North Bethesda’s Critical Challenge: Fixing The ‘Unfriendly And Unsafe Walk’ Across Rockville Pike

The North Bethesda area is continuing to grow, with Pike & Rose adding new office tenants and retail amenities, but developers still say the area needs greater public investment to help make it more attractive to companies and residents. 

From Bisnow

Executives from Federal Realty Investment Trust, Willco and LCOR, three of the most active developers in the area, said Thursday on Bisnow’s Welcome to North Bethesda event at Pike & Rose that the county needs to make greater infrastructure investments to connect the mixed-use project to the White Flint Metro station and to other nearby developments to make the area more walkable.  

Federal Realty in April signed four new tenants at 909 Rose, the Pike & Rose office building that delivered last year, bringing the 212K SF building to two-thirds leased. Federal Realty Vice President Jay Brinson said the building has landed tenants because of the development’s walkability, but he wants to see the county invest in more infrastructure in the surrounding area, something Federal Realty CEO Don Wood has been pushing for years.

“We’re getting tenants coming from throughout the county and they’re willing to pay a premium in rent over their current locations because they see the value in what they’re getting here,” Brinson said. “If North Bethesda’s future is going to be successful, we have to continue to build on that, and that means connecting the various development parcels together, focusing on making Rockville Pike more friendly for pedestrians coming from the Metro entrance.”

The area could stand to benefit from the $1 trillion infrastructure bill that passed the Senate Tuesday, including $110B in investments for roads, bridges and highways and $66B for passenger and freight rail. 

Montgomery County Executive Marc Elrich said he supports more infrastructure investment, and he is “interested in entertaining” tax-increment financing packages, a public investment tool that the District uses often but that hasn’t previously been used in Montgomery County. A major land use plan currently going through the Montgomery County Council recommends the use of TIF packages. 

“We’re going to change the way we do business, we’re going to change the way we build infrastructure,” Elrich said. “The business community has said over and over that the lack of transportation in this county is an impediment to growth.”  

In order to fund more infrastructure investments, Elrich said the county needs to expand its tax base by adding more private employers, an area where Montgomery County has lagged behind other parts of the region. Elrich said he hopes to draw activity from the county’s booming I-270 life sciences corridor to the North Bethesda area to help grow its tax base.  

The county is working on a deal with WMATA at the White Flint Metro station to create a life sciences hub, and Elrich said he is seeing interest from life sciences companies to relocate to the area. He said he thinks it could replicate Kendall Square, the Cambridge, Massachusetts, life sciences hub with the highest rents in the country.

“I think we’re going to be able to make this place take off,” Elrich said. “And frankly, if this takes off, we get a signature development in Montgomery County. We don’t have signature developments like Fairfax does. Bethesda’s not a signature development. It’s big, it’s important, but it’s not a shiny gold object, and Fairfax has managed to pull off some shiny gold objects. We’ve got to figure out how to compete in that space.”

Brinson, speaking on the panel after Elrich, said he sees Pike & Rose as a “gold shining star,” of Montgomery County’s development. He also said he thinks the area could benefit from the life sciences activity.

Federal Realty received Montgomery County Planning Board approval last month to swap out a planned multifamily building at Pike & Rose with a 10-story research and development facility, the Washington Business Journal reported. The developer hasn’t committed to building the life sciences use but said it is exploring the potential. 

In order to land life sciences tenants at the rent prices it would take to make the project pencil, Brinson said the area needs infrastructure improvements to make it more walkable and connected. 

“To get those high-rise rents that we need there, to get people to pay those premiums, you need to have those amenities,” he said. “As great as it is here at Pike & Rose, it’s only 23 acres. It needs to be much broader. It needs to be a connected urban grid. We have so many office tenants, and many that aren’t coming here they look down the street at that Metro entrance and go, ‘That’s an awfully long walk for our employees, and it’s an unfriendly and unsafe walk.'”

One of the developments that could expand the area’s urban street grid is Willco‘s Rose Village, a 20-acre project planned for up to 2,063 residential units directly to the west of Pike & Rose. Willco Chairman Gary Cohen said he sees the project as an extension of Pike & Rose that should make the area feel like one unified community. 

