Memorandum

TO: Department of Housing and Community Affairs - Montgomery County

FROM: Economics Research Associates

RE: Phase II Technical Memorandum - South Silver Spring Revitalization Strategy

DATE: October 14, 1996; revisions October 21, 1996

Introduction

This technical memorandum represents the culmination of ERA’s efforts to evaluate revitalization opportunities in South Silver Spring. The recommendations set forth in this memorandum build upon the findings of all previous work products. These strategies are designed to reflect market, economic and political realities; they also consider the efforts underway by various public agencies in Montgomery County involved in commercial revitalization and redevelopment efforts throughout the Silver Spring Central Business District.

This document, which represents the primary deliverable for this phase, is organized into the following sections:

¨ Summary of Key Recommendations

¨ Retail Demand Analysis

- Testing Retail “Demand”: Why “Big Box” or “Category-Killer”?

- Retail Demand Methodology

- Retail Definitions and Trends

- Key Market Findings

- Demand Analysis

¨ Recommended Revitalization Strategies

- Key Strategies

- Potential Land Assemblage

- Suggested Business and Professional Services Categories

¨ Economic and Financial Incentives

- Sources of Public Financing

- Existing Montgomery County Incentives

- Private Reinvestment Activity in South Silver Spring

- The Impacts of Public Incentives

- Implementation Mechanisms

- Applicability to South Silver Spring

Summary of Key Recommendations

The ultimate goal of this revitalization study is to stimulate reinvestment in the study area’s businesses and physical environment to ensure South Silver Spring’s continued contribution to the economic base of Montgomery County. As a result, ERA recommends six strategies that are designed to:

¨ Support recent re-investment activities in the study area, such as the Days Inn and Econo Lodge;

¨ Build upon the destinational quality of Caldor and strengthen the study area’s competitive regional position with specific retail uses, such as “category killer”, that complement and reinforce Caldor;

¨ Establish an identity and sense of place for South Silver Spring by creating an employment center of business, professional, and “support” services companies;

¨ Create a mechanism to implement commercial revitalization activities that focuses on coordinated marketing and tenant recruitment;

¨ Utilize existing scarce public resources, such as DHCA’s streetscape improvement funding, in the most efficient and effective manner possible for public improvements;

¨ Define other appropriate public incentives to stimulate business conservation and re-investment;

¨ Modify zoning to strengthen revitalization opportunities; and

¨ Tap the strong demographic characteristics of surrounding neighborhoods and advantages provided by the study area’s location.

For each of these six strategies, ERA laid out a series of goals that evolved over the course of the study. These goals include: (1) maintaining public space and infrastructure; (2) encouraging opportunities for private development and spin-offs; (3) creating jobs; and (4) re-using existing buildings. ERA has also suggested a series of “action plan” steps to meet these goals, including: timeframe/market opportunities; critical, early-on steps; whether the action should be spearheaded by the public or private sectors; and, recommendations as to the use of existing public resources or the creation of new public incentives.

These six strategies are summarized below. (Each strategy is detailed on pages 16 through 21 of this document).

Strategy I: Create New Public-Private Entity

This strategy creates a new public-private entity that can complement and go beyond existing revitalization programs to undertake marketing and tenant recruitment strategies, and to serve as a coordinator between existing County revitalization programs and agencies with the sole focus on South Silver Spring.

Strategy II: Undertake Marketing Campaign

This strategy attracts business and professional services companies to create an employment center for industries that provide value-added, intermediate-level services to other companies in the region. This is designed to take advantage of the study area’s strong locational factors; relatively low occupancy costs; excellent transportation access; proximity to skilled labor pools; and, existing building stock. (A list of suggested business and professional services categories is illustrated on pages 24 and 25).

Strategy III: Address Vacant Buildings

This strategy recommends that re-use or disposition strategies be defined for designated vacant buildings in South Silver Spring and to establish a schedule for these actions.

