MacRo, Ltd. is pleased to announce the leasing of 8,767 square feet of office and warehouse space on Tilco Drive near Reichs Ford Road in the City of Frederick to City Electric Supply and the American Society for Colposcopy and Cervical Pathology (ASCCP).

Rocky Mackintosh and Kathy Krach of MacRo, Ltd. represented the landlord RW Warner Inc.  City Electric Supply was represented by T.J. Spencer of Swope Lees Commercial Real Estate.

City Electric Supply is an electrical wholesale business with more than 1,200 locations around the world.  This location is their first branch in Frederick County and their 5th location in Maryland.  ASCCP is a medical research and training nonprofit organization that is now headquartered at the Tilco Drive location.

For more information on how MacRo, Ltd. Real Estate Brokerage Services may be able to assist you in the sale or leasing of your commercial or industrial property, contact Rocky Mackintosh at 301-748-5655 or rocky@macroltd.com.

Born of Irish Princes, she seeks to rule once more!

It seems that the Doherty Clann of County Donegal in northwestern Ireland has always been a proud and rebellious bunch.  Derived from the Gaelic O’Dochartaigh, the name has evolved over the centuries into many variations including (O) Dougherty, Daugherty, Docherty, and Doharty.

The name literally means “Our Heritage.”

Tradition has it that back in the 4th century a Doherty ancestor known as “Niall” was the Legendary High King of Ireland.

During his reign, it is said that Niall was responsible for raiding Britain on the coast of Wales … and during one episode he kidnapped the one and only Saint Patrick and held him captive in Ireland.

Niall set a family tradition of fighting relentlessly in the name of honor to uphold his cause.  The powerful clan continued into the early 17th century with his 21 year old descendant Sir Cahir, who served as the Alderman of Derry City.  The young lord became embroiled in conspiracies and sought revenge over confiscations of clan real estate.

O’Doherty’s Rebellion ended after he was slapped by the governor. Sir Chair then killed his superior and went on to ransack and burn his hometown to the ground.

As in the case of Niall, his numerous enemies eventually retaliated causing a fateful demise of the once powerful Doherty Clansman.

Fast forward now to the 21st century in the City of Frederick, Maryland, where resides another descendant of  the Legendary High King.  There you will find the proprietor of an Irish Pub known as Magoo’s.  Her name is Jennifer Dougherty, who proudly hails her heritage of the old country.

She too, once held high authority … not as an Alderman, but as the city’s Mayor from 2002 to 2006.  During her term, as the first female to hold Frederick’s highest post, Ms. Dougherty, like her ancestors, fought hard to get her way … but along that path, she made some of enemies.

Before she declared victory in November of 2001, it was 8 years earlier that Dougherty made her first stab at the coveted seat.  Her hopes were dashed to take on the Republican candidate Jim Grimes, when she lost to Gary Hughes in the September primary.

Her attempt at reelection in 2005 was dashed in the primaries.  It was just four years later that the relentless Dougherty once again met defeat in the primaries after she carried the family crest into battle in an another attempt to regain her rightful place in City Hall.

She met defeat again in a 2008 Congressional challenge against Republican Roscoe Bartlett.  Undeterred,  just months later she again raised her staff and entered the mayoral challenge a fourth time. Suffering another primary defeat, it appeared that she may have settled into a career of real estate agent and a pub owner.

But it was nothing more than a respite, as the Frederick entrepreneur has now risen again in 2013 as an unaffiliated candidate.

Knowing that the Democratic primary this time around will likely be a war of its own among the likes of two well-healed politicos Galen Clagett and Karen Young, Dougherty tenaciously hit the streets of the city knocking on more than 11,000 doors to garner over 1,400 signatures on a petition to earn the unprecedented right to skip the September primaries and prepare for the real battle against two competitors in November.

During her term in the power seat she accomplished several meaningful goals.  Of her lasting legacies, Dougherty boasts of:

1. Strengthening the city police force with the hiring of Kim Dine (who now serves as chief of the Capital Hill Police).
2. Establishing a Golden Mile Tax Credit to encourage property owners to make improvements to aging infrastructure along West Patrick Street extended.
3. Kick-starting the final phase of Carroll Creek Linear Park by selling off several city-owned sites in that area to private developers.
4. Gaining approval for a Hope VI grant from the Federal Department of Housing and Urban Development (HUD) to redevelop the decrepit public housing projects located at 7th and Bentz Streets.
5. Creating the Neighborhood Advisory Councils as a means of establishing a greater communication link between city government and individual communities.  For this she refers to herself as the “Mom of the NAC’s.”
6. Removing of the Jefferson Street night club, known as X-Hale, which the plagued the surrounding neighborhood with late night noise and wayward drunkards who often found unwelcome refuge in nearby backyards.
7. Championing an agreement with the likes of then Board of County Commissioner President “Lennie” Thompson and Lake Linganore to provide the city with an additional 4 million gallons of water a day once the Potomac River Water Line was completed.