Cohen also said he wants to see more infrastructure investment in the area. He praised the plans for a second, northern entrance to the White Flint Metro station, which could soon be renamed the North Bethesda station. But the new entrance would still be on the east side of Rockville Pike, across the busy thoroughfare from Pike & Rose and Rose Village, and Cohen said it needs a new pedestrian connection. 

“The infrastructure is important,” Cohen said. “The fact the North Bethesda Metro is coming closer, that’s great. When they get off the Metro, how are they going to get to the other side? Are we going to build a bridge or a tunnel? Are we going to make Rockville Pike more friendly to cross? That’s a big deal.”

Montgomery County Council Member Andrew Friedson, who represents the North Bethesda area, said he led the effort to restore funding for the second Metro station entrance, and he also wants to see more improvements to pedestrian infrastructure. 

“We’ve been pushing a lot on pedestrian safety and the walkability of the urban environment,” Friedson said. “If you show a potential tenant an area and say, ‘This is an urban lifestyle,’ and they can’t cross the street, they’re not going to sign a lease. That’s up to us on the public side.”

LCOR earlier this year delivered the 294-unit Arrowwood apartment building, the third phase of its project at 5410 McGrath Blvd., less than a half-mile from the White Flint Metro station. LCOR Executive Vice President Harmar Thompson said its residents want better connectivity in the area. 

“Infrastructure in this market is something that’s greatly needed to tie all of these great projects together,” he said. “It’s what our residents want. They want green space. They want walkability. They want to be able to transgress the Pike, and they want easy access to the Metro.”

Industrious Director of Real Estate Peri Demestihas said connectivity and walkability are important for the members of its new 43K SF flexible office space in the 909 Rose building, which opened Monday. 

“Making sure walking around is safe and crossing the road is safe, that’s huge,” Demestihas said. “Our members expect that. That’s usually outside of our control, but it’s something we pay attention to when we do site selection.”Contact Jon Banister at jon.banister@bisnow.com

Will you be attending the North Bethesda Bisnow Event?

Event website: https://www.bisnow.com/events/washington-dc/neighborhood/welcome-to-north-bethesda-6640

Discount code: FWF20


As rents continue to climb in Southern Bethesda, residents and tenants alike are looking north for new live-work-play opportunities. From a surge in life science tenants to new companies investing in White Flint and Rockville, join Bisnow on August 12th to learn how you can make the best investment in this emerging submarket of Montgomery County.
:

What You’ll Learn:

  • Major Projects Update: How Pike & Rose and many more stood their ground amidst the Coronavirus pandemic
  • As Downtown Bethesda grows expensive, what tenants are flocking to Rockville and White Flint?
  • How much does transit play a role in the development and investment of these neighborhoods?
  • How much is the life science surge affecting development and investment plans in Northern MoCo?
  • Repurposing retail: as large tenants like Lord & Taylor fade, what will be down to flip and repurpose these massive spaces?

How You’ll Do More Business: As rents continue to climb in Southern Bethesda, residents and tenants alike are looking north for new live-work-play opportunities. From a surge in life science tenants to new companies investing in White Flint and Rockville, learn how you can make the best investment in this emerging submarket of Montgomery County.

Who You’ll Meet: North Montgomery County’s top tenants, owners/developers, public officials, and investors.

What Does Your Ticket Get You: Bisnow events bring together the biggest power players in the industry to identify opportunities, build your network and expand your business. With the largest audience of commercial real estate professionals in the world, no one knows how to help your business more than us. 

Mandatory Referral No. MR 2021020, Request for the acquisition of 11600 Nebel Street in Rockville as an emergency homeless shelter

Read the entire staff memo here.

Project Description

The Montgomery County Department of General Services (DGS) is acquiring an office building located at 11600
Nebel Street to operate an emergency homeless center. An existing facility in Rockville will soon close, and
recreation centers, which have been utilized during the pandemic as temporary spaces, will re-open as the
pandemic eases. The proposed facility will ensure that a full complement of homeless services is available for individuals seeking emergency shelter in the County. All physical changes for the building will occur in the interior of the structure. DGS anticipates that the building will accommodate approximately 200 beds. The operator, Montgomery County Coalition for the Homeless (MCCH), and the Department of Health and Human Services (HHS) will determine the specific staffing number. DGS anticipates closing on the property soon.

