Archive for the ‘ General ’ Category

Is the City of Frederick Doing Enough to Address Blighted Real Estate?

Some may answer this question positively, but others believe at best the effort has been sporadic and inconclusive.

Here’s the good news:  It appears that with all the attention that the issue of blighted real estate has gained over the last few years that the infamous slumlord  Duk Hee Ro is taking serious steps to improve her well-known Asiana building up to code … only of course after several delays and unfulfilled promises.

But there is a rumbling dissatisfaction among many that the City of Frederick may still not have a clear plan on how to follow through with recommendations made by the Blighted and Vacant Property Committee appointed by Mayor Randy McClement.

A History Lesson

During the summer of 2011, the Mayor and his staff began forming an ad hoc committee (meaning to serve at the pleasure of the Mayor) to help the City design a program for managing a growing concern about decaying buildings in the city.

It was in January of 2012 that the Committee officially was formed and became actively engaged in their mission.

Over the next ten months, the 16 member committee of citizens (including yours truly: Steve Cranford) and city staff reviewed hundreds of documents on blighted properties.  It studied legislation and community activities enacted by other jurisdictions to manage their blighted building problem.

From the beginning, the committee understood they were not a legislative or judicial body and their recommendations were a conceptual road map to help guide the City staff. The committee received excellent support from code enforcement, legal counsel, and various city staff.

To a member, the group was committed to presenting a comprehensive set of recommendations. The discussions were thorough, often passionate, and always charged with energy.

In the fall of 2012, the committee presented reports for both residential and commercial blighted real estate.  Within the reports are seven recommendations for the Mayor and Aldermen to use as a platform from which the staff could creatively design a wide-ranging program to help manage blighted real estate.

The Final Four … and Only Four

So, after 10 months of committee work followed by two years of city staff efforts, the Mayor’s office managed to identify just four blighted properties. This is a fraction of the thirty properties that staff identified in early 2012.  Over time the number was narrowed to twelve, but eventually it all came down to four.

It is understandable that when venturing into uncharted territory of facing the blight problem that the Mayor and his staff would approach such an effort with caution. But then again the actual blighted and receivership ordinances were mirror images of a neighboring jurisdiction that had given them time tested experience.

Six months after the Blighted and Vacant Property Committee completed its charge in April of this year, City staff provided an update of the committee’s recommendations to the public. As the briefing went on, it became evident to this and other committee members that in fact the recommendations were not developed beyond their initial statement. It seemed that the recommendations had become a task list.  As each recommendation was read aloud, a brief explanation was given of how the staff had completed that task.

It’s unclear if any further activity will take place on the committee’s recommendations. After all, each recommendation now has a check mark next to it.

It seems a Committee’s Work is Never Done?

Coincidentally several weeks ago a citizen’s petition was presented to the Mayor requesting the Blighted and Vacant Property Committee be reinstated as an ongoing advisory committee to the city; signaling that the citizens wanted more.

In an effort to mend “their relationship with residents, business owners and land-use professionals” over this issue, the Mayor and his staff held another briefing on Wednesday, August 27th … as well as for the benefit of the committee members to assure them that things are moving forward.

The Mayor’s opening remarks thanked the committee for its services, and clearly reiterated their ongoing efforts were not required.

Obviously, the city staff has a waterfall of initiatives they encounter every day and slogging through them is an arduous adventure. There is no doubt that the mayor has a highly talented brain trust at his disposal.

Unfortunately, that aptitude doesn’t appear to be fully utilized.

How many Crayons do you have?

The analogy that comes to mind is if you give a child a box of crayons and a piece of paper, within minutes he will create something and will likely use most of the colors in the box. The city’s blighted and vacant property committee gave the city a box of crayons and it appears they neatly listed all the colors in the box.

Is a citizen advisory committee the answer? Does the city need to direct more resources directed toward the blighted initiative?

Clearly, something has to be done to keep the mediocre momentum the city has generated from slowing down any further.

The author: Steve Cranford, Vice President of Commercial Sales and Leasing with MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He served as a member of the City of Frederick’s Blighted and Vacant Property Committee during 2012. 

Will Gardner Carry Rain Tax Revenues Home to Annapolis?

It remains one of the most significant unanswered questions in the campaign for Frederick’s  first County Executive.

If elected, will Gardner increase county taxes in order to comply with the O’Malley and Brown “Rain Tax”?

As the race between Blaine Young and Jan Gardner now enters its final 60 days, the former county commissioner president and Martin O’Malley supporter may very well be hard pressed to avoid answering this question.

For those Frederick County residents who don’t pay attention to their real estate property tax bills each year, well, I guess this article is not worth reading any further.

However, for those who do, you may be fully aware of the fearless challenge that current board President Young has been waging with the O’Malley administration the last couple of years over how Frederick County will comply with HB 987 or the Stormwater Management-Watershed and Restoration Program (affectionately known as the “Rain Tax”).  This bill was passed by the Maryland state legislature and became law on May 2, 2012. 

There are not too many Marylanders who haven’t heard of the “Rain Tax.”  But what is it, and why should Frederick County residents even care? 