As the months passed after her January 12, 2002 inauguration, many of the mayor’s early supporters found reason to abandon their allegiance to her army.  One writer in particular was long time Washington Post and later Frederick opiner: Roy Meachum.

Meachum, himself, has never been one to avoid an attempt to slash and burn those he finds disagreement with.  He and others grew furious with the mayor over a number of firings and dismissals of public employees.  Lawsuits piled up from these issues and other challenges around Ms. Doughtery’s interpretation of the city’s charter.

These battles, among others, were more often than not sparked by clashes with the three Republican aldermen: Bill Hall, Joe Baldi and David Lenhart.

Displaying her liberal leanings, Doughtery was unsuccessful in encouraging city worker’s to unionize, and she also fought against the changes in the application of the city’s Homestead Tax Credit.

While she gained a reputation of encouraging economic development through the private sector, many claimed that the controversial moratorium she imposed when the Frederick was fraught with a water shortage, was used to shut down growth.

She campaigned for an new era of open government, but her critics claimed many of her decisions were made behind closed doors and often usurped the authority of the board of aldermen.

Dougherty established a regular Tuesday morning press conference that was also called her time to issue her propaganda … but when her predecessor took office and disbanded the practice, he was lambasted for not being open with the press.

As she stepped back in for battle in 2009, Dougherty told the Frederick News Post in March of that year that she had learned from the “personality conflicts” that marked her mayoral term.  And today as she heads into the mayoral battle for her fifth time, she acknowledges the same.

She told Pete McCarthy of the News Post last February that “… city politics are better with less partisanship,” and after living it firsthand, it’s better to put “focus on the issues [and] less on politics.”

Unlike her other contender Galen Glagett, Jennifer openly admits that she has issues … that she believes that the City must address sooner than later.

In an interview that I had with her just last week over a Guinness at Magoo’s, she told me that she is very concerned about the lack of leadership in City Hall.  As a self-professed agent of change, Dougherty says that “tough decisions must be made” with the bulging post-employment benefit (OPEB) structure and pension obligations for current and former city employees.

“Government employees must feel the cost of government,” she stated.  Her goal would be to protect current employees using a vesting date to transition to a new plan. Otherwise if not dealt with soon, the financial burden will be overwhelming within “6 to 10 years.”

Dougherty also frets over the added costs that her successor (Holtzinger) left the city with the acquisition of the Hargett farm on Butterfly Lane … She would dive in to deal with this matter ASAP.

In terms of the city police, she says that the current administration has allowed vacancies in the force to grow, leaving that department “really stretched.” Immediate action is necessary, she claims.

As for the late night crime and safety concerns along Carroll Creek, the Linear Park is without a doubt the “Gem of the City,” and the mayoral hopeful would address the situation with the same heavy hand she used in expelling X-Hale from Jefferson Street.   She believes that new chief Thomas Ledwell is up for the task … “He just needs leadership” from the second floor in City Hall.

Knowing that her leadership style may have been perceived as brazen in the earliest part of this century, Jennifer seeks to build on her creation of the NAC’s and her Tuesday press conference schedule by introducing an interactive web-based concept she calls “Let’s Do Lunch.”  The plan grew from her experience as the president of the Carroll Creek Rotary Club, and would regularly bring together the likes of NAC representatives, State Delegates, business leaders and other key people in the city, including students, to discuss the pressing issues that should be addressed to continually make the city a great place to live and work.

There is no doubt that with Jennifer Dougherty now officially in the battle for the high seat in City Hall, it will be a very lively and press-worthy campaign.

I can already hear the chant of the clann as they march to November:

“Who so ever asks me of my birth…

I will tell them I am born of Irish Princes who ruled in Donegal

a thousand years ago; that I am descended from the High Kings of Ireland,

and my name is from the Clann ÓDochartaigh!”

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. His articles have appeared in  TheTentacle.com and Want2Dish.com.

Observing what the 2013 Frederick mayoral candidates bring to the table

As most readers of the MacRo Report Blog know, I have not been a fan of Maryland Governor Martin O’Malley.

