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Capital Business
Posted at 01:43 PM ET, 09/20/2011

O’Malley choice crowns big winner, big losers in Prince George’s real estate

Maryland Governor Martin O’Malley held a press conference Tuesday to announce that he would move the state’s housing agency from Crownsville to New Carrollton, a seemingly boring proclamation – state agency moving!! – but one that held incredible importance to developers in Prince George’s.

Imagine having bought some land near one of Prince George’s many underdeveloped Metro stations five years ago, when O’Malley promised to move the Department of Housing and Community Development from Anne Arundel County to Prince George’s. The economy was riding high, the federal government was aggressively leasing and the housing department’s lease had been promised to someone just like you. Lots of options to make a mixed-use development work.

Then look what happened. The economy collapsed, scaring away the already thin private sector tenants capable (or interested) in leasing Class A office space in Prince George’s. In June, the federal government effectively cancelled a search for more than 1 million square feet for the U.S. Department of Homeland Security – a deal Prince George’s had a leg up on because of proximity to St. Elizabeth’s hospital, where the rest of DHS is headed.

In August, the feds opted to keep nearly a million square feet of leased space for the Department of Health and Human Services in Rockville over the complaints of two Prince George’s developers and some questions from the Government Accountability Office.

All that was really left in the short-term for the developers who had made bets on Prince George’s was the housing agency. For the team O’Malley picked, calling itself “Grand Central Development,” the lease will be the catalyst for a 700,000-square-foot development and is being heralded by County Executive Rushern Baker for making his transit-oriented development promises come true.

With Forest City and Urban Atlantic already planning a major mixed-use project at New Carrollton, much of the public and private sector efforts toward new development are focused there. Baker told said yesterday that, “Eventually, I know we will see development around Suitland, Largo and Branch Avenue.”

But for the landowners and developers at those other stations, it could be a long wait.

By  |  01:43 PM ET, 09/20/2011

 
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