In the depths of the Great Recession a tax is born

Figure A

It was back in 2010 Environmental Protection Agency (EPA) put out one its many mandates targeting the reduction of pollution levels in the Chesapeake Bay – essentially requiring a tax on all impervious surfaces.  This $7.7 billion clean-up plan was meant to require that the seven states (Figure A) whose rainwater runoff ends up in the Bay were to pro-rationally share in this effort. 

Of all those states, only Governor Martin O’Malley of Maryland chose to comply … and of course his Democratic state legislature fell in lock step with his wishes, as been the case with the 40 new taxes that he has signed into law “since he took office in 2007,” according the Forbes Magazine.

And the “Rain Tax” has been labeled the “most oppressive” of O’Malley’s edicts by Travis H. Brown, a contributor to the publication.

Fall in line or else?

Ten of the twenty-four counties in the state are located within the watershed of the Chesapeake.  Frederick County chose not to ask the residents and businesses within their jurisdictions to bear the burden by paying additional taxes to cover the costs of Maryland’s share.  While O’Malley acolytes protested, the Young board chose not to comply with the intent of the law by only placing a fee of one cent on all county real estate property tax bills.  Through savvy budgeting, they found a way to take from the county’s general fund the $4 million this year allowing it to avoid the $10,000 per day penalty for non-compliance. 

Neighboring Carroll County, another nay-sayer, negotiated with the state to meet their obligations in the same manner without levying taxes on its property owners.  All other counties chose to extract more revenue from taxpayers through increased real estate taxes as noted in Figure B (compliments of a presentation made by Gordon-Feinblatt LLC, Attorneys at Law in November 2013).

Within Frederick County each municipality that has planned services is required to comply with the mandate as well.  For example the City of Frederick chose to comply by levying a fee based upon a property’s impervious surfaces.  So, if you are a city resident, you will find your Rain Tax noted as a “Stormwater Management Fee” on your water bill.

With Frederick County being faced with an escalating annual compliance obligation that could reach as high as $22.5 million in a few years (that’s equivalent to 5% of the current County budget, mind you), Young has not made a secret of the fact that he has been working to position Frederick County to challenge the state and the EPA in court over the inequity of HB987.  Other counties have expressed interest in challenging the law as well.

Commissioner Paul Smith, who is now running for a Maryland House seat in District 3A has written often about the burdens of the Stormwater Management-Watershed and Restoration Program, has warned that at some point Frederick County may not be able to carry the burden through from the general fund alone.  With pledges of not raising taxes on its citizens, Smith and Young both believe that the county may not be able to avoid a possible average annual assessment of as much as $500 or more on every real estate property tax bill as the EPA mandated county obligations rise.

Creating Losers

The Rain Tax as a campaign issue has already caused a few casualties in state primaries.  The once popular and considered hard to beat councilman Dick Ladd an Republican from the 5th district of Anne Arundel County was defeated in June in a heated race.  Ladd was a strong advocate of the Rain Tax and supported taxing his constituents to cover the costs.  He lost in a close race.

This brings me back to county executive hopeful Jan Gardner.  Again, isn’t it fair to ask: If elected, how will she address the Rain Tax? 

Facts are …

Clearly, she has been a steadfast supporter of Martin O’Malley and surely will bow to Anthony Brown’s wishes if he is elected as another Democratic governor of Maryland.  In addition while I don’t think that Frederick News Post has necessarily provided nonpartisan coverage of the Gardner/Young race, I do think that reporter Bethany Rogers did get her “Fact Checking” right in at least one claim that Gardner Repeatedly raised taxes on families in her Head to Head piece posted on August 25, 2014, which validated her record of consistently increasing the tax burden on Frederick citizens between 2000 and 2004 while she sat as a Frederick County Commissioner.

Is it realistic to expect that if Gardner is elected that she will follow Young’s path of bucking Maryland’s commitment to the EPA mandate, or will she not want to ruffle the feathers of the state’s Democratic taxing machine?

Personally, I like Jan Gardner, and I have enjoyed chatting with her over a cup of coffee several times since she entered politics over a decade ago.  But as a potential future leader of our community, I truly question whether she has the intestinal fortitude to do anything other than fall in line with the Annapolis establishment and carry buckets full of Rain Tax revenue to the steps of the state capital.

That means Frederick County property taxes will likely increase without hesitation, if she achieves victory in November.

What do you think?