From PlanMaryland to his administration’s unfriendly policies toward business (and just about everything in between), the man who obviously has his sights on 1600 Pennsylvania Ave. continues to contrive new methods of extracting our hard earned money to feed the state’s addiction to increasing the power and scope of government.

That stated, this post is not about Martin … However it is about one of his advocates in the Maryland House of Delegates — Galen Clagett, who has recently declared his candidacy for the position of the Mayor of the City of Frederick.

Since his 2002 campaign victory to represent District 3A (which includes much of the City of Frederick), Clagett has gained a strong reputation of the man who can deliver funds, grants and programs that bring home benefits county-wide.

His political skills have earned him key leadership positions on the House Appropriations Committee, the Capital Budget Subcommittee, Oversight Committee on Personnel, and the Joint Audit Committee, among others.

According to his mayoral campaign website, in less than 10 years Clagett has been instrumental in delivering nearly $1.7 billion of funding and support to Frederick County for such things as Direct State Aid, health and social services, public school construction, and any number of capital projects for local public and nonprofit organizations.  Impressive … and very true!

One could say his accomplishments have been so impressive that he has gained the title of Frederick County’s political Godfather in Annapolis.

His reputation as the man who makes proposals that “can’t be refused” began in 1978, when Clagett won a seat on the Frederick County Board of County Commissioners. There he would serve two terms and eventually become president of that body, as well as gain strong experience in attracting new businesses to our county and thereby playing a key role in growing the job base.

In the early 1980′s Galen entered the world of commercial real estate, and would eventually establish and grow Clagett Enterprises, Inc. into a well recognized brokerage, development and property management firm in Frederick County and its surrounds.

So here’s a question for city voters this year: Is Clagett the best choice among the growing list of candidates for Mayor?

With a little more than 5 months before the September 2013 primary, should one consider more than Galen’s power of bringing home the bacon from his trips to the state capital?

Clagett’s voting record has run very close to the O’Malley party line.  Over the years in our conversations regarding controversial legislative issues, he will often claim that while he did not agree with the position of his majority party, since he knew the bill ”was going to pass anyhow,” he cast his ballot with his democratic colleagues, so as to not fall out of favor with the O’Malley administration … and to “get something for Frederick.”

Consider his recent vote favoring legislation to increase Maryland’s gasoline tax to replenish the state transportation fund.

Being a master political strategist, Clagett has shown that while standing up for principle is one thing, maintaining power broker status with key State House alliances is another.

Several years ago, I traveled with Galen and a small band of concerned citizens to Annapolis to meet with the Secretary of Transportation.  The mission was to discuss the concept of crafting a public/private partnership (PPP) to widen Interstate 270 into three and four lanes north of Germantown all the way to its intersection with I-70 in Frederick.  While none of us had a dog in the race, we were there as local business leaders to support Galen’s idea.

That idea spawned some interest, but as things often happen in bureaucracies, it went dormant.  That said and to his credit, Clagett has continued to be a promoter of the PPP concept, which has proven to be a method of expanding public services and programs … while at the same time save tax payer dollars.

Speaking of saving tax payer dollars, this raises another question.

Consider the following:

The City of Frederick is in the throws facing some serious fiscal challenges — particularly in addressing its post-employment benefit and pension obligations, among many other issues.

We all know that the culture in Annapolis is to solve all fiscal dilemmas via raising taxes and/or robbing restricted fund accounts.  Case in point: the now familiar state transportation fund that was consistently drained to balance the State Budget and the proverbial Annapolis addiction spending.

The concept of actually cutting spending to the vast majority of our state elected officials is as foreign to our governor and his allies as a Sicilian is to Nome, Alaska.

So what about that question, you ask?

One may wonder: Does Clagett have the capability to break from his decade of being part of the “spend, then tax” culture in the State House to one of “cut and consolidate” in City Hall?

From an economic development perspective, while the City has gained its share of new businesses, many avoid moving within the Frederick city limits due to the simple fact that the total real estate tax bill is nearly twice that of a similar property located in the county … So for this reason alone, the city can not bear an increase in the property tax rate.

If anything, the city rate should be lowered.

Candidate Clagett brings a very interesting skill set to Frederick’s 2013 Mayoral race:  the political power of a godfather, who also has valuable private sector experience, but also one who has earned a voting record of increasing taxes and spending to expand government.   On top of that he also has the wisdom of knowing the value of public-private partnerships and appreciating the necessity of having a healthy economic development program.

Some may say that these conflicting approaches to governing don’t bode well for the average candidate seeking higher office.  But Galen is no ordinary politician.

As of this writing Mr. Clagett has a very thorough and impressive mayoral campaign website posted for the public to view.  The only tab however that lacks anything other than “… check back regularly …” is the one labeled Issues.