Strategy IV: Attract “Big Box” or “Category Killer” Retailer(s)

This strategy builds upon the destinational quality of Caldor and is designed to strengthen the study area’s competitive regional position by attracting similar or complementary retailers. It also reinforces Montgomery County’s recent public investment in the structured parking garage near Caldor. Based on ERA’s retail demand analysis, this strategy should target one to three retail tenants totaling approximately 55,000 to 65,000 sq. ft.

Strategy V: Retain Montgomery College in South Silver Spring Area

This strategy supports expansion of the existing campus on Georgia Avenue to accommodate the current estimated 70,000 sq. ft. of space requirements to one or more selected sites, including those identified in the MNCPPC Concept Plan study for Montgomery College. This recommendation is contingent on the results of that study.

Strategy VI: Revised Zoning Code for South Silver Spring

This strategy strengthens zoning as a development tool for revitalization of the study area.

While six strategies are described, ERA notes that creation of a new public-private entity -- described herein as the South Silver Spring Revitalization Partnership -- should be considered “the greatest among equals.” This strategy has been suggested to fulfill a role currently not addressed by existing entities. ERA’s experience in other commercial revitalization programs has shown that to place responsibility on either the public or private sectors alone to coordinate issues affecting development deal structures, implementation coordination between developers and public agencies, management of marketing and tenant solicitation, and business enhancement or recruitment efforts, can result in a program which does not successfully balance the goals and requirements of each.

It may prove that adaptation/expansion of an existing Montgomery County program (e.g., the County’s Urban Districts) could fulfill the needs identified for South Silver Spring. Our recommendation centers on the need to focus exclusively on South Silver Spring; we suggest that a new, independent entity might be better-equipped to focus on the project area. (ERA recognizes the difficulties inherent in segmenting South Silver Spring from the Silver Spring Central Business District in this recommendation). This new entity may be a public-private partnership in which Montgomery County and the private sector play key roles.

The first strategy described above can be considered an over-arching concept for some or all of the remaining five strategies. The other strategies should not be considered mutually-exclusive; in fact, they can each be considered revitalization tools that might be combined in a number of ways. The determining factors will be reasonable assessments of existing program and staff capacities, available public funding for existing or new incentives, and a review of existing public policies in effect in South Silver Spring.

Based on ERA’s site and physical analyses, there appear to be opportunities where various sites could be assembled for commercial development by Montgomery County, the private sector, or a combination of both (irrespective of such issues as property ownership or economic feasibility). ERA believes that such a mechanism could enhance the study area’s prospects for revitalization by increasing the size of such sites (thus providing for larger building footprints) and, under current zoning, increase density levels to 1.0x FAR on sites larger than 22,000 sq. ft. (These sites are profiled on pages 22 and 23 of this document).

ERA notes that a much more detailed examination of potential sites is necessary to evaluate existing uses, property ownership, access and visibility, density potentials and associated costs (e.g., fair market value, demolition costs, etc.). Given current economics, ERA notes that some form of public participation may be necessary to induce these opportunities.

ERA’s retail demand analysis demonstrates that, over the next five years there appears to be sufficient market demand to support a modest amount of retail development in South Silver Spring in the range of 54,000 sq. ft. to 64,000 sq. ft. among Apparel & Accessories, Home Furnishings/Equipment, and/or Other Retail categories. Merchandise types in these three categories could include all, or a combination of, books and music, home furnishings/housewares, office supplies and/or computer supplies. While this market support is modest, it is based on conservative assumptions regarding market area capture and a limited-sized trade area. Given the public incentives required to attract Caldor to the study area, ERA notes that this level of market support may not be of a scale to attract retail developers and/or tenants without public incentives.

Retail Demand Analysis

In this task, ERA analyzed potential retail demand as the basis for defining a market-responsive approach to commercial revitalization strategies for South Silver Spring. The results of this analysis were then “tested” against the potential for sites in the study area to be assembled for development opportunities (see Potential Land Assemblage). This demand analysis takes into account the feedback and comments received in previous tasks, including the Stakeholders Interviews and Focus Groups, our analysis of economic, demographic and market conditions in South Silver Spring and nearby areas, recent new investment (e.g., Caldor), as well as recent and current re-investment projects in the study area.