I welcome feedback from our readers on this serious topic.

~~~

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

Real Estate Investment & the Hypnotic Power of the “IF” Word

IF only God would give me a clear sign!  Like making a large deposit in my name in a Swiss bank – Woody Allen

From an investment perspective commercial real estate, securities, other assets and cash are really the same thing.  Some are more liquid than others, but as one considers the choices that life offers, over time in the end we leave it all behind anyway.

Whether it is over-ambition or naivety, often the dreams and goals that one becomes fixated upon turn out to be completely unrealistic.  In the back of his mind, he probably knew all along that his plans were not achievable without taking on a partner or exercising greater due diligence.  But now that he is in it up to his waist, he can only hope for the best … that is “IF” things break his way.

Maybe it is the concern over how a failure will look to his peers, or how the ramifications of a poor investment will impact the lives of his family members and/or employees, the hypnotic power of the “IF” word can often make one delusional.

IF one places too much focus on the past and/or the future and does not pay attention to the present, reality can be impossible to see. – Nobody Special

This is especially true for those who keep their poor investments going by living on “borrowed time” … depleting other assets such as using them as a credit source.  This is called DeNial, and it ain’t that river in Egypt … either way, the croc’s will get you.

It has been nearly 7 years now since the real estate market began to see the negative impact of what would be called the Great Recession, and while a slow and somewhat steady recovery is showing signs of sustainability, many investors are still dealing with real estate investments and/or businesses that are “financially challenged.”

Some have a well thought out strategy using a team of advisers to establish action steps including a healthy set of “If and Then” scenarios to provide alternative paths to follow.  They look at past decisions as educational experiences to make use of in current and future decisions.

IF you fool me once, then shame on you. IF you fool me twice, then shame on me – Chinese Proverb

On other hand some get lost in suffering from a bad case of counterfactual thinking (aspects of which can be referred to as lying to oneself), where one dwells on imagining alternatives to past decisions made, such as:

IF I had only sold that property at the peak of market in 2006; then I’d be set for life!  

This type of thinking can bring on feelings of regret and lack of confidence that can cause hesitation in making healthy investment and business decisions going forward.  Combine this with unrealistic expectations of values in the future … well, many have regretfully been fooled by their own thinking more than once!

IF you are using the “IF” word in this fashion, maybe it’s time to check your pride at the door and seek some assistance before it it’s too late.

Challenges are problems with solutions, IF only you are willing to face and overcome them. — moyo Adekoya

~~~

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

Multifamily Deals Total $57,000,000 in Frederick during 2nd Quarter

Multifamily was the strongest segment during the second quarter, posting three of the top five deals and over 700,000 square feet sold.

Second quarter sales of Frederick County commercial real estate kept pace with the same time period last year, an encouraging sign that the local commercial market remains stable despite mixed economic signals nationwide.  Second quarter 2014 commercial real estate sales in Frederick  totaled $117.5 million, versus $119.5 for the second quarter last year and $19.5 million for the second quarter of 2012.

There were three large multifamily deals in Frederick during the quarter, as that segment continues to draw the most interest from REITs and national investment firms.  (MacRo Report will detail the top deals of the second quarter in a future post).

Industrial and warehouse properties placed a strong second, which reflects the activity we are seeing on the local level as small to medium-sized businesses are moving forward with long-postponed decisions regarding leasing and buying warehouse and flex space.  In reviewing second quarter transactions, it was interesting to note that there were several transactions in the municipalities of Brunswick and Thurmont, an indication that activity in the commercial market is increasing throughout the entire county.

It was a busy quarter for commercial land sales as well, with  double the number of transactions (but only 35 acres sold); the median price was $203,098 per acre.  That compares to 238 acres during the same quarter last year, at a median price of $90,000 per acre.

Note: Statistics provided for commercial property sales in this report are based on thorough research of every recorded commercial sales transaction listed in SDAT for the quarter reported, and are deemed reliable.  

The author:  Kathy Krach is a commercial sales and leasing agent with MacRo.

Time Travel with the Frederick County Chamber of Commerce

Sometimes to see the political future, it is important to go back in time!

It was an exciting day for the Chamber on Tuesday, August 12, 2014, as Board Chairman Josh Bokee introduced the new President and CEO of the organization — Elizabeth Cromwell.   I must say that as a long time member of the organization and past board member (circa 1980’s), she was a surprising, yet very exciting choice.

Having watched the progression of the organization from back in the days of the two employee reign of the dedicated Kitty Reed to where the Chamber is today, Cromwell has a terrific foundation to build upon.  Her predecessor Ric Adams had transformed the look and feel of the organization from a small community voice of business to one that now garners strong respect as a bullhorn that makes an impact when it speaks on policy and political issues.

It was about four years this month the MacRo Report Blog posted two articles that echoed the opinions of a very frustrated business community in 2010.

Let’s set the scene and “Travel Back to Those Thrilling Days of Yesteryear” (for those of you who are old enough to remember, can you tell me what TV show this was the intro line for?).

Yes, it was an election year.  The primaries were set to take place in September with the general election that November.

There was an ideological battle being waged over which path county government should take in its relationships with business and the leadership the other incorporated jurisdictions within Frederick.

Jan Gardner, the Democratic candidate in the current race for County Executive, was about to complete her 12th year as a commissioner and President of the Board of County Commissioners during the last four.  While she chose not to run again, a recently appointed board member of the opposing party Blaine Young, a Republican, had entered the race for his first election to the board.

With the affects of the Great Recession beginning to show its negative impact on Frederick’s business community, things were not getting easier for sure.  To add to the pain, the Gardner administration had burned a number of bridges in its relationship with most of the 12 incorporated jurisdictions within the county (seven of which eventually filed suit against the county government).

The board consistently robbed special funds set aside for agricultural preservation programs and fire & rescue services in order to “creatively” balance its budget.  Fund balances for post employment benefit and pension obligations to former county employees were falling below acceptable standards.

Red tape, over regulation and innumerable fees weighed a very heavy burden on those who wished to take on new ventures or expand their operations.