Could it be that there will be no issues of concern … if the Godfather succeeds in gaining the power seat in City Hall?

After all wasn’t it Don Corleone who told Johnny Fontane: “… Now, you just go outside and enjoy yourself, and, uh, forget about all this nonsense. I want you, I want you to leave it all to me.”

Stay tuned for further thoughts on the Frederick’s mayoral race in future posts.

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and for Want2Dish.com.

MacRo shares a campaign platform wish list from a commercial real estate perspective.

In “Mayor, Mayor, on the Wall, Who’s the Strongest of Them All?” I gave an overview of the candidates for the 2013 City of Frederick mayoral election.  This is the second part of that post.

In follow up, here are the goals I believe the next mayor of Frederick should pursue:

1.  Bring the City of Frederick’s fiscal house to order.

Post-employment benefit and pension obligations: This line item is a tremendous burden on the budgets of municipalities across the country. While the current administration has made adjustments during the past year—by  increasing participant contributions, changing the calculations for retirement age and salary basis, increasing the age of early retirement, and dropping a several hundred thousand into the city’s OPEB and pension funds—it seems to me that there is a lot more work to do to tame this albatross.  This is one Can that can not be kicked any more.

Tax equity between the city and the county: A reasonable effort was made between these two jurisdictions over the issue of the double taxation of city residents and businesses for services provided by the county for the benefit of the city.  While a tax-differential calculation is a good concept, is a $0.04 reduction in property taxes enough to resolve this issue?

Merge city and county services where appropriate: For several years I wondered if there was a cost efficiency to local government if the city were to annex all of Frederick County in under its umbrella, a strategy adopted by many cities throughout the country—Jacksonville, Florida and Indianapolis, Indiana to name two.  But after further review, I realized that creating bigger bureaucracy does not necessarily make for a more efficient government.  That said, the idea of merging the departments of the city and county water and sewer services, among others, could make sense.

2.  Serious pursuit of economic development.

We all know about the plans to complete the next phase of the Carroll Creek Linear Park, and hats off to the current administration for finding the funding to do so, but that alone is a mere fresh coat of paint to what else could be done.

Adjust expectations on hotel/conference center: The city has placed a great focus and expense on laying out guideline to attract a hotel/conference center for downtown.  And while studies that have been produced show how a 200 plus room hotel and 15,000 square foot conference center  will bring tremendous economic benefit to downtown, from the commercial real estate developer perspective none of the studies prove something of that size to be a worthy investment risk.  Lowering the sites on what is feasible now will make sense.

Complete airport runway expansion: According to my calculations, nearly $20 million has been invested in tower construction and property acquisition around the airport … not including the costs associated with the extension of Monocacy Boulevard.  That’s more than a big investment.  But still nothing has been done to complete acquisition of the easements required to lengthen the runways.  Imagine the economic benefit and revenue boost the city will gain from expanding Maryland’s second busiest airport!  This may be a challenge giving that the FAA is facing cuts from sequestration, but still worth pursuing.

Resolve unrealistic land use plans: Back in 2005 (I like to refer to the years around that time as the “Fantasy Years”), the City adopted a masterful novel called the Land Management Code.  Upon reflection and subsequent application (or lack thereof), it has become clear that many parts of that volume established unrealistic expectations that do not work for the new world order.  Consider the residential density formula for vacant downtown parcels … from a multifamily development perspective an increase could be warranted for certain core areas of downtown, which could provide the additional benefit of bringing more workforce housing to Frederick.

Better use of parking meters and decks, and onsite parking requirements: I could and should devote an entire blog post on this issue.  Meager efforts have been made in addressing how to generate enough revenue from meters to be able to finance the parking structure planned behind the headquarters of Frederick County Public Schools.  Imagine the incredible boost in property tax revenues the City of Frederick could realize from expanding development along the Carroll Creek … and the secret lies in two things: density and parking.

Resolve the sewer and water tap fees issue: Water and sewer tap fees are a significant hurdle to new service-sector businesses trying to locate downtown. Every commercial real estate agent in Frederick knows this is a common roadblock the stops prospective tenants and buyers cold. Even restaurateurs with the clout of Bryan Voltaggio struggle to overcome the expenses involved in opening new locations downtown.

3.  Fearless leadership and decision making:

For far too long the proverbial can has been kicked down the road from City Hall.  Much has been said about what has been accomplished; our next leader must be willing to truly address issues head on as the very fragile recovery continues.

