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Washington County location major plus in economic development strategic plan

February 16, 2013|By DON AINES | dona@herald-mail.com
  • The I-70/I-81 interchange as seen from Westbound I-70 in Hagerstown.
By Joe Crocetta/Staff Photographer

Editor’s note: This is one in an occasional series of stories about findings and recommendations in the Hagerstown and Washington County Economic Development Strategic Plan.


“Location, location, location” is an old real estate adage and one of the major plusses listed for Washington County in an economic development strategic plan.

At the same time, a competitive economic scorecard for the county contained in the Urbanomics Inc. report lists a mixed bag of advantages and disadvantages that Washington County has compared to neighboring counties and similar communities.

Urbanomics President Kenneth Creveling last month detailed the findings of the plan for county and local officials and business leaders. The plan was prepared for the Hagerstown-Washington County Economic Development Commission and Hagerstown-Washington County Industrial Foundation (CHIEF).

Washington County is within 75 miles of Washington, D.C., and Baltimore, two major metropolitan areas with a combined 8 million people, Creveling said.

Those markets are accessible by Interstate 70, but the report states that there is a perception among local leaders that people in Baltimore and Washington “think of Washington County and Western Maryland, in general, as a rural unsophisticated area and a long drive.”

Interstate 81 through the county is second in truck traffic in Maryland only to a section of Interstate 95 in Cecil County, allowing distribution and warehousing to flourish at facilities such as Hopewell Valley Industrial Park, Creveling said at the presentation.

With Virginia and North Carolina considering tolls for sections of I-95, that could shift more truck traffic onto I-81, and Creveling suggested local officials work with the state to get the highway widened to six lanes.


Transportation assets

The plan suggests a number of transportation improvements could be made. Building a bridge over Antietam Creek at Professional Court to expedite development of the Mount Aetna Farms technology park is the top priority for Washington County Commissioner Jeffrey A. Cline.

Hagerstown Regional Airport and CSX and Norfolk Southern railroads are other transportation assets, the report said.

The airport has the second-longest public-use runway in Maryland, but not all of it can be seen from the existing air-traffic control tower, the report said.

Several county commissioners recently said that building a new control tower should be a priority project for the airport. A marketing plan to develop the airport as an employment center is another of Cline’s priorities.

The county has some major employers — Creveling cited Volvo Powertrain, Citigroup and First Data as employing more than 6,000 people combined. Those and other existing industries employ large numbers of skilled workers and professionals, he said.

Large national or global industries can be affected by factors outside local control, and the plan calls for a more “diversified and recession-proof economy.” It would be preferable, Creveling said, to have 30 businesses with 200 employees each.

Dozens of local leaders, from county and city elected officials to business people and farmers, were interviewed for the study, and they gave the county good marks for its health care, education and social services; arts, culture and entertainment; pro-business environment; favorable cost environment; parks and outdoors; and volunteerism and community involvement, the study said.

However, the study pointed to a number of weaknesses “real and perceived ... that need to be overcome in order to continue to be successful in economic development.”

Among the top concerns was an inadequate supply of skilled labor, the report stated.

“It seems the companies seeking labor are able to find it,” albeit with some effort, Creveling said at the presentation.

That ties in with one of the findings of the competitive economic scorecard, which compared Washington County to a dozen similar communities in Maryland, Pennsylvania, West Virginia, Virginia and several other states, Creveling said.

“This area has the second-lowest level of educational attainment” among those communities, defined by the percentage of people older than 25 who have bachelor’s and post-graduate degrees.

“This may be explained by the county’s ‘blue collar’ roots and also by the growing lower income populations attracted to the Hagerstown area by a concentration of social service agencies and organizations and correctional facilities,” the report said. Raising educational achievement levels is important to promoting the county as a place to locate high-wage jobs, it said.


‘Jobs to fill’

“We have jobs to fill, but we don’t have qualified people to fill those jobs” is a refrain County Commissioner William B. McKinley said he has heard in visits to businesses both big and small. “Improvement in this area will lessen unemployment, as well as attract new business to the area.”

Hagerstown’s downtown was perceived by interviewees as having a “heavy concentration of poverty-level residents, indigents and low-income housing,” along with vacant properties and buildings in disrepair, the report stated.

“That’s a major deterrent to downtown investment,” according to Creveling, who said it is important for the downtown to be a focus of civic pride for both the city and the county, he said.

Increased policing and code enforcement were recommended in the report, along with low-income housing and social-service providers becoming “working partners in finding a solution.”