Within and from outside the county lines Frederick became known as an unfriendly place to do business.

To top it all off, the Gardner board had placed the county under a growth moratorium and carried out a regressive rewrite of its comprehensive plan by down zoning and negativity reclassifying over 400 properties.

The cry for help from the Chamber membership to its president and board members pushed the organization to take action.  While it does not make a policy of endorsing candidates, the Chamber derived a method of ranking the wanna-be commissioners based upon how they met a list of business friendly qualification standards by releasing a Voters’ Guide.

They kicked the effort off by publishing six key questions for the primary political candidates to ponder:

1.  What specific steps would you take to make Frederick County more attractive to business investment, create jobs, expand our tax base, and ensure our future economic competitiveness?

2.  How would you improve Frederick County’s image as a business friendly jurisdiction?

3.  Do you believe some action should be taken by the Board of County Commissioners to address adverse consequences suffered by those whose properties have been down zoned in the Comprehensive Plan?

4.  Do you support the decision of this past Board of County Commissioners to impose a moratorium upon certain kinds of growth for a two year period?

5.  Frederick County currently operates under a Commission form of government, instead of a Charter form, in which there is an elected County Executive and County Council. Do you support changing our form of government to a Charter?

6.  In light of the current fiscal crisis the County is facing, do you believe our primary focus should be:

     a.  Creating more jobs and growing our tax base without raising tax rates;

     b.  Imposing more cuts to County programs and services and/or deeper reductions in employee compensation and benefits; or Increasing taxes on residents, businesses, or a combination of both? 

In October of that year, just weeks before the general election, Thomas E. Lynch, III, a well known local attorney and Chamber board member at the time offered MacRo, Ltd. an article to publish on our Blog entitled:  Not Just Another Frederick County Election.

This well respected member of the business community stated that the results of the September 2010 primary made “clear that this [would] be one of the most polarized elections in recent memory, which is reflective of the tensions that exist in Frederick County and throughout the country.”

Lynch emphasized the need to consider changing our form of government and stated that while a consensus had been building for many years, the Gardner board chose not to act.

He went on to say that:

“… for our own survival, this election must be about an honest evaluation of the cost of all government (especially legacy costs such as retirement and other benefits) and having our County government more ‘user friendly’ so as to allow businesses to succeed in the interest of preserving jobs in Frederick County.

 “Without a business community, we erode our tax base.  Many more of us could lose our jobs and we could very well have a financially destitute County government and municipalities.

 “Dealing effectively and honestly with these issues requires courageous and visionary leadership; leaders who recognize the value of business to support our economy, the lives of our employees, our non-profit community and equally, our governmental bodies.” 

As the 2014 general election quickly approaches, voters may find it very worthwhile to contemplate how much the Frederick County has progressed over the last four years toward those 2010 key concerns raised by our Chamber of Commerce.

Many believe that the above six questions have been all very favorably answered by the current board lead by Young.

It is said that change comes at a price, change is hard and yet, change brings hope.

Blaine Young is now the other candidate for County Executive.  Significant change has happened during his 44 months in office.  What the voters experienced was often not pretty nor perfect.  Mistakes, like in all administrations, were made and many things could have been handled better.  And maybe some things did not have to change, but despite all that, overall one must ask each member of Frederick County’s business community a famously simple question:

Are you better off today than you were four years ago?  

Contrary to the negative response that Ronald Reagan sought in October of 1980, when he asked the nation the same question, this time the answer may very likely be yes!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

Commercial Real Estate, Politics and Abraham Lincoln

Examine well that Pig in the Poke before you buy … or cast your ballot! 

This past week I was invited to have coffee with one of the candidates who is campaigning for a seat in Frederick County’s new charter Government in this November’s election. We enjoyed a pleasant conversation about the campaign and many hot button issues.

Along the way the topic of debate questions came up, and I found this person’s perspective quite interesting.

“There are questions regarding my political positions on some matters that I do not believe are relevant to voters in this campaign, so I wouldn’t want those in particular to be asked in a debate,” was in essence (paraphrased) the candidate’s statement.

Rather than offer a contrarian view and challenge that logic, I accepted those words at face value and moved on to another topic.

We ended our meeting with the typical pleasantries and well wishes just as the candidate was approached by an eager supporter who had some information to share.

Once I was back in my car ready to head off to my next appointment, I reflected a bit more on the issue of “relevant information” in politics and business.

Now, I have logged more hours than I would want to ever try to count in my career in land and commercial real estate sales. However there is one Latin phrase that I learned in my first real estate licensing class back in the early 1970’s that has remained embedded in the frontal lobes of my brain ever since.

“Caveat Emptor” is translated into many different phrases in the English language, but to us real estate types it means “Let the Buyer Beware.” Taking it a bit deeper, I found this legal definition on the web: A warning that notifies a buyer that the goods he or she is buying are ‘as is,’ or subject to all defects.

That stated, it means that the seller of the product and any agent who represents him/her in the transaction must not hide or misrepresent relevant facts about the product. So if the buyer asks certain questions about an item being sold, the seller or the agent should disclose the answer. Of course the seller can refuse to answer by essentially saying “I’m not answering that questions … find out for yourself.”