This analysis was conducted independent of the impact of public policies or incentives that may be necessary to enhance the overall long-term prospects for revitalizing South Silver Spring.

Testing Retail “Demand”: Why “Big Box” or “Category-Killer”?

This analysis tests market feasibility (i.e., demand, or supportable space) for “Big Box” or “category-killer” retail in the study area. ERA’s methodology and retail definitions are contained in the next section of this document. First, however, it is important to clarify why ERA focused its analysis on testing for “Big Box” tenants and not on small-scale (i.e., traditional “mom & pop”) retail uses. (ERA would define “small-scale” retail uses as those independent retailers or small chain-affiliates that generally occupy from 500+ to 3,500+ sq. ft. of space). These reasons are highlighted below:

¨ In the absence of more recent data on retail inventory in Silver Spring, ERA relied on the Space and Development Profile published in July 1993 by the Montgomery County Office of Economic Development. This source reported that the Silver Spring Central Business District contains approximately 730,600 sq. ft. of retail space scattered throughout the district on 16 streets (including the study area). ERA notes that this inventory excludes the 133,000 sq. ft. Caldor store.

The amount of vacant space was reported to be in the range of 222,700 sq. ft., or 30% of the district’s total inventory. While ERA recognizes that some of this vacant space is located in buildings that Montgomery County is purchasing for the American Dream project, this represents a sizable inventory of readily-available space that is not leasing due to weakened market conditions.

¨ While some of the vacant inventory noted above may be considered physically or functionally obsolete, even new (i.e., previously unleased) space has not leased over the past 1.5 years. This is best illustrated at Jemal Square, a 25,000 sq. ft. neighborhood strip center, located at the intersection of Georgia and Eastern Avenues, that has remained fully vacant since its delivery in early 1995.

¨ Reportedly, Silver Spring has lost 47 businesses with 25 or more employees since 1988. A total of 220 businesses have either left Silver Spring or downsized over that same time period, including: AT&T; ASG; Bell Atlantic; Citibank; Citizens Savings Bank; IDS-American Express; J.C. Penney and others. During 1995, Silver Spring lost approximately 1,270 employees through business relocations or relocation announcements.

¨ While small-scale retail may be compatible with current revitalization incentives offered by the Montgomery County Department of Housing and Community Affairs (DHCA) through its storefront canopy grants and facade easement programs, ERA notes that small business economics, particularly in retailing, pose substantial difficulties. For example, retailing, even among the nation’s largest chains, has been trending toward consolidation, mergers and downsizing since the national economic recession of 1990 - 1992. Competition remains intense due to the presence of mass merchandise chains. Expenses associated with labor, inventory, facilities (space) and other overhead are excessive, particularly in high-cost markets of the Northeast such as Washington, D.C.

¨ The precedent for “Big Box” or “category-killer” retailing in the study area has been established with the construction of Caldor Department Store, a 133,000 sq. ft. mass merchant that opened in August 1996. The direction of future retail prospects in the study area will likely be driven by the success of Caldor and its ability to draw market share from surrounding trade areas. (ERA notes that it is too early to evaluate Caldor’s overall performance; in the retail industry, store performance is typically evaluated by comparing sales levels on an annual basis - in this case, one year after opening).

Retail Demand Methodology

In this analysis, ERA has defined area households as the most logical target market for “Big Box” or “category-killer” retail in the study area. ERA also estimated the size and buying power of the resident market, and projected achievable sales levels produced by this market in various categories of merchandise, both under current conditions (1996) and in the future (2001).

ERA notes that this analysis reflects the interplay of a number of critical assumptions. It is based upon:

¨ Secondary data and research on the existing competitive supply of retailers and retail centers;

¨ Forecasted population and household growth projections for the market area and region; and

¨ Accepted industry standards for retail sales productivity for selected retail categories.