Job and business growth were “sluggish” in the county over the past decade, although four counties studied had negative job growth over the same period, the report’s scorecard said. Neighboring Frederick County, Md., and Franklin County, Pa., had the strongest job and business growth, according to the study.


Regulatory issues

The study found some regulatory issues that could be remedied by the city and the county.

Those include Hagerstown’s position on extending water service to unincorporated areas providing they agree to future annexation. While the city believes annexation is necessary to expand revenue, the county’s position is that it might drive away potential businesses because of increased taxes when a property is annexed, the report said.

Interviewees also criticized “burdensome land development regulations” by the county that cost businesses time and money and place it at a disadvantage to Pennsylvania and West Virginia, the report said.

Creveling suggested “fast-tracking the permitting process,” especially by the county.

“When businesses move, they want to move quickly,” Creveling said.

The county also is at a competitive disadvantage to other counties because of Maryland’s business taxes, ranking 42nd out of 50 states, the report’s scorecard said.


‘Taking the lead’

The plan contains dozens of recommendations to bolster the strengths and mitigate the weaknesses.

Economic Development Commission Vice Chairman Ron Bowers said it will take political and community leadership and transparency to turn those into realities.

The study said community involvement is a plus for the county in terms of economic development — up to a point.

The plan lists one of the county’s competitive strengths as “what seems to be a disproportionately large number of community organizations and initiatives and annual and on-going civic and charitable activities.”

“This speaks highly about the level of public interest and commitment to sustaining and improving the general quality of life and economic well being in the area,” the report said.

On the other hand, another section of the plan lists difficulty in reaching consensus and acting on important issues as a disadvantage.

“The presence of so many involved civic leaders, agencies and organizations in the Hagerstown area, each with their own opinion and agenda, plus an often confused public, appears to inhibit reaching agreement on many important issues,” the report stated. “Economic development has also been an area where reaching consensus and agreeing on priorities has been inconsistent and difficult.”

“It’s difficult to get things done because not everyone is going in the same direction,” Creveling said at the presentation.

The report suggests a number of possibilities for the organization of the EDC, including one that would have it the lead agency among other redevelopment-related organizations.

“I think that’s the key here, EDC taking the lead,” Bowers said.

The EDC could “Negotiate an inter-local agreement with the City of Hagerstown that combines County and City economic development efforts for greater focus, efficiency and joint investment,” the report suggests. “The EDC can be responsible as the lead economic development marketing organization for the county and city, combining staff as appropriate and benefiting from offsetting budget contributions from the city.”

At the same time, the report suggests the EDC “Forge greater day-to-day collaboration, as operations partners, between the EDC and the Hagerstown-Washington County industrial Foundation Inc. (CHIEF). This can take the form of joint planning, marketing and client missions, etc.,” the report recommended.

The EDC will need to bring together CHIEF, the Hagerstown-Washington County Chamber of Commerce and the Greater Hagerstown Committee to work with the county and local governments and the Washington County Board of Education to develop priorities and come up with a vision for implementing the plan, Bowers said.

The state and congressional representatives will have to be lobbied for help because many of the infrastructure projects are going to require state and federal approvals and funding, Bowers said.

Diversity of opinion is good, but once a decision is made, the parties involved have to unite behind it, Cline said.

For example, Cline said, he did not personally agree with the idea of a stadium downtown when it was proposed last year, but once the Board of Commissioners voted to support its part of the project, he felt it was important for him to support the plan.

Put together an action plan and clearly explain it to the public and it will get support, Bowers said. But such a plan has to be transparent, Bowers said, and borrowed a line from Herald-Mail Opinion page columnist Spence Perry to sum that up: “Secrecy is the assassin of enthusiasm.”

Economic factors and indicators

The Urbanomics Inc. Economic Development Strategic Plan for Hagerstown-Washington County listed 21 economic indicators and factors that provide the basis for evaluating and comparing Washington County and 12 competitive and peer counties. Following is a summary of key findings.

Population growth and income

Washington County's population has been growing at a slower rate than most of its regional competitors and other peers. Median household and per capita incomes generally are on par with its regional competitors, except Frederick County, Md., and are higher than other peer counties included in the analysis. Washington County's poverty rate is higher than its regional peers, except Berkeley County, W.Va., largely due to the high incidence of poverty in the City of Hagerstown, but is lower than most of the other counties included in this analysis.

Housing trends

Washington County's housing market benefited in the first half of the past decade from spillover growth from the D.C. metro area, peaking at nearly 2,000 housing units permitted in 2005, but has been slowest of the 13 counties profiled to recover from national economic slump beginning in 2008.

