and play here share a common love for more than the physical nature of this part of the world. There is a sense of pride that goes beyond self-focus and comes from being part of something greater than ourselves.

Truly successful communities are able to survive and grow through decades, and even centuries, as dedicated individuals instill that true sense of common pride from one generation to the next. Not unlike a well-oiled turnstile, as many leave the place, new and vibrant individuals enter to carry on traditions with fresh ideas.

My cause for pause last week occurred with the passing of three individuals, who in and of themselves did not move mountains, but without question played a role in making Frederick the community I know and love.

As a young real estate professional in the 1970’s and well into the 1980’s, I had the privilege of getting to know and use the services of Franklin W. Martz who passed away April 7, 2012.

Frank was not your typical lawyer. He was to me the epitome of socially engaged legal council. All too often when I brought a real estate transaction into his office, it was Frank’s way to want to know everything about the people and their situation. Of course more often than not, he already knew them and had more than one funny story to tell about past experiences with them.

When you met with Frank, it was very important to block out twice as much time as he suggested. While his style was that of a country lawyer who liked to keep things simple, that social element was what he was about.

Frank gave back to the Frederick community in many ways; as it was so nicely stated in his obituary, he loved baseball and sports. His engagement with coaching and mentoring local youth were among many of his involvements. He touched many lives throughout his own and they are better for it.

It was Wednesday, March 28, 2012 at our noon Rotary lunch meeting that I last saw my friend Mike Cady. We shook hands and embraced as we would often do. Knowing that his illness had been slowly sucking the life out of him for longer than most could bear, I asked how he was doing. Within that tight moment, Mike, who rarely complained, answered with a whisper, “Rocky, they tell me I have two weeks left.” We held each other’s hands and shared a personal moment.

Fourteen days later, Michael L. Cady left this life. The Orphans’ Court Judge, former Frederick County Commissioner and wrestling coach was one of the finest and most sincere individuals that I have known. While it was clear that he enjoyed the authority that such positions gave him, he was one of those people who used it selflessly to help others in all walks of life.

I had the good fortune of working closely with Mike in his political career. He was truly one who looked beyond partisanship and tried to move to common ground. For that he often took considerable grief, even from his own supporters while serving on the Board of County Commissioners. But that’s what Mike was all about. For him it wasn’t as much about getting everyone to like him as much it was to do what he believed was the right thing. For that trait alone he has earned the respect of many.

In last Sunday’s Frederick News Post, Jack Topchik wrote a wonderful tribute to our mutual friend. Topchik referred to Mike as a man with whom he shared common values.

With those values as the centerpiece of his being, Mike touched a broad cross-section of our community in all that he engaged in — from his work with youth, families, and the indigent, to business people, to the arts.  He has left a hole in our community and will be missed.

Thursday, April 12^th, was a beautiful day in Frederick County. I was going about my routine of making calls related to the many community causes that I have committed to as well as the land and commercial real estate business. One of the numbers I dialed was to return a call to Paula Routzhan, who had left me a message asking for a donation to a charity she was representing.

From my enthusiastic “HELL-O” to Paula, I quickly received word from her that her mother-in-law, Grace Routzhan, had just passed away a few moments earlier. You never know when you will encounter such an awkward moment, but this was one of those. I quickly offered my deepest sympathy and allowed her to return to her family.

I had met and conversed with Grace many times over the years, but knew her best through her son Daryl, his wife Paula, as well as her daughter Jan Starr West and her husband Steve – all four being close friends.

Grace was very close to her sister, Elizabeth Prongas, a founder of the Catoctin Forest Alliance, which is dedicated to land preservation in the northern reaches of our county.

The Grace I got to know was a lovely woman who was extremely devoted to her family. She also dedicated 20 years of her life as a volunteer with Frederick Memorial Hospital as a member of its auxiliary.

Routzhan family members have played an integral part in the rich heritage and growth of our community since they emigrated here from Germany in the mid-1800’s. And the legacy is in good hands of the next generation represented by Daryl and Jan.

As hard as it is to accept the passing of these three fine individuals through the turnstiles of Frederick County, we should all be proud of the part that they, and so many others, played in making our community a place we love.

Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board. He also writes forTheTentacle.com and Want2Dish.com.