Such a response can often leave the potential buyer wondering if he may be buying the proverbial Pig in a Poke.” By the way, the word poke used here is actually derived from poque … of French origin, meaning sack or bag. So along the same line … the warning is to look at what is in that bag and examine it very thoroughly before you make the decision to purchase!

Over the years I have recruited, mentored and trained many real estate sales neophytes as they enter the profession. One could say that I have met all kinds.  But of those who have a passion to succeed, I can distinctly cull out two types of who often follow different paths to seek success in the business.

One group will often take a very mindful approach to understanding the goals of the parties on both sides of the transaction by recommending that the seller/client come clean so to speak on the front end of the process so as to provide any and all information that a buyer may feel is relevant, even if the seller does not.

Then there are those who follow the less personal path. They seek to generate as much volume as they can to get product in the door and move it out quickly so as to turn the next deal.

In taking the latter route, very often the agent and/or the seller will predetermine what they believe is just enough relevant information to share with potential buyers. This approach assumes that too much information could complicate a buyer’s decision making process in the transaction to the point that it could throw a wrench in the deal … or kill it all together.

I’ve never believed in the adage “What you don’t know can’t hurt you.” My philosophy has always been to reveal all the information about the property as early as possible … Warts and All as they say.

Besides shouldn’t the buyer be the one who determines what is relevant or not relevant for their intended use of the property?

This brings me back to my conversation with my candidate friend.

When you think about it, political candidates are like commercial real estate sales people. Their goal is to sell a product to the public … in a non-monetary sense, of course! That product just happens to be themselves – the personal skills and reputation which they have developed from life experience.

Obviously when one is selling his/her services in politics (as in business), he or she wants to be seen by the public in what that person perceives as the best light. But offering oneself Warts and All in the full light of day is in most cases what the public seeks … and truly needs in order to make a fully informed decision.

It was Abraham Lincoln who once said: “I am not bound to win, but I am bound to be true. I am not bound to succeed, but I am bound to live up to what light I have.”

Wise words from ol’ Abe, eh?

To that end, I really can’t understand why any voter’s question asked to a candidate is not relevant. Can you?

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

Does your Commercial Real Estate Broker have a CCREB Degree?

For professional CRE brokers, many skill sets are not learned in college or real estate school, but a matter of practicing what their mothers always said!

It was about sixteen years ago that my younger daughter returned home for her Christmas break from her freshman year first semester at Randolph Macon College in Ashland, Virginia.  She brought along one of her girlfriends who lived on her hall.

While we were all together, I couldn’t help but ask if either of them had decided upon a major to pursue.  In unison they rolled their eyes upward, looked at each other with big smiles and then turned back to me.  My daughter spoke with a chuckle and said, “Yep, we both want to get a CCM degree.”

Hmmmm … I wondered.  I know of the BA and BS college degrees, but at a college level, I had never heard of CCM. 

So, while they continued silently humored by my confusion, I asked, “OK, I give up. What is a CCM degree?” 

“County Club Mom” was the answer. 

Imagine: graduate from college, get married, have kids and lounge by the pool at the local club all day.

Well, three and a half years later in 2002, the girls did not achieve their CCM degrees.  However, my daughter did graduate with a BS degree, married and landed a terrific position in Richmond,Virginia … that is until the babies were born. 

Today she is a happy and proud stay-at-home-mom with no great desire to become a member of the country club set.

Now, what in the world does my daughter, who fantasized about a CCM college degree, have to do with Commercial Real Estate, you ask?

Well, to put it simply, I’m of the belief that there is often something that all commercial real estate brokers can learn from some traditional motherly wisdom. 

The one word that sums this up is Compassion.  Throw in the perfected arts of listening, mediating and leadership … Hey, you have a broker with a CCREB.

That would be a Compassionate Commercial Real Estate Brokerage Degree.

In the CRE world, many look at brokers and agents as people who Eat What They Kill!  … make a deal and move on to the next, you might say.

In the metropolitan and corporate business to business world, some of our kind use that approach and thrive. 

But in the real world of everyday commercial real estate, many clients seek out more than just brokerage services to find a buyer or tenant for the property they wish to market. Many bring with them not only real estate, but a suitcase of other challenges as part of the project. 

Just because one has a substantial investment in land or commercial real estate, does not mean that that property owner understands the complexities of the development and sales processes or even what the term “Change in Use” means in the local zoning code.

CRE clients come in all shapes and sizes and from all aspects of life.  They will often bring to the table financial, relationship and emotional issues.  While these are not necessarily recorded liens or judgments attached to the property in question, these issues are part of the package.

Business and investment partnerships don’t always end amicably.  Family members who share in ownership often bring significant differences of opinions to the table.

The challenge for many real estate brokers is often to get to know the client (or clients) and their personal challenges, needs, wants and desires before one “digs” into the physical real estate.  More often than not, the former consumes significantly more of the agent’s time than the latter.

There are times that I wonder if I should have majored in psychology in college and minored in business.  But over years, while I have pursued and received many real estate professional designations, never have I come across one called Commercial Real Estate Psychology. 