Moreover, ERA used our own experience in numerous markets in the United States to evaluate specific planning factors and market considerations. Based on our professional judgment regarding expected consumer behavior and our experience in retail analysis and commercial revitalization, ERA believes that these estimates represent a reasonable approach; in our view, further analysis is subject to more definitive testing through detailed consumer surveys or other means beyond the scope of this study.

Retail Definitions and Trends

The development of “Big Box” and “category-killer” retailers is a relatively recent phenomenon - occurring over the past 10 or so years and fueled by the real estate boom of the 1980s. Big box retailing reflects a consolidation of fragmented retail categories (i.e., small individual businesses) to large operations that track consumer purchasing behavior. Typically, these retailers specialize in categories (i.e., “category-killer”) such as electronics (Circuit City, Incredible Universe); pet items (PetsMart); housewares (Bed Bath & Beyond); office supplies (Office Depot); computer supplies (Comp USA); books and music (Borders or Tower Records and Books); and sports equipment and apparel (Bob’s Stores, Sports Authority). In addition, these tenancies may also include chain-affiliated, off-price apparel (Marshall’s, TJ Maxx, Filene’s Basement).

These retailers also grew out of the increased emphasis on value-related consumer purchasing preferences. In order for retailers to reduce prices, high sales volume, a varied merchandise mix and low overhead/facility occupancy costs are required (as compared to smaller, more traditional in-line streetfront or shopping mall locations).

Big Box and category-killer retailers represent the one sector of retailing that has shown consistent growth over the past five years. However, ERA submits that this trend may not continue at similar levels over the near-term based on several factors. Specifically, future prospects are likely to vary considerably by location and merchandise line (e.g., apparel and soft goods have demonstrated slower growth potential than books, music and consumer electronics). Moreover, sensitivity in the capital markets to downturns in sales volumes suggests that further consolidations will slow this growth rate. There will also be fewer new concepts. While the Big Box strategy is strong now, it is a retailing concept that has not yet withstood the “test of time,” and can easily become oversaturated.

As a result, more careful consideration of site and market characteristics by operators will likely contribute to a slower rate of growth. Until recently, lower-cost, “clean” pad sites in outlying locations were more attractive to Big Box and category-killer retailers than were close-in locations requiring land assembly and/or redevelopment to attract these types of stores. Now, less traditional sites such as Caldor’s location are being considered. But, given these factors, Big Box operators will be increasingly selective in choosing expansion locations. Determinants likely to receive even more careful scrutiny over the near-term include: site size and topography; land costs; availability and extent of financial and zoning incentives; available parking (surface parking is preferred); visibility and access to major thoroughfares; long-term demographic and market trends; the extent of regional competition, etc.

ERA’s analysis of potential retail demand and supportable space was oriented to specific categories above that are deemed more compatible with current locational characteristics and market considerations in South Silver Spring. For example, Caldor’s merchandise mix includes off-price apparel, home electronics and housewares. As a result, ERA’s demand analysis focused on complementary merchandise categories that could tap the strong demographic characteristics of the surrounding trade areas. This includes: books and music, home furnishings, office supplies, and/or computer supplies. (These are collectively defined in the industry as Home Furnishings & Equipment). In addition, we tested for miscellaneous retail (Other Retail) and Apparel & Accessories (recognizing market limitations as noted).

Moreover, ERA has also recognized in this analysis that the proposed American Dream project is likely to add competition among overlapping retail categories. This is most likely to include apparel and accessories, eating and drinking (away from home), recreation and entertainment, and books and music. These considerations are reflected in our trade area definition, orientation to specific retail categories, and market capture.

Key Market Findings

¨ The Washington, D.C. metropolitan area remains one of the strongest retail markets in the nation. Factors such as solid population and household growth, high household (disposable) incomes, the large number of working women, and relative development densities (particularly in close-in locations such as South Silver Spring) contribute to the region’s attractiveness for retail development.

¨ ERA’s retail demand analysis demonstrates that over the next five years there appears to be sufficient market demand to support a modest amount of retail development in South Silver Spring in the range of 54,000 sq. ft. to 64,000 sq. ft. among Apparel & Accessories, Home Furnishings/Equipment, and/or Other Retail categories. Merchandise types in these three categories could include all, or a combination of, books and music, home furnishings/housewares, office supplies and/or computer supplies. While this market support is modest, it is based on conservative assumptions regarding market area capture and a limited-sized trade area because of the factors outlined above.

