On Wednesday morning, Prince George’s County Executive Rushern L. Baker III stood before more than 80 small business leaders at the county’s economic development offices in Largo and repeated a plea he began making six months ago: that the county needed an economic development fund he could use to issue grants and loans to county businesses.
Fresh off losing out on a nearly 1 million-square-foot Department of Health and Human Services lease, and with the county council’s legislative session set to begin Tuesday, Sept. 6, Baker is making a renewed effort to business leaders to back his plans to create a $50 million economic development investment fund that would allow him to issue loans and grants to county businesses.
Baker proposed the fund during the last session only to withdraw it after the council suggested requiring additional steps of approval. But Baker’s staff says winning passage of the idea is his top legislative priority this fall and he is digging deeper to elicit support from the private sector. Less than a week before the meeting with small business leaders, Baker stressed the importance of the fund to a room full of real estate developers gathered at National Harbor. Among those in attendance were Milton V. Peterson and his sons, developers of National Harbor; Vicki Davis, president of Urban Atlantic and one of the partners behind a 39-acre project at New Carrollton; and Walter Petrie, chairman of Petrie Ross, developer of Woodmore Town Centre at Glenarden.
“What we need from the business community is to communicate how that fund has to be structured and how it has to operate to be attractive to a business owner who wants to see capital,” said David Iannucci, Baker’s assistant deputy chief administrative officer for economic development. “That means obviously that decisions have to be made in days, not months.”
Iannucci said not having the fund may have played a role in losing the HHS deal. Although Prince George’s offered millions of dollars in tax increment financing, in which the county issues bonds backed by future tax revenue, Montgomery County offered a subsidy worth between $15 million and $20 million. The fund, “clearly would have made it a closer call, it might have made it harder to say no,” Iannucci said.
Whether the fund could have helped secure HHS, it is now shaping Baker’s efforts to win the fund’s approval. Michael J. Smith, vice president at LCOR, one of the county’s bidders for the HHS deal, said that offering the lowest cost had become paramount in winning federal leases from the General Services Administration.
“What we are attuned to is GSA’s sensitivity to the lowest cost of occupancy,” he said. “From that standpoint, any economic development subsidy is something any developer would want to highlight and use to underwrite a rental rate for a GSA lease.” Peterson issued a statement through a spokeswoman saying he was “absolutely supportive” of Baker’s fund. “During difficult economic times such as this, jurisdictions have to do more to attract business and as we understand it, that’s the goal of this program,” he said.
But despite Baker’s assurances that the fund as he proposed it would benefit a wide range of businesses, for needs from equipment purchases to facade improvements, he has not won the support of all of the county’s industry groups. Rhonda Slade, president of the Prince George’s County Chamber of Commerce, said her group has not taken a position. “There hasn’t been much discussion that I’m aware, at least with my members,” she said. Michael Graziano, director of government affairs for Prince George’s County Association of Realtors, said the fund wasn’t something the group would oppose, “however we have not taken a position.”
But Jim Estepp, president and chief executive of the Greater Prince George’s Business Roundtable, is backing the idea and said, “all the indications that we’re hearing are that things are moving in a positive direction.”
“The belief is that it was a terrific idea and that it sends a great message that we are open for business and we are willing to put our money where our mouth is,” he said.