During those years I’ve probably logged in more hours listening to and consulting with my clients over their challenges, needs, wants and desires than I have in transacting some of their real estate.   It is, however, that upfront preparation that can often be the difference in facilitating quick and confident decisions on the part of the property which makes the deal.

Consider the elderly man dealing with the early stages of dementia who refuses to give up control, or the partner who walked out of a closely held business and refuses to cooperate in the sale of a property. 

While a commercial real estate professional typically does not have a license to practice medicine, law or accounting, it may not be unusual for him or her to recommend advisers with such skills be called upon for assistance.

One of my favorite experiences took place in 1994 when I was called upon to facilitate the development, marketing and the eventual sale of over 3,000 acres of land for 35 owners living in multiple states and comprised of three generations of heirs to a partnership (and their lawyers) that was established among 10 poker buddies in the 1950’s. 

With the exception of one individual, they all had one common goal: Maximize the value of the land and sell it

The “odd man out” happened to be one very elderly member who was the managing/general partner, but adamantly refused to cooperate with the majority.  After a lengthy partition suit and trial to have this curmudgeon relieved of his duties, I was called upon by a court appointed trustee to do my thing.

It took several months of compassionate and consultative mediation to bring about an understanding among many different personalities to elect three of the members to act as the decision makers for the group. It was a matter of building trusting relationships, understanding the concerns of each member to create the organizational foundation for an expeditious decision making process through the development, marketing and sales of the project to multiple purchasers.

It was my mother who used to interrupt me as I ranted on about things.  She would put her finger to my lips and remind me that while my Creator gave me only one mouth, the two ears on my the sides of my head mean that I should listen much more than I speak.

It is a simple lesson that, if mastered well, could earn you a worry-free poolside seat at the club. 

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

2 Weddings and a Poop-Bag

Over the years my travels to visit family in Maine have provided me with many first time experiences

It’s the month of July, peak vacation time; so let’s take a break from commercial real estate talk for a week.

I guess it’s Independence Day that kicks off the summer travel season.   For my wife Nancy and I, we took advantage of the long weekend to amble our way up the Jersey Turnpike into New England for a bit of hiking between Amesbury, Massachusetts and Bald Rock Mountain in Camden, Maine.

We brought along our 12 year old Border Collie Tripp, as his specialty is that of a trail blazer.  

It was in Amesbury that we visited my politically and environmentally correct friend Richard and his wife Sally, who introduced this country boy to the sweet aroma of scented doggy poop-bags as we hiked along the shores of the Merrimack River in Maudslay State Park.  

It “almost” made it a pleasure to pull those little green baggies out of my new hip mounted dispenser to collect droppings of excrement along the trail … Truly gave new meaning to the phrase “a walk in the park!” 

The primary purpose of the journey, however, was to attend the wedding of Emily Russell, the daughter of my first cousin Robin (for you genealogists, Emily is my first cousin once removed).  The extent of my family members in Maine is as broad as that of the propagation that my five siblings and I have provided Maryland.  We are close bunch of cousins with relationships that now span five generations in the little seaside Down Eastern vacation village of Castine. 

Castine, with a permanent population of about 1,400, is in many ways a microcosm of Frederick.  It shares a very strong sense of community.  Their annual 4th of July celebration parade has got to be one of America’s best. And for anyone who cares to, you can get to know all the movers and shakers of the town within a matter days, or in minutes, especially if you stop into MarKel’s Bakehouse off Main Street for breakfast, where you will find my cousin Kelly and husband Mark doing their magic in the kitchen producing some of the best Danish pastry south of Bar Harbor. 

To pass the time in the evening, one can always stop in at Danny Murphy’s Bar down along the dock.  Ownership has changed hands a few times since Kelly and Mark were married twenty-five plus years ago.  That happened to be the last time I visited the establishment, when a large contingent of the wedding party migrated there to continue the celebration after my Aunt Dorie and Uncle Bob shut down the backyard reception so they could get some sleep. 

Mainers can be a rowdy bunch. 

As it turned out the after-party in the pub didn’t really go all that well.  It was another cousin of mine Chip of New York fame, who tried to order a drink by bellying up to the bar that night … which was crowded elbow to elbow by a pack of visiting merchant marines.  I’m not sure if it was his thick New York accent or that he may have made a smart ass remark as he attempted to wedge his way through that inebriated crew of bulky sailors.  It wasn’t long before the fists and chairs were literally being flung in every direction.  At that point, my only focus was to save what was left of my New York blood line. 

It was a short walk up the hill to the medical clinic, where Nancy, my brother and I dragged a battered Chip to get stitched up before the numbing effects of the alcohol he ingested had worn off. 

As the three of us stood on the front entrance steps of the clinic waiting for Chip’s return, we breathed in Castine’s cool midnight air.  Unfortunately it was my brother who became the next victim of too much celebration – Mainer Style.  This family member’s name is being withheld to protect the fine reputation he has earned in the Frederick community over the years … So let’s just say that the freshness of the air turned a rancid green as he lost his lunch (and his reception dinner) on those steps within minutes of Chip’s admission. 

