Commercial growth spurs building boom

Office, warehouse, retail space being constructed

January 28, 2007|By Larry Carson | Larry Carson,sun reporter

Commercial construction in Howard County is booming - at 1999-2000 levels - according to Richard W. Story, chief executive officer of the county's Economic Development Authority.

In concrete terms, that means 1.5 million square feet of office, warehouse and retail space under construction, with another 2.9 million square feet being planned.

In addition, Story said, the county is likely to gain a corporate headquarters moving from another county, though he would not identify the company.

The 600-employee firm is planning to build a 120,000-square- foot "signature" building in the Gateway Office Park.

The announcement is expected by summer, said Story, who added that the average salary at this firm is $90,000 a year.

"My job is to be an optimist because I sell Howard County. But I'm as optimistic as I've been in a number of years," Story said at a recent meeting of the county's Spending Affordability Committee.

Another indicator of business confidence, Story said, is that developers are planning a seven-story, 200,000-square-foot office building in the Gateway park without any space leased ahead of time.

They are going ahead "on the assumption that the Lord will provide," he said. Since 2002, the vacancy rates for office buildings has shrunk, from 16.6 percent to 11.7 percent, and industrial vacancies have been halved in the same period.

Another quarter-million square feet is going up as a six-story building in the Montpelier Research Park in the 7600 block Montpelier Road.

Ronald Weinstein, the county budget director, said the activity is welcome, though the huge increase in house prices over the past few years has made commercial projects a smaller proportion of the county's total assessable base.

It now represents about 18 percent or 19 percent of the total, but the uptick in commercial construction is an important part of the county's revenue picture.

"To me, it means we're going to continue to have growth in the property tax revenues," Weinstein said.

"It's important because it has less of a draw in county expenditures because there are no children going to school" as in residential developments, he said.

The residential portion of the tax base is five times the size of the commercial portion, Story added.

"Residential is bigger and growing faster," he said.

Story said growth in the financial services and health care industries is primarily fueling the commercial construction boom, and some of the buildings are the result of job growth at the National Security Agency at Fort Meade in Anne Arundel County.

"We're the bull's eye between Baltimore and Washington," Story said, and the jobs coming to the area as part of the federal Base Realignment and Closure process will only boost the trend further.

As open land available for development becomes more scarce in the county, redevelopment will become more common - with the much-discussed plans for central Columbia the prime example, Story said.

"Surface parking in Howard County will be a fond memory. It's going to be exciting," Story said, explaining that as more buildings are constructed on what are now parking lots, multiple-story garages will have to be built to hold vehicles.

State property assessor Howard Levenson talked more about the residential housing market.

Despite frequent news stories about slow home sales, Levenson said, "now we're in a normal market."

Prices haven't decreased, he said. "The number of sales is what has decreased."

Despite huge assessment increases in western Ellicott City and the River Hill area on homes revalued in 2006, Renee Mierczak, assistant supervisor of assessments for Howard County, said the number of people appealing their new assessments is about on a par with last year.

"I don't think values are going to go down. The tax base will continue to rise," Levenson told the group, which is studying the county's economy in preparation for recommending how much borrowing County Executive Ken Ulman should propose for next fiscal year.

Story said one offshoot of the sales slowdown in houses is a tightening rental apartment market, partly because people uncertain about buying a home are waiting and renting.

One-bedroom apartments are renting now for $1,000 and higher, and larger units cost up to $1,800 a month, plus utilities and parking fees, Story said.

larry.carson@baltsun.com

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