{"id":9203,"date":"2018-01-11T07:00:31","date_gmt":"2018-01-11T12:00:31","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=9203"},"modified":"2018-01-11T12:46:46","modified_gmt":"2018-01-11T17:46:46","slug":"moco-after-discovery","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=9203","title":{"rendered":"MoCo After Discovery"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

Word of Discovery Communications\u2019 exit from Silver Spring has exploded like a bomb in local politics, prompting attacks by the state Democrats on Governor Larry Hogan<\/a> and two outsider County Executive candidates on the county government<\/a>.\u00a0 But the answer to the real question is not to be found in political soundbites: where does MoCo go from here?<\/p>\n

Let\u2019s start by acknowledging the unusual nature of Discovery.\u00a0 The only reason the company was in MoCo to begin with is that its founder, John Hendricks, moved here in his 20s and started it at age 30<\/a>.\u00a0 If Hendricks had instead lived in, say, Philadelphia, the company would have been started there.\u00a0 Discovery was largely a stand-alone organization that was not surrounded by peers.\u00a0 When Hendricks retired as Chairman three years ago, it was probably inevitable that the company was going to move with media-packed New York City as a prime option.\u00a0 Accordingly, no one your author knows who has been associated with Discovery is surprised at its exit.\u00a0 While the company was important to Silver Spring, the departure of a firm like United Therapeutics, a key player in the local bio-tech industry, would have been more troublesome because of the county\u2019s long-time efforts to build up that sector.<\/p>\n

That said, Discovery will leave a big hole in Downtown Silver Spring.\u00a0 Its 1,300 employees are hugely important to Silver Spring\u2019s lunch scene and happy hour crowds.\u00a0 (Anyone who sees the sheer number of people walking through the Georgia Avenue crosswalk near the building to access Ellsworth Place can appreciate this.)\u00a0 The building itself was constructed to house one tenant.\u00a0 Subdividing it for multiple tenants could be costly and challenging, thereby complicating its reuse.\u00a0 Discovery is looking to sell it but it may not be occupied for a while.\u00a0 Finally, the viability of Silver Spring as an employment center may be questioned by developers and tenants alike.\u00a0 Will the central business district continue to be a jobs base or will new development be overwhelmingly residential, thereby cementing Silver Spring as a bedroom community for D.C.?\u00a0 And could that worry be applied to most of the rest of the county?\u00a0 It\u2019s telling that the two most prominent new office buildings in the pipeline, the Park and Planning headquarters in Wheaton and the new Marriott headquarters in Downtown Bethesda, are supported by public money.<\/p>\n

Aside from the usual political elbow-throwing, the reaction of the county has focused on the financial incentive it offered to Discovery to stay.\u00a0 County Executive Ike Leggett said in a statement, \u201cThe County and State made a substantial proposal designed to accommodate Discovery\u2019s challenges. Together, we were ready to provide considerable incentives to retain their presence in the County.\u201d\u00a0 Bethesda Magazine<\/a> quoted Leggett as saying, \u201cThe incentive package was one of the largest offered to a company during his time in office, although he did not reveal specific details about the package Tuesday.\u201d\u00a0 We hear it was in the same ballpark as the $22 million offered by the county to retain Marriott<\/a> with more money coming from the state.\u00a0 Notably, New York State offered no incentives to attract Discovery<\/a>.<\/p>\n