¨ ERA notes that this level of market support may not be of a scale to attract retail developers and/or tenants without public incentives. Numerous locations within the metropolitan Washington area, including South Silver Spring, are competing for their share of available tenants. Because sites in other locations may inherently offer more positive characteristics, these attributes may have to be created in South Silver Spring either through financial and/or public policy incentives (e.g., zoning) to compensate for high land costs, relative development densities, multiple property ownership patterns (i.e., requiring site consolidation or assembly), and parking requirements.

¨ Public policy decisions will be required to establish a direction for commercial revitalization in South Silver Spring. Since a precedent has been established with the construction of the study area’s first Big Box retailer (Caldor), ERA believes that introducing one (or possibly two) additional Big Box or category-killer retailers in nearby South Silver Spring locations may provide an opportunity to recapture a portion of Montgomery County’s $5.5 million investment in the public parking garage.

Such a strategy would begin to build a ‘critical mass’ of Big Box retailers, resulting in a sense (among the public, Stakeholders, etc.) that revitalization activity continues in South Silver Spring (which lends support to another critical ingredient in any revitalization strategy - marketing), and maintaining momentum in the area’s development activity.

¨ Establishing critical mass with two or more retailers should also increase trip generation by expanding the market. This will depend, however, on their proximity to one another as well as the degree of visibility and highway access.

¨ While a strategic decision oriented toward one or two, smaller-scale Big Box or category-killer retailers appears to be viable in the near-term, ERA cautions that relying on the most current retail trend entails some risk and may not necessarily offer the best long-term solution to economic development efforts in the study area.

¨ Typically, Big Box retailers have been oriented toward auto-dependent locations with expansive surface parking (Caldor being an exception). ERA notes that there may be potentially contradictory results between the Sector Plan’s goal of creating an ‘active, pedestrian-oriented, urban streetfront retail environment’, and creating a cluster of Big Box retailers is not likely to generate a high level of synergy between them and street-related retail uses. Importantly, to what extent does Montgomery County want to reinforce street-related retail (or other) uses? ERA notes that this potential contradiction may warrant further discussions as a Master Plan issue.

¨ Other mitigating factors resulting from a revitalization strategy focusing on Big Box or category killer stores include: the likelihood that significant public incentives will be required (e.g., land assembly) that may generate only limited returns at this scale; and, expansion of the market area (since a cluster would presumably draw residents from a larger trade radius) may result in higher levels of traffic on Silver Spring’s road network. Public incentives will be cast in light of other factors noted above - regional competition, the transitory nature of selected retailers, and the “second-tier” locational characteristics of the study area vis-à-vis other, more strongly-located sites.

Demand Analysis

ERA’s intent in this analysis was to define a reasonable range of expected sales for a retail program oriented to three categories:

¨ Apparel and Accessories - includes women’s, men’s and children’s apparel and footwear. (ERA recognizes that market support for this category is likely to be limited given competitive positioning and other market characteristics noted previously);

¨ Home Furnishings and Equipment - includes textiles, furniture, floor coverings, major appliances, housewares, miscellaneous household equipment and consumer electronics; and

¨ Other Miscellaneous - includes general retail such as smoking products, personal care products and non-prescription drugs.

The results discussed below should be considered a reasonable estimate of the expenditures that new retail development in South Silver Spring can generate given a location providing good visibility and ready access from pedestrian circulation and parking areas and professional marketing and management.

Trade Area Definition

The methodology used to forecast potential sales tests the market strength for these three specific retail categories from the resident market. ERA estimated the number of households within a carefully-defined “trade area” extending two miles from the study area (see map). This trade area definition considers surrounding dense residential and commercial development patterns; intense market competition facing existing retailers, shopping centers and localities in metropolitan Washington today; locational characteristics such as highways and commuting patterns; and, trade areas as defined by the Caldor Corporation in its analysis of the Silver Spring marketplace.