At this point, I will give Mayor Randy the benefit of the doubt as a first term elected official, but I do think that he could have taken a stronger position on several of the issues listed above.  I believe that of this year’s crop of declared and would-be candidates all have the ability to lead.  But as the campaign gets more heated and the blood bath begins, let’s hope the strongest and best leader will emerge!

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and for Want2Dish.com.

Frederick City’s next mayor needs to bring fiscal order and a commitment to economic development.

 It appears that the dust has settled enough from the 2012 U.S.presidential election.  Maybe not for all; so let’s just say that while most are somewhere between fed up and infuriated with all the inside-the-beltway banter, it is time for many to place focus elsewhere.

For nearly 30% of the residents of Frederick County, it is time to start paying attention to the next political drama that is slowly unfolding as I “put pen to paper” for this blog post…actually to be more precise, I should say “tap fingers to iPad.”

Yes, in less time than it takes for a man and woman to conceive a child and bring it into the world, Frederick City voters will have gone to the polls for the 61st time to cast their ballot for a new Mayor and Board of Aldermen.

The Mayoral race is especially shaping up to be what one current city “alder-person” predicts will be a “blood bath.”

Let us consider the announced candidates and those who may well yet throw their hats—and “hand grenades”—into the ring.

On the republican side, there is current Mayor Randy McClement, who might face immediate past Mayor Jeff Holtzinger, who has told me that he may very well run again.

On the democratic side, the match-up to watch will be that of current Alderman Karen Young (wife of State Senator and former Mayor Ron Young) versus long-time Maryland House of Delegates member Galen Clagett, who is also a former Frederick County commissioner, as well as a local real estate mogul of sorts.

Among the yet-to-be-announced, there are strong indications that former Mayor Jennifer Dougherty may jump in for another run as a third-party candidate.

One of the great things about living is a community the size of Frederick County is that if one lives here long enough, he or she can get to know all the candidates very well.  In my case, I happen to know all well and consider each one a friend.  And since I live outside the boundaries of the city, I will not have to face that difficult behind-the-curtain decision on Election Day.

Be that as it may, as a 40-year member of this community, and someone who is active in the land and commercial real estate business, I do have a few thoughts on the platforms of whoever seeks the throne at City Hall.

There are three primary issues that I will be looking for on the platforms of the Frederick City mayoral candidates:

• serious commitment to—and a plan for—bringing the City of Frederick’s fiscal house to order;
• a no-holds barred commitment to economic development; and
• strong leadership qualities along with the courage and willingness to stop “kicking the can” down the road.

In Part II of this post I’ll dig into these three issues in depth, identifying critical areas that could use some attention from the city’s next administration.

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com  and for Want2Dish.com.

A panel of leading Frederick commercial real estate professionals analyzes the market.

The Frederick County Office of Economic Development recently hosted a round-table discussion about the health and future of Frederick’s commercial real estate market, and I was invited to be a panelist.

I was joined by several esteemed colleagues, including:

Karl Morris, Director of Development, Matan Companies;

Gary Large, VP of Commercial Development, Ausherman Properties;

Jim Railey, President, Heritage Properties; and

Rick Farren, Senior Vice President, McShea & Company, who served as moderator of the group.

Our discussions covered the gamut of Frederick commercial real estate, from activity in the commercial real estate market past and present to apartment housing to Maryland’s failure to attract large employers.

Following is a snapshot of the main points of our debate.

The Big Picture

Karl Morris of Matan started the discussion by providing statistics that throws activity inFrederick’s commercial market—before and after the recession hit—into stark relief:

                                                     2003-2007                               2008-2012

Office Space Rentals             700,000 SF                                   75,000 SF

Flex Space Rentals                 710,000 SF                                 624,000 SF*

Industrial Space Rentals     1,000,000 SF                                 149,000 SF

*Total included 600,000 square feet leased to Wells Fargo & National Cancer Institute alone.

Apartments: The Next Big Thing is Already Yesterday’s News

 Apartment (multifamily) projects have exploded in theU.S. as distressed and foreclosed homeowners, along with skittish young adults, seek rental housing in droves.  Apartment vacancies are at a low 3.5% inFrederick.

According to Gary Large of Ausherman, there are three different apartment projects in the pipeline in Frederick County, which will bring a total of 1,000 new units.  Walnut Ridge, with 250 units, will be the first new apartment project in Frederick in 10 years.

Ausherman is finding a surprising niche market for apartments in Whittier:  divorcees.  Projects on the south side of Frederick, however, are drawing a younger market segment.