The county\u2019s reliance on corporate welfare for economic development is one of the great untold local stories of the last few years.\u00a0 Business incentives, usually contained in grants convertible to loans when job targets go unmet, are disbursed through the county\u2019s Economic Development Fund (EDF).\u00a0 They are approved in secret under an exemption from the state\u2019s Open Meetings Act<\/a>.\u00a0 Residents do not learn of the amounts spent or the recipients\u2019 identities until after the agreements are signed.\u00a0 Summary details are available only in annual<\/a> EDF<\/a> reports<\/a> released during the County Council\u2019s budget process.\u00a0 Aggregations of those reports show that the county has approved 49 incentives totaling $88.3 million between 2012 and February 2017, of which 35 incentives worth $79.7 million were used for retention.\u00a0 That\u2019s right, folks \u2013 over the last five years, the county agreed to pay almost $80 million to existing employers to stay.<\/strong>\u00a0 Six of those incentives consist of annual disbursements payable over periods ranging from six to fifteen years, thereby continually weighing on the tax base.\u00a0 For the sake of comparison, the county is spending $80 million for libraries and recreation combined this fiscal year<\/a>.\u00a0 Just this month, the County Executive has proposed a mid-year savings plan of $60 million<\/a>, including a $25 million cut for MCPS, while corporate welfare remains untouched.<\/p>\n

Since 2012, MoCo\u2019s corporate welfare has skyrocketed.<\/em><\/p>\n

\"\"<\/a><\/p>\n

Is this really working?<\/p>\n

MoCo should be an economic development leader.\u00a0 We have tremendous advantages, including a large federal presence, a highly educated workforce, good schools, lots of investment in transportation projects (including the Purple Line), substantial wealth in some of our neighborhoods<\/a>, low crime and virtually no public corruption.\u00a0 Few localities in the nation can say they have all of these things.\u00a0 But instead of being a growth leader in the Washington area, the county\u2019s total employment growth of 3% between 2001 and 2016<\/a> ranked 20th<\/sup> of 24 Washington-area jurisdictions measured by the U.S. Bureau of Labor Statistics.\u00a0 MoCo\u2019s jobs base and its real per capita personal income have not recovered from the Great Recession.\u00a0 And now our economic problems have contributed to a $120 million budget shortfall<\/a>.\u00a0 We\u2019re not leaders, we\u2019re laggards.\u00a0 We must do better.<\/p>\n

Discovery is headed out the door, but if we want to create the next generation of Discoveries, we are going to need a more creative and disciplined economic development strategy than relying on bribes to retain big employers.\u00a0 We are going to have to save tax hikes for desperate times and not pass them simply because we\u2019d like to spend money.\u00a0 We are going to have to invest more in transportation and education and pay for it by restraining growth in the rest of the budget.\u00a0 We are going to have to do things like ending the liquor monopoly, directing more of our county reserves into community banks where they can finance local job creation, cutting impact taxes near Metro stations to encourage transit-oriented development and raising them elsewhere to pay for it, and getting rid of redundant bureaucracy.\u00a0 (Fun fact: we are the only local jurisdiction that requires two different independent agencies to sign off on every record plat, which drives developers banana-cakes.)\u00a0 And after passing numerous employment laws, we should give employers time to adapt to them rather than immediately introduce more mandates.\u00a0\u00a0If we implement this kind of agenda, maybe we could attract and retain businesses without handing out tens of millions of dollars in corporate welfare.<\/p>\n

Economic development is tough.\u00a0 It\u2019s about more than one big employer.\u00a0 It takes time.\u00a0 It takes multiple components.\u00a0 Most of all, it takes discipline.\u00a0 If our next generation of elected leaders learns these lessons from Discovery\u2019s departure, we will come back stronger than ever.\u00a0 If not, Discovery won\u2019t be the last high-profile employer to say adi\u00f3s.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. Word of Discovery Communications\u2019 exit from Silver Spring has exploded like a bomb in local politics, prompting attacks by the state Democrats on Governor Larry Hogan and two outsider County Executive candidates on the county government.\u00a0 But the answer to the real question is not to be found in political soundbites: where … Continue reading MoCo After Discovery<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,338],"tags":[1545,2100,2099,1993],"class_list":["post-9203","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-economy","tag-adam-pagnucco","tag-corporate-welfare","tag-discovery-communications","tag-economy"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-2or","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9203"}],"version-history":[{"count":10,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9203\/revisions"}],"predecessor-version":[{"id":9219,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9203\/revisions\/9219"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}