Friday, February 14, 2014


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

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

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

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

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

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

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