Labor force

The Washington County labor force has been growing at a slower rate than most of its regional competitors and other peers and its labor force participation rate is among the lowest. A positive is that the ratio of local jobs to the size of the labor force is among the highest, indicating that the county is less of a "bedroom community" and is more self-sufficient economically than many others.

Educational attainment

Washington County is at the lower end of the educational attainment spectrum in terms of percentages of its residents 25 years of age and older having four-year college degrees and graduate and professional degrees.  This may be explained by the county's "blue collar" roots and also by the growing lower income populations attracted to the Hagerstown area b a concentration of social service agencies and organizations and correctional facilities. Whatever the reason, statistics that show comparatively low educational attainment levels pose a daunting challenge to both educators and economic developers that seek to raise educational achievement levels and promote Washington County as a viable place to live for an educated workforce and a location of high-wage jobs.

Mix of occupations

The county has comparatively high percentage of its workforce in service, sales/office, construction/maintenance and production/transportation/materials movement occupations, but is at the lower end in generally higher-wage white-collar management/business/financial and professional/technical occupations.

Job and Business Growth

The county experienced sluggish jobs and business growth from 2001 to 2011, compared to other counties in the immediate region and the majority of counties studied. Four counties experienced negative job growth during the period. Job growth rates were strongest in two neighboring counties — Frederick County, Md., and Franklin County, Pa., — plus Spotsylvania, Va. and Warren County, Ky.

Employment concentrations

Washington County has higher ratios of total jobs and total private sector jobs per 1,000 population than its neighbors, Frederick County, Md., Berkeley County, W.Va. and Franklin County, Pa.

Average wages

Washington County wages in most sectors generally are competitive with those in all but Frederick County, Md. A comparatively weak sector in Washington County is Arts, Entertainment and Recreation, where local wages are lowest of all 13 counties.

Major employers

Types and sizes of employers vary widely, as does reporting of data. Most sources tend to stress manufacturing employers.

Agriculture

Agriculture varies widely in importance among the 13 counties. In terms of value of farm products sold per farm, Washington County is second  only to Franklin County, Pa.

Tourism

Tourism, as measured by retail sales and accommodations and food services sales per capita appears to be oriented largely to day visitors in most counties.  Comparatively high retail sales per capita in Washington County is due in part to the attraction of Hagerstown Premium Outlets, but is also explained by the historical role of Hagerstown as the leading trade center in the surrounding Tri-State region.

Tax climate

The Tax Foundation ranks Maryland 42nd overall in its Business Tax Climate Index, but Maryland compares very favorable in corporate and sales taxes.

Cost of living and quality of life

Washington County has generally favorable and competitive cost of living indicators, particularly in relation to adjacent and nearly Interstate 81 corridor counties, including comparatively low cost of living index, low cost of housing, low crime rate, high school district rating and high health care index.

Site and building inventory

According to the Maryland DBED site and building database, Washington County has listings for 18 available industrial sites totaling 1,543 acres and nine available industrial buildings with a total of only 515,000 square feet, which seems very low. The county is competitive in available sites, but available building space is much greater in the other 12 counties. Content, consistency and accuracy of state databases appear to vary widely. ... It is important that the EDC monitor and provide regular updates to the Maryland DBED database to ensure its completeness and accuracy.

Small business and workforce development

A number of interesting small business development initiatives and programs were found among the 13 counties profiled. These include small business loan programs in Franklin and Cumberland counties, Pa. A number of areas have technology centers for small business and workforce development, but only in a few areas, including Washington County, were business incubator facilities found.

Economic development organizations

Lead organizations include county departments (Frederick County, Md.), county departments overseen by public-private boards of directors (Washington County, Md., Winchester, Va.). The largest number of lead organizations among the 13 counties are 501(c)3 or 501(c)6 not-for-profit public-private partnerships.

Washington County was compared to 12 other counties and their central cities in the above Scorecard report. The other counties were Frederick County, Md. (Frederick);  Berkeley County, W.Va. (Martinsburg); Frederick County, Va. (Winchester); Franklin County, Pa. (Chambersburg); Cumberland County, Pa. (Carlisle); Spotsylvania County, Va. (Fredericksburg); Buncombe County, N.C. (Asheville); Catawba County, N.C. (Hickory); Florence County, S.C. (Florence); Spartanburg County, S.C. (Spartanburg); Washington County, Tenn. (Johnson City); and Warren County, Ky. (Bowling Green).

Strengths and weaknesses

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