This two-mile radius includes such neighborhoods as Shepard Park and Colonial Village in Washington, D.C., and Takoma Park, Woodside Park and North Chevy Chase in Maryland. This trade area was more “tightly” defined than Caldor’s trade area because of those competitive market factors discussed above. The trade area contains more than 36,800 households today.

Trade Area Demographic Profile

Table 1 profiles demographic characteristics of the trade area and compares these characteristics to the Washington, D.C. Metropolitan Statistical Area (MSA). These characteristics are highlighted below:

¨ The trade area’s population numbers more than 88,000 today. It is expected to decline slightly over the next five years to approximately 86,000. Likewise, the number of households is expected to decrease slightly, from 36,850 in 1996 to fewer than 36,000 by 2001. ERA attributes this decline to land scarcity (resulting in few housing starts), an aging population, and limited availability of financing for new residential construction (i.e., redevelopment, such as the Canada Dry site).

ERA notes that our previously-submitted Summary of Preliminary Market Data defined a trade area of 1.5 miles for research purposes. This retail demand analysis expands the trade area definition to 2.0 miles; the difference in households (i.e., households are forecast to decline in the 2.0 mile area) can be attributed to the fact that the 2.0 mile trade area extends further into Washington, D.C., where the number of households is declining in certain locations, such as the Georgia Avenue corridor.

¨ Household incomes in most neighborhoods comprising the trade area are very solid. This bodes well for retail potentials in the study area, as “disposable” household income for retail merchandise is readily available from trade area households. In fact, almost one-third of trade area households have incomes above $75,000 per year. Table 1 also illustrates the proportion of households in different income categories. Over the next five years, households in the lower-income categories are expected to decline, while those in upper-income categories are forecast to increase.

Retail Spending Patterns

Using detailed expenditure information compiled by Claritas, Inc., ERA estimated expenditures by trade area households among nine retail categories (Table 2). These categories include shelter, transportation, eating and drinking, household furnishings and equipment, apparel, entertainment, health care, insurance and education, miscellaneous retail and garden supplies. These trends indicate that:

¨ The largest proportion of household incomes are spent on housing in the trade area ($7,500 per year) and transportation ($8,600 per year) among metropolitan area households. A similar proportion of household incomes was also expended on eating and drinking (which consists of food at home and food away from home) - at 20%.

¨ Households spent much less on the remaining categories, ranging from $2,400 for Household Furnishings and Equipment to less than $500 for Garden Supplies. ERA considered the trade area’s lower spending patterns on home furnishings (than that of metropolitan area residents) in its retail demand analysis.

¨ On an annual average, trade area households spend more than $32,700 in these retail categories. By comparison, metropolitan area households spent a sizable sum more - $38,300 per year.

Expenditure Potentials and Capture Rates

While ERA believes that trade area households will comprise the primary market for new retail development in South Silver Spring, a limited number of other households outside of the trade area could also be expected to support retail uses in the study area (Table 3). Known as “market inflow”, this factor considers travel patterns, employment locations, and the nature of retail categories or specific stores (e.g., destinational). ERA reasonably estimates that an additional ten percent of trade area households, or approximately 3,700 households in 1996, can be tapped.

By 2000, however, ongoing revitalization efforts should strengthen South Silver Spring’s ability to “draw” from among regional residents by creating a stronger retail address in the future. As a result, ERA believes that the study area’s capacity to “capture” this market inflow will be strengthened - from 10% in 1996 to 20% in 2001. This yields an additional 7,200 households from outside of the trade area.

¨ Table 3 also illustrates the study area’s total annual expenditure potentials for these three retail categories based on a “capture” of all spending on Apparel and Accessories, Home Furnishings and Equipment and Miscellaneous Retail. Capture rates are conservative (5% for each of the three retail categories in 1996) and reflect the range of competitive alternatives in the region. This rate also considers, however, the destinational appeal of Caldor in terms of trips generated by repeat shoppers and the study area’s capacity to tap into these trips.