Speaking of reputations to protect, the Maine Maritime Academy makes its home in Castine.  Established by the state legislature in 1947, it is a public post-secondary college and nautical training institution.  My late uncle served as the medical doctor for the Academy back in the 1980′s.  Today, my Cousin Heather’s husband Billy serves as the president of the nearly 1,500 student organization.  

A pre-wedding party was held at the centuries old presidential mansion which rests atop one of Castine’s highest points offering expansive views of the wide mouth of the Penobscot River with the Academy and the town on the foreground. 

So clearly this time around everyone and President Billy himself had to be on the best of behaviors, so as not to tarnish the family image.   

As the full moon rose over the river that evening, we partiers once again journeyed down to the dock as we did 25 plus years earlier.  Not to imbibe at Danny Murphy’s, but to watch the fireworks that were rained out from the past week’s 4th celebration.

Turns out that Fire Marshall Randy (not a relative) had planned to shoot them off the next night, but since he was invited to Emily’s wedding, he did himself a favor and lit the clear night sky with a spectacular display from out in the river.  With the full moon perfectly situated off to the right, it was hard to imagine that this show would not match any other any where.  

Have you ever watched fireworks under a full moon?  It was another first for me! 

The next day was a perfectly clear and cool Maine day.  The 4 o’clock wedding was set at a former family “camp” along the shores of Alamoosook Lake (aka “the pond”) about half way ‘tween Castine and Bangor.  Now the home of Cousins Kelly and Mark, the outdoor event brought in family and friends from all over the country.  

Gathered around an old canoe filled with local craft beers and wine covered in crushed ice with white Christmas tree lights draped above in the trees, the crowd began to migrate to their seats as the setting sun offered up a golden backdrop reflecting across the lake.  What a setting for Emily and her soon to be wedded partner Kate to walk down the lush green pathway to recite their vows!

Yes, it was my first gay wedding, and it was a wonderful event.  Meaningful words were shared about the value of deep personal relationships that brought tears to the eyes of many.  With the understanding and love of all the attendees, the bride and bride stated their vows, and then the real party started.  

It truly was a beautiful event that carried on well into the early morning hours in true wicked Mainer style.  

As I am now less than 120 days away from qualifying for Medicare, I continue to discover the joy of life and the fresh experiences it has to offer. 

Enjoy the rest of your summer! 

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few. 

East Frederick Rising: The Future of Modern Urban Renewal

Can the east side of Frederick become a Dutch wonderland on American soil?

During the summer of 2005, I had the opportunity to travel with my husband and children to Holland to visit extended family.  Prior to our trip, I read with trepidation that the Netherlands is the most densely populated country in the European Union.  I pictured my small children being swept out of my hands and into Amsterdam hash bars on a tide of boisterous crowds rivaling Times Square on Thanksgiving weekend.

I was way off base, as it turns out–about the crowds and the hash bars–because the Dutch are masterminds at urban planning and engineering.

The streets of Amsterdam were bustling and alive, but not crowded.  In the nearby suburb of Wassenaar–where my brother-in-law lived with his family–it was a 30-minute stroll from the center of the charming village square through suburban neighborhoods to the farms that ringed the outskirts of the community.  We spent a sunny August afternoon on a pristine beach just a 20-minute bike ride from his home–again, busy and lively, but not unpleasantly crowded.

Best of all, it is possible to travel to just about anywhere in the Netherlands by way of bicycle on dedicated bike paths criss-crossing the entire country.  Perhaps as a result of the heavy dependency of the Dutch on bicycle travel, obesity did not appear to me to be a problem there (this despite the fact that most food groups in Holland are served fried into some sort of pancake).

I would never have guessed at any point during our all-too-brief time in the Netherlands that nearly 17 million people are crammed into such a tiny jewel-box of a country.  To this day, I have no idea where those millions of people were tucked away.  (I also had trouble spotting the very discreet Amsterdam “coffeeshops” until they were pointed out to me.)

My thoughts have returned to Holland many times as I’ve watched Frederick’s political pendulum swing back and forth between pro-growth and no-growth administrations.  In Amsterdam I saw proof positive of an existence that allows for the best of both worlds:  a vital and breathtakingly beautiful urban city community, surrounded by bucolic villages and farms.  An existence with room for all kinds of people living in all kinds of environments supporting all kinds of lifestyles.

I have a tendency to become enchanted abroad, so this Utopic vision of Dutch life is no doubt partially a result of travel-dazzle and jet lag, but only partially.  If the Dutch can create such beautiful clean-living harmony for millions of people on so few square miles of land (land that they largely artificially engineered out of reclaimed river delta) why can’t we create something similar here in Frederick?

Frederick may have a chance to do exactly that with East Frederick Rising, a 2,000 acre mixed-use smart growth project located between Carroll Creek Linear Park and Frederick’s expanding airport just west of the Monocacy River.  Billed as “Mid-Maryland’s Economic Hub for the 21st Century,” this project is planned to marry the walkability of Frederick’s historic downtown with modern technologies and sustainable methodologies to create a community very unlike typical suburban developments.

East Frederick Rising is the next natural step in building on what was begun with Carroll Creek Linear Park, a beautiful destination born of Ron Young’s determination and indomitable will to solve the problem of recurrent flooding in the city and at the same time create a park drawing locals and tourists alike.

