Some Montgomery County Council members aim to eliminate the county’s office vacancy rate by providing a financial incentive to encourage businesses to rent or expand their local footprint.
“We have 76 million square feet of office space and we want to make sure that as much of that is used as possible,” councilmember Evan Glass (D-At-large) said while promoting proposed legislation Monday during a press conference at the Preserve office building at 2600 Tower Oaks Boulevard in Rockville. “Filling that space is good for all of us.”
The county has a 21.9% office vacancy rate, according to statistics officials presented during the press conference.
The proposed legislation, the Make Office Vacancy Extinct (MOVE) Grant Program, will be formally introduced during the council’s Tuesday meeting. If approved, it would provide office rental grants for eligible businesses that want to move to the county or expand within the county and county businesses looking to expand their existing office footprint.
The bill is sponsored by councilmembers Glass, Natali Fani-González (D-Dist. 6), Marilyn Balcombe D-Dist. 2) and Laurie-Anne Sayles (D-At-large), who are all members of the council’s Economic Development Committee. Co-sponsors include council Vice President Kate Stewart (D-Dist. 4) and councilmembers Dawn Luedtke (D-Dist. 7) and Kristin Mink (D-Dist. 5).
“We have heard from so many folks, not only business owners but people were concerned about the vacancies of office buildings. No one wants to live next to a building that is empty.,” Fani-González said. “We want to make sure that our communities and neighborhoods are activated.”
The MOVE Program was introduced as a pilot program in March 2014 by then-County Executive Ike Leggett (D). However, it was never codified. This bill would establish the program under the law as part of the county’s Economic Development Fund. It also would increase the maximum financial incentive that a business could receive from the county from $80,000 to $150,000 by increasing the eligible amount of space. Under the program, a business can receive $8 per square foot of office space.
The revamped program also would allow county businesses to apply for the funding. Under the current iteration, only businesses looking to move into the county are eligible.
According to Glass, the Economic Development Committee assessed the county’s real estate portfolio over the past year and found that it could be improved by getting people back into the office. The committee decided to build off of the success of the existing MOVE program.
According to a memo from County Executive Marc Elrich (D), the program disbursed more than $5.2 million to 85 businesses between fiscal year 2014 and the end of 2023. These businesses occupied a total of 703,457 square feet of office space.
Grant funding for a revamped program would come from the county’s Economic Development Fund.
Jessica Jackson, human resources director at Origin Wireless and AI, said the MOVE program enabled the business to relocate to a larger, more centrally-located office in Rockville.
“It enhanced our ability to collaborate, innovate and generally cultivate our company culture,” Jackson said at the press conference.
Steve Evans, senior vice president and regional director for Rubenstein Partners, which owns the Preserve building in Rockville, cited the COVID-19 era move to remote work as one of the top reasons why office vacancies are on the rise.
“If employees are reluctant to come back to the office and companies need less space due to technology, there’s less incentive for companies to spend money to lease an office,” Evans said. “What these remote employees don’t appreciate is the synergies, bonds and promotion opportunities that exist when you collaborate in an office environment.”
Citing the MOVE program as one solution to the office vacancy problem, Glass and Fani-González noted the committee is also looking at the viability of repurposing some office complexes in the county into housing and other facilities.
According to council documents, a public hearing on the legislation will be scheduled at a later date.