Panelists agreed that anyone trying to start a multifamily project at this point will be too late to the game to enjoy significant returns.  The Frederick market will be saturated by the time those units would hit the market.

Karl Morris noted during this discussion that while housing appears to be recovering (at last), it’s important to remember that there are still a great many people in the U.S. who can’t finance a home or are afraid to invest in homeownership.

It’s the Jobs, Stupid

With Bechtel moving 625 employees from Frederick to Northern Virginia, the office market is left with an even bigger hole to fill: Frederick now has a total of 800,000 square feet of unoccupied office space in the southern end of town alone.

Gary Large of Ausherman noted that with office rents in Rockville so low now, that a significantly higher number of Frederick residents are driving south to work than were prior to the recession.

The panelists agreed that Maryland is becoming less and less attractive to large national tenants, who more often than not choose to locate in Virginia instead of Maryland.  If there isn’t a significant effort by O’Malley and his team to effectively recruit new employers, the office vacancy rates in Frederick will remain high.  As Gary noted, “We can’t fill 3 million square feet of unoccupied office space with companies from Frederick.”

It doesn’t help that office space use overall is evolving, as more and more employers are hiring employees who work from their homes.

Flex is the Future

A member of the audience asked a great question:  “What happens to flex if we aren’t making stuff anymore?”

Danny Severn, a Sales Representative from St. John Properties shared that about 50-60% of their flex shells are now ultimately fitted out as office space versus for industrial or warehouse use.

Flex shells are much cheaper to rent and to finish than traditional Class A office space, and many businesses feel compelled to choose this no-frills option in an uncertain economy.

Karl Morris shared that Matan is banking on the “build to suit” flex lots like those in Wedgewood on the south side of town.  From an owner-user perspective, these properties are “shovel ready”—infrastructure is already in place to break ground, including water, sewer, traffic, and APFO.  Riverside Research Park is another example of this.

Frederick is a Safe Bet

The panel noted several reasons to be very optimistic about the future of Frederick’s commercial real estate market:

Ft. Detrick: While BRAC hasn’t brought as many jobs as hoped for, the improving economy may bring a resurgence of contractors and start-ups to the area related to Ft.Detrick.  The old buildings and labs at Ft.Detrick are very expensive to retro-fit, which means there is a good chance employers will choose to build out spaces in nearby Riverside Research Park instead.

Health and Bio Tech: Frederick has wisely cultivated a niche of health and biotech companies.  No one is arguing that growth in these industries has been—and should continue to be—explosive.  (The trick will be keeping these companies here once they outgrow start-up phase and become substantial employers.)

Frederick is a Jewel:  Gary Large concluded the discussions with this thought:  “Frederick still holds the quality of life card.”  And he is right. Frederick is the complete package:  tranquil countryside, excellent schools, and a beautiful, vibrant downtown with a thriving arts culture and world-class restaurants.

So, to sum it all up: if our governor will work in earnest to improve the balance between government and private employers in Maryland, Frederick’s commercial real estate market is poised to enter a sustained recovery.

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com.

A big picture of Frederick County’s commercial market, including the top deals of 2012.

MacRo’s “Top 5 Commercial Real Estate Sales” blog posts are among our most popular with readers.

We decided to do a little something different for the 2012 commercial real estate sales recap.  We love data, statistics, and charts here at MacRo, so we gathered a fairly comprehensive list of the commercial real estate sales recorded in Frederick County for 2012, and sorted them by market segment.

This is an exercise we plan to repeat each January, as a method of tracking trends in Frederick’s commercial real estate market.  In the meantime, what do the numbers reveal in our inaugural year?

Based on the raw data we examined, about $200 million worth of commercial real estate changed hands in Frederick in 2012.

The market sector with the highest number of transactions yielded almost the lowest dollar volume in sales: mixed residential/commercial properties.  There are the small residential-sized mixed-use buildings lining the streets of Frederick City’s historic downtown and the county’s “main street” municipalities such as  the Golden Mile, New Market, Middletown, and Thurmont.

Office and warehouse sales and leasing are the lifeblood of the commercial real estate market here in Frederick, much like everywhere else.

We learned that the Holiday Inn at FSK Mall and the Holiday Inn Express were foreclosed on this past year.  (Were we the last to know about this?)

And of course we ranked the sales to share MacRo’s list of the top 5 commercial real estate sales in Frederick for 2012:

1) $20,910,000            Hilton Garden Inn – 7226 Corporate Court

Hospitality properties were hit very hard by the recession, as evidenced by the foreclosure of Frederick’s own Holiday Inns.  Investors are shedding these properties, and bargain hunters have been snatching them up in anticipation of improved revenues as the economy begins to build some steam.  RAA Management purchased this hotel from LTD Management Company in July.   The hotel is 80,000 SF in size and has 143 rooms ($261.38/SF; $146,244/room).

