Issues of Growth & Development Series

Column #41 — Business Expansion and Residential Growth in 2004

Business Development Office & the Fort Detrick Alliance

About two years ago members of our board visited the Aberdeen Army Alliance which was formed as a IRS 501 C (4) corporation, has about 60 corporate sponsors, and is sponsored by grants from the Maryland Department of Business and Economic Development, and County and local Governments. They opened a Business Development Office to help area businesses to work with and assist with the attraction of government and industry organizations to increase the economic viability of the Proving Ground.

We were impressed and excited about this concept. As a member of the Alliance Board, I was also pleased that the initiative was also taken up by Congressman Bartlett:

The effort started with on an outstanding meeting held at the Longworth Congressional Office Building downtown DC on 29 April 2004 and followed by a Procurement Workshop on 17 May 2004. I commend Congressman Bartlett for making this effort. [FNP/FBW, May 24, 2004]

Now it is a reality and with the efforts of Congressman Bartlett to start this, support of two Maryland senators, Barbara A. Mikulski and Paul S. Sarbanes, it happened in months. Future columns will deal with the unique nature of the Fort Detrick Business Development Office (FDBDO):

Fort Detrick awarded a $2.2 million contract on January 5, 2005 to Data Solutions & Technology Incorporated from Lanham, Md. to manage a newly created Business Development Office that will provide a myriad of contracting needs and easier access to industry. [FNP, January 13, 2005, page A-12]

The Fort Detrick Alliance is pleased with these developments and supports the concept. Some things that make this FDBDO unique:

· Physical One-Stop Shop. This means that the business does not have to go the main gate, but can do business with the Federal government in one place.

· Single Point of Contact. From a business between Fort Detrick, Industry, Academia, Frederick City/County, and the state Maryland.

· Government/Industry Contact Center. The office will help businesses work with the military and Federal offices (including the National Cancer Institute, National Institute of Allergy & Infectious Diseases, and Homeland Security. Think of it, all in one place for doing business with 38 and more government agencies at Fort Detrick.

I commend all of the fine work done by all to make the new FDBDO and the Incubator a reality. We are all excited about these new methods of getting business and government together.

Residential Lack of Growth

As new people come to Frederick, there will be a significant demand for housing. Over the past two years, I have written about issues of housing, the exponential increase in cost and the need for housing as our county expands. In a series of market research newsletters on economic development and growth over the past 15 years, I have closely monitored the construction. We need better planning with business involvement to assure that we don’t loose out to other counties…builder flight is a reality and more cars on the interstate will become a future no one likes. If we loose our advantage of proximity to the economic engines down I-70 and I-270, people will not live in Frederick County, but live in western Maryland, West Virginia, and Pennsylvania. Is that what we want?

Now, let’s see what is happening to get housing in Frederick. This is my summary of 2004 for residential new home (single family, condominiums, and townhomes) construction.

Residential Builders

A total of 47 new homes builders built more than two homes in 2004. The ranking for these builders follow in table 1.

For many years Ausherman Homes, a local builder (now owned by Drees Homes) has been #2 behind Ryan. This is not the case in 2004, however both of these builders have fled to other counties in this area. There are fewer lots, fewer subdivisions, and fewer opportunities for the smaller builder. Others are doing the same and the landscape is changing each year.

Cost of New Homes

While the estimated cost of construction is nowhere close to the actual sales price, it is interesting to note that there were 26 homes with estimated costs over $500,000 and one home and four were over one million dollars (one was more than $2.2 million), ouch! This does not bode well for affordable housing.

Table 1. Frederick County Homebuilder Ranking (2004)

Where are Homebuilders Building?

All over the county. There are so many fewer lots in planned subdivisions that the patterns have changed, of the 1,050 units permitted, only 870 units were built in the top 30 major subdivisions. See table 2 for the 2004 ranking…Urbana leads by a bunch.

Table 2. Frederick County Subdivision Ranking (2004)

Where is Homebuilding Headed?

The following graphic tells the story. Since 1980 when I started collecting permit data, the trend for new home permits has had a low of 804, a high of 2,847, and for 2004, we are down to 1,150. The trend is obvious.

Table 3. Frederick County Residential Construction (1980-2004)

Summary

The Fort Detrick Business Development Office opens more opportunities to all business and more businesses will come, but where will the employees live? Our data for 2004 tells us, not here!! Fewer homes, higher prices! As I have been saying for two years, we have a crisis and something must be done by residents, business, and our government agencies.