Correction:

An earlier version of this article incorrectly described the sale price of land Montgomery County recently sold to a Gaithersburg biotech company as a fraction of what the county had paid for it. The $3 million sale price was a fraction of the $9 million that the county estimated the parcel was worth in fiscal 2009, but county spokesman Patrick Lacefield said the county paid $10 for the site in 1978. This version has been corrected.

Montgomery officials wrestle over economic development

The Montgomery County Council is considering a slew of bills intended to boost economic development by making the county more business friendly. But some of the bills are pitting legislators against County Executive Isiah Leggett (D).

Council members are trying to assert more control over economic development policies, which largely fall under Leggett’s authority and which some business owners have said are too burdensome.

(Katherine Frey/THE WASHINGTON POST) - Montgomery County Executive Isiah Leggett during his 2010 inauguration. Recent moves by the Montgomery County Council are trying to curb his power over economic policy.

One proposal would explore having the private sector play a more direct role in economic development programs and would give the council more power in allocating incentive funds to local businesses.

“I think business knows business better than government knows business,” said Council President Roger Berliner (D-Potomac-Bethesda), who introduced legislation Tuesday that would require the county to explore a bigger role for the private sector. “I’m trying to get us to move toward that approach to the best as I can.”

Leggett said he is open to researching other models but worries that the bills send mixed signals to the business community. “We have to be very careful about the message that we send,” he said. “When you look at them collectively, it just seems that the overall message is in conflict with the goal we want to achieve.”

Some of the bills would aid small businesses. One would create a small-business loan program; another would place restrictions on big-box stores.

Other measures would add a layer of legislative oversight to Leggett's economic development decisions. One piece of legislation, strongly opposed by the Leggett administration, would allow legislators to veto large county land deals. The bill follows a recent controversial closed-door deal between county officials and a Gaithersburg biotech company. County officials sold a property in Rockville to the company for $3 million — a fraction of what the county had estimated the parcel was worth in fiscal 2009.

County Attorney Marc Hansen argued in a memo released Monday that the bill violates the county charter. He said the County Council can’t reject specific contract terms, such as price, rent and economic incentives. A council attorney, Michael Faden, disagrees with that interpretation.

Leggett would not say whether he would veto the bill, but said he thinks it would create greater confusion. “It will be more burdensome, more regulatory, more bureaucratic,” he said.

In recent months, local business leaders have complained that county taxes are too high, that its bureaucracy is too complex and that county officials have not been sufficiently accommodating to keep local businesses.

The complaints hit a fever pitch last fall, when the County Council seemed poised to to approve a resolution urging less spending on war and more spending on social programs. The proposed resolution upset Lockheed Martin, a Bethesda-based defense contractor, and was never brought up for a vote. Around the same time, the council considered a bill that would have required big-box stores to negotiate directly with community groups on public benefits. That bill, which Leggett opposed, was put on hold.

It was the latest in what some county officials say is a growing divide between the council and Leggett over economic development. Officials pointed to a deal to bring Costco to Wheaton two years ago as the beginning of the rift. After discussions with a private developer, Leggett lobbied for a $4 million subsidy to help lure Costco. Leggett said at the time that the store was important for the area’s redevelopment. Although some council members expressed concerns about the deal, the council approved it.

Today, some are still question the wisdom of the subsidy.

“Really? Four million dollars for Costco? Is that really the biggest economic development project we can get?” said an official who spoke on the condition of anonymity. “There is no strategic vision for marketing in this county.”

Steve Silverman, the county’s economic development director, said Leggett and the County Council are usually unified in their vision for economic growth and that only a few deals have been controversial over the years.

“I think this is the council’s way of flexing muscles and reminding everybody that they have a role to play, and I don’t think anybody disputes that,” Silverman said. “I think as long as you have a county executive and nine council members, you’ll have some differences of opinion about how to create jobs and expand the tax base.”

In recent months, Leggett has made changes. He is pushing for a more streamlined approach to building permits and land development; he appointed a deputy economic development director to lead marketing efforts; and his staff is working on an economic development Web site. At a news conference Monday, Leggett touted a county tax credit program for the local biotech industry.

But Leggett is also advocating for a permanent tax increase on energy and fuel usage, a proposal that has angered the business community.

“Over the long haul, how will it be possible to attract high-tech biotech companies and expand our health-care facilities here” when many of those companies require lots of energy, asked Gigi Godwin, president and chief executive of the Montgomery County Chamber of Commerce.

The tax hike, which is included in Leggett’s proposal for the fiscal 2013 operating budget, will be decided by the council in May.

 
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