2) $16,511,000            PNC Bank Building – 110 Thomas Johnson Drive

Greenfield Partners purchased this office building in a portfolio sale worth $161,900,000 from Corporate Office Properties Trust in July.  The building is 122,491 SF in size ($134.79/SF).

3)  $14,642,486           Tranquility at Fredericktown – 6441 Jefferson Pike

Tranquility at Fredericktown was sold twice this past year.  In June of 2012, it was sold to investor/developer Russell Horman for $8,403,079.  He promptly flipped the property in December in a portfolio sale worth $85,100,000 to Capital Health Group.

4)  $9,600,000             Brooklawn Apartments – 1001 Carroll Parkway

Multifamily properties continued to be hot with commercial investors this year, so it’s no surprise that an apartment building made Frederick’s top 5 in 2012. ZOM, Inc., a real estate investment firm in Florida, sold Brooklawn to an investor in Massachusetts in December.  The building is 113,285 SF and has 86 units ($84.74/SF).

5)  $7,150,000             Frederick Brick Works – 184 East South  Street

Frederick Brick Works, Inc. purchased this property in October.  The property consists of a 13,362 SF industrial warehouse building situated on 25 acres of land zoned MU1 ($535.10/SF).

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com and Want2Dish.com.

 This current issue of the MacRo Report is being distributed to more than 15,000 residents and others who are interested in Frederick County, Maryland land and commercial real estate news and information.

Two Critical Election Issues

The following MacRo Report entry is written by Rocky Mackintosh, President of MacRo, Ltd. regarding our current local political market

In the midst of a very contentious Presidential campaign, some Frederick County, Maryland voters may be overlooking two significant subjects on the November 6th ballot.

BOARD OF EDUCATION RACE:

This is an important taxpayer issue since nearly 60% of property tax revenue is being entrusted to Frederick County Public Schools each year. Five candidates are seeking three openings on the seven member board. While voters are asked to cast a ballot for three of the five, I can only endorse Colleen Cusimano and Anthony Chmelik. Both of these candidates will bring strong fiscal experience and fresh perspective to improving education for all our students. The other candidates are more representative of the current status quo majority. I feel so strongly that I recommend supporters ONLY VOTE for CUSIMANO and CHMELIK, and leave the third choice blank.

CHARTER GOVERNMENT:

Question A on the ballot will ask voters this simple question: “Do you approve of the adoption of the Charter for Frederick County proposed by the Frederick County Charter Board?” As one who served as a member of the Charter Board, our county has grown and matured to the point that the concept of a five official committee running the government is no longer functional. The adoption of Charter Home Rule will implement an executive form of government and bring much
needed accountability, transparency, stability and efficiency to Frederick County Government. VOTE FOR on QUESTION A.

The Pressure of Pent Up Demand

There is one question that I am constantly asked: “How is the real estate market?” Whether they are actively engaged in real estate ownership or not, everyone wants to know. A healthy real estate market plays a significant role on the strength of our economy and provides revenue for government funding. Over the last five years of difficult economic adjustment, the real estate market has endured, but property has continued to change hands. While economic skepticism looms over the job market, tax policies and national debt, Frederick County has found enough stability to renew optimism in real estate investment.

Consider the excitement around the idea of a downtown hotel and conference center, as well as the growth of Frederick’s residential rental market and medical community … not to mention vacant store-front along Market Street is non-existent.

The MacRo team is engaged in assisting our clients in these and other exciting opportunities. Please let us know how we may be of service to you.

Whether you are looking for retail, office or general commercial space, check out some of our new or current listings or give us a call at 301-698-9696.

Click here to download the complete PDF version of this fall’s MacRo Report!

The following summation is from a Gazette.net news article by Katherine Heerbrandt

According to a viability study released by Crossroads Consulting, hotel developers should at least consider investing in a downtown hotel. According to a 2012 study, Frederick could support a full-service hotel and 15,000 square feet of meeting space. As reported: “The hotel is expected to generate an estimated 280 jobs, $16 million in direct spending, $9 million in personal earnings and $1.9 million in state and local taxes.”

Click Here to read the complete article.

AD-Hoc Committee recommends tiered tax system, escalating fines, and receivership on unkempt real estate within the City Frederick.

So great moreover is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community. 