It may seem counter-intuitive for a city the size of Frederick to undertake a project of such substantial scope in a lackluster economy.  However, the stars are aligning in a manner that suggests this project is entirely feasible:

  • Millenials: East Frederick Rising dovetails perfectly with the zeitgeist of the millennial generation:  urban living in walkable, vital communities served by public transit, rich in restaurants and cultural activities, and surrounded by environments that support active lifestyles.
  • Political Will:  Smart Growth is here to stay, and East Frederick Rising could potentially be a marquee project setting the bar for sustainable development in Maryland going forward.
  • Location: Frederick is well within commuting distance of Baltimore and D.C. and airports serving both, and 2,000 acres is a massive tract of land for an urban renewal project.
  • Capacity: We’ve had conversations at MacRo with several regional developers (all deep of pocket and rich in experience) who are enthralled with the character and charm of downtown Frederick and chomping at the bit to develop innovative mixed-use multifamily projects here.  Without exception, they would all like to see a high-end grocery store located in the east end first, but that may be putting the cart before the horse.
  • Jobs potential: The Frederick region has long been nurtured as an incubator for the bio tech industry, and with our highly education population has the potential to become a hot-bed of start ups and entrepreneurs.

Combine developer money, TIF financing, political clout, cultural shifts to urban living, a charming historic town in a highly-desired location, and steady job growth…and what do you get? A sweet spot where the impossible begins to seem possible.

The Urban Land Institute conducted a workshop to develop recommendations for implementing the vision of the project, and presented its findings to the City of Frederick yesterday.  Judging by the comments of aldermen and the public alike, most saw the potential in the project, and understood the importance in having a vision and a plan to ensure that the fate of east Frederick isn’t left to the vagaries of market forces.

It goes without saying, East Frederick Rising will need a stalwart champion (or champions) with the vision, determination, patience, and clout of the Carroll Creek Linear Park advocates lead by Ron Young decades ago.  And of course, this is a project that will also take decades–perhaps as many as five of them–to come to full fruition.

If executed true to the vision, East Frederick Rising has the potential to be an astounding mixed-use community that rivals anything Maryland has ever seen:  a modern marvel in urban renewal that compliments and co-exists intimately with Frederick’s historic heritage and is locally sustained by its rich agricultural assets.

It’s enough to make even the Dutch a little envious.

The author:  Kathy Krach is a commercial sales and leasing agent with MacRo.  Thanks to this post, she’s been afflicted with a strong hankering for international travel.

City Economic Development Advisory Council Formed

Can 16 members of the Frederick community provide BOLD ideas to enhance and attract more businesses to the City?  

It was early May of this year that I received an email from Richard G. Griffin, Director of Economic Development for The City of Frederick. 

The message was to inform me that Mayor Randy McClement was going to “appoint a 16-member Economic Development Advisory Council (EDAC) for the City of Frederick composed of business owners/representatives, developers, and commercial brokers,” and I was identified “as an individual whom he would like to serve on the Council.”

The goal of this new entity is provide “advice and specific recommendations to help ensure that the City of Frederick, both today and into the future, is the preferred community in the Baltimore Washington region for attracting private business investment, jobs, and economic opportunity.”

Of course I was honored to be asked and very willing to serve.  I was also very impressed by the others who accepted the Mayor’s invitation.

It is hoped that this crew of “EDAC-ers” will be able to provide advice and recommendations to the Department of Economic Development and city elected officials regarding the development of:

> Sound regulatory policies affecting business and industry

> Annual economic development work program and budget

> Business development incentives

> Evaluation methodology to determine efficacy of economic development program

> Special issues/projects assigned by the Mayor and Board of Aldermen

> Community education on economic and business development topics

The first meeting was held on Monday, June 30, 2014.  It was and will continue to be open to the public.

City Alderman Josh Bokee was introduced by the Mayor to provide and overview of the City’s hopes for the council.  Bokee stated that he seeks BOLD ideas for the group to increase what many may believe is an already vibrant economy.

Richard Griffin and his staff outlined a detailed overview of the many positives that they have found draw new business to the City, as well as a number of real and perceived impediments to business development.

Issues like the fact that real property taxes are costing city owners up to $2.00 more per square foot than similar buildings located outside the city limits in the county.  The City also has a business personal property tax, while the county does not.

Traffic congestion, lack of transit options, the City’s zoning ordinance, and its seemingly cumbersome development review process were also listed, among other things.

Clearly the City of Frederick has many attributes that have caused any number of businesses to relocate within its boundaries.

Consider Leidos Biomedical (formerly SAIC-F), Wells Fargo Home Mortgage, State Farm Insurance and AstraZeneca (formerly MedImmune) to name a few.  But as the national economy has struggled to recover, many of our neighboring jurisdictions on Maryland’s outskirts have ramped up their efforts to attract business to their door steps.

Having recently served on the Economic Development Task Force in 2012 and 2013 that was appointed by the Board of County Commissioners with similar goals, it will be interesting to see how BOLD this City version is willing to be … or maybe the question will be how far the Mayor will let these EDAC-ers go?

Stay tuned … this could be fun!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades.  He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012, to name a few.  

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