Sales Productivity and Supportable Space

Once potential on-site expenditures are estimated for each market segment, the final step of this analysis involves translating these expenditures into “supportable” amounts of space (in square feet) for each retail category analyzed. This requires the use of assumptions of sales productivity per square foot.

Again, our purpose is to test the levels of market support that could reasonably be expected in South Silver Spring among a Big Box or category-killer tenant(s). For purposes of this analysis, ERA utilized the following sales productivity factors, measured as sales per square foot (Table 4):

RETAIL CATEGORY SALES LEVELS

Apparel & Accessories $225 per sq. ft.

Household Furnishings & Equipment $225 per sq. ft.

Miscellaneous Retail $200 per sq. ft.

These sales levels are based on accepted industry standards for retail sales productivity for selected retail categories. As illustrated in Table 4, the model used to estimate sales and supportable space indicates the following:

¨ Based on this analysis of likely trade area households and expenditure potentials, South Silver Spring is capable of attracting approximately $11.8 million in annual expenditures under current conditions. This is expected to increase to $14.1 million in 2001.

¨ Under ERA’s assumptions regarding the sales productivity (on a per sq. ft. basis) illustrated above, sales levels are sufficient to support approximately 54,000 sq. ft. of net productive space among Apparel & Accessories, Home Furnishings/Equipment, and/or Other Retail categories. Merchandise types in these three categories could include all, or a combination of, books and music, home furnishings/housewares, office supplies and/or computer supplies. Additional market demand in five years should result in approximately 64,000 sq. ft. of market-supportable space in 2001 among these same categories.

Recommended Revitalization Strategies

Based on the analyses and findings of this study to-date, ERA crafted six revitalization strategies for South Silver Spring. These strategies are illustrated in the accompanying pages. We believe that these strategies reflect a market-based approach to revitalization of the study area in that they recognize current market limitations for “traditional” commercial real estate uses such as office and small-scale retail as well as the extent of existing public resources and entities involved in other ongoing revitalization and redevelopment activities in the Silver Spring CBD. Moreover, these strategies are based on ERA’s understanding of Montgomery County programs and policies. These recommendations also consider that several agencies are responsible for current revitalization and redevelopment efforts in Silver Spring. As such, responsibility for implementing certain of these strategies may either be shared among specific public agencies and/or fall within the domain of the private-sector.

¨ Support recent reinvestment activities in the study area, such as the Days Inn and Econo Lodge;

¨ Establish an identity and sense of place for South Silver Spring by creating an employment center of business, professional, and “support” services companies;

¨ Create a mechanism to implement commercial revitalization activities that focuses on coordinated marketing and tenant recruitment;

¨ Utilize existing scarce public resources, such as DHCA’s streetscape improvement funding, in the most efficient and effective manner possible for public improvements;

¨ Define other appropriate public incentives to stimulate business conservation and reinvestment;

¨ Modify zoning to strengthen revitalization opportunities; and

¨ Tap the strong demographic characteristics of surrounding neighborhoods and advantages provided by the study area’s location.

Key Strategies

For each of these six strategies, ERA laid out a series of goals that evolved over the course of the study. These goals include:

¨ Maintaining public space and infrastructure (i.e., commercial revitalization programs, in general, try to break the cycle of dis-investment by targeting public improvements to stimulate private re-investment);

¨ Encouraging opportunities for private development and spin-offs;

¨ Creating jobs; and

¨ Re-using existing buildings.

ERA has also suggested a series of “action plan” steps to meet these goals, including:

¨ Timeframe/market opportunities;

¨ Critical, early-on steps;

¨ ERA’s assessment of public agencies to take the lead in implementation; and

¨ The use of existing public resources or necessary “new” public incentives.

In the next six pages, the recommended revitalization strategy is named and described first. The impacts of that strategy on public policy and implementation goals are then evaluated. Under a series of suggested “action” steps, critical early-on steps are delineated, the suggested implementation mechanism is defined (i.e., public or private sector), and public funding or incentives are illustrated (i.e., from either existing available