~William Blackstone

Sir William Blackstone was an English jurist, judge, and pre-eminent legal scholar during the eighteenth century. He wrote the Commentaries on the Laws of England, one of the most influential legal texts written during colonial times.

Blackstone’s Commentaries played a large part in shaping both our nation’s Constitution and the Declaration of Independence.

Blackstone and his contemporaries held fast to the belief that the right of property ownership is a moral right, much like life, liberty, and the pursuit of happiness.

And while many argue that Americans often have difficulty distinguishing between the pursuit of things and the pursuit of happiness, I leave it to more philosophical minds than mine to debate that point …

Suffice it to say that Americans take property rights very seriously, and only under extreme circumstances and as a means of last resort will the government act through eminent domain to impinge upon those rights and seize property – for example, when major laws are broken by a property owner.

(Most of the time when we hear the words “eminent domain” we think of property that has been acquired because it was interfering with efficient traffic patterns … and that is because Americans also take the right to travel everywhere swiftly by automobile very seriously.)

For the most part this system works very well … except when it doesn’t.

There is always going to be a percentage of the populace who don’t know how to be, or don’t care to be, good neighbors and property owners:  refusing to maintain or repair properties, allowing façades to deteriorate, leaving properties in premier locations vacant … the list goes on.

In a residential setting, this is generally a problem only to those who live within the impacted neighborhood. Over the last 40 years most new residential real estate developments have been encumbered by covenants that often go deeper to reinforce property maintenance as well as zoning laws.

When it comes to commercial real estate, however, the ripple effect of a “bad neighbor” can have a much larger – and far more economic – impact.

Because men like Blackstone were able to articulate and defend so eloquently “that sole and despotic dominion which one man claims and exercises over the external things of the world,” municipal governments often feel that their hands are all but tied when it comes to dealing with irresponsible commercial landlords.

But the winds have been shifting. Voters are steadily granting state and local governments greater responsibilities for stewardship over the health of regional economies. The trend now is to take a harder look and a more creative approach to solving the problem of commercial blight on a local level.

The City of Frederick formed the Blighted and Vacant Property Ad Hoc Committee in January of 2012. This group was charged with developing alternatives to remedy some of the eyesores and under-utilized gems that prevent our precious and vibrant downtown area from reaching its full economic potential.

The committee delivered their report to the City of Frederick Aldermen on Friday, July 6, 2012. In that report, the committee carefully defined blight and vacancy, and recommended that the city develop the means to better report and track vacant and blighted commercial properties to better enforce code violations on said properties.

More importantly, the committee recommends developing and adopting some intermediate “tools” between the extremes of mere code enforcement and eminent domain, including:

• Adopt a blighted building property tax which assesses a city property tax of 5 times the base rate on properties that fall under the city’s definition of “blighted” for longer than 1 year. To put that into concrete terms, a “blighted” building assessed at a value of $800,000 would be taxed $29,200 per year ($3.65 per $100 property value) instead of $5,840 ($0.73 per $100). This would put a significant dent in any future profits a real estate speculator would realize when (if?) the market turns.
• Adopt a compounding or escalating fine system for repeat code violators. Ditto for “significant dent in profits.”
• Provide lien or fine waivers for new owners of blighted property who agree to rehabilitate and rent the buildings.
• Adopt property tax credit programs as an incentive for investment in blighted and vacant commercial properties.

And in the event that no recourse is left to the City but to take blighted properties from uncooperative or incapable owners…

• Adopt a real property receivership program. This is a “faster, cheaper, and lower liability” alternative than traditional seizure under eminent domain, which place expensive liabilities on a city’s balance sheets.  It instead allows a third party to manage, rehabilitate, demolish, market and sell distressed commercial assets.

Our fair city has an overall commercial vacancy rate that is low relative to comparable cities, but we all know the most notorious examples of urban blight and vacancy in Frederick…the so-called “dragon lady” who owns the decaying Asiana Building in the 100 block of North Market nestled smack in between Zoe’s Chocolate Co. and Acacia … and there are other long-time offenders.

The Aldermen of the City of Frederick will hold a workshop to discuss the Blighted and Vacant Property Committee’s findings tomorrow, July 11.

I expect interesting questions to be raised regarding the degree of power city officials will seek over Blackstone’s definition of real property rights.

While it is clear that this task force recommendation was initiated by the lack of cooperation of a select few downtown property owners, the larger goal here is intended for the greater good over the long haul.

The Frederick community has had a very lively history of debating Blackstone’s version of real property rights over the last twenty years relating to use and zoning regulations. This matter addresses issues from a somewhat different angle and in my opinion a very worthwhile debate for our citizenry to take on.

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.