Site Description

The property at 11600 Nebel Street consists of an existing office building and is surrounded by approximately 100 surface parking spaces. The existing building is approximately 33,048 square feet in size. Two driveways from Nebel Street provide vehicular access to the property. There is a minimal amount of landscaping on the property.

Surrounding Neighborhood

The proposed emergency shelter is located west of Nebel Street, between Marinelli Road and Nicholson Lane. To the immediate north is the Pepco Substation, which is under construction, and the Fitzgerald GMC Rockville automotive dealership is to the south. The WMATA bus depot is located west of the subject site. A variety of non-residential buildings are located east of Nebel Street, including the Montgomery County Pre-Release Center.

Why Thrive Montgomery?

Thrive Montgomery addresses the role of planning in encouraging healthy lifestyles; supporting arts and culture; and building a sense of community, but its overarching goals relate to economic performance, racial equity, and environmental sustainability. You can read about Thrive Montgomery, the first complete overhaul of our community’s comprehensive plan since 1964, here. Also on The Third Place blog, Planning Chair Casey Anderson gives an excellent summary of where we are right now in Montgomery County.

Here are a few tidbits from his recent blogpost:

Our quality of life depends on attracting and retaining employers and, in turn, the employees they need. Montgomery is in the 99th percentile of counties in household income and educational attainment but our economic performance has been slipping since the Great Recession of 2008. The number of jobs in the county grew by 5% from 2004 to 2019 while 20 similarly sized counties across the country grew employment by an average of 21%. Montgomery County experienced the slowest rate of business formation in the DC region from 2010 to 2019.

Household income growth in the county lagged the national average (14% vs. 25%) and was the slowest in the region during this period. Montgomery County added jobs, albeit slowly, but growth came largely in lower wage sectors of the economy.

Today communities with high concentrations of racial and ethnic minorities also show lagging median household incomes.  And even as the county becomes more racially and ethnically diverse, our neighborhoods are still largely separated along income and racial lines.

Unless we attract more young adults this aging of our workforce will put more pressure on the tax base as the proportion of retirees relative to residents in their peak earning years grows. This increase in the so-called elder-adult dependency ratio means that our economic performance will have to improve just to maintain current levels of tax revenue and the services it funds.

Read the entire blog post on The Third Place

Proposed changes to the White Flint Taxing District

The county is proposing changes to the special White Flint Taxing District. For the fifteen people who aren’t property owners who are curious about this issue, you can peruse a Power Point presentation on the topic.

You can read Friends of White Flint’s official position here.

The County Council will hold a work session on the resolution to repeal and replace Resolution No. 16-1570 with respect to the White Flint Sector Plan Implementation Strategy and Infrastructure Improvement List and related amendments to the FY21-26 Capital Improvements Program on TUESDAY, MARCH 9, 2021, 1:30 – 2:30PM

Please join us November 19 for an interesting and informative online Community Meeting

Please join us for a one-hour community Zoom meeting on Thursday, November 19 at 7:00 pm. Register at https://cutt.ly/FOWFNov19. Walker Freer and Atul Sharma from the Planning Department will update us on a

  • proposed extension of the Trolley Trail through the Pike District
  • pedestrian improvements at the intersection of Route 355 and Route 187
  • the Advancing the Pike District initiative
  • development data over the decade since the passage of the White Flint Sectors Plans

We’re also excited that Councilmember Hans Riemer will join us at 7 pm for a few minutes to welcome everyone and answer a couple of questions from our members.

A veto and response on Bill 29-20

On Friday, County Executive Marc Elrich issued the first veto of his administration against Bill 29-20 by the county council offering 15-year property tax breaks for high-rise developments at Metro stations. Adam Pagnucco wrote an informative blog post discussing this veto on Seventh State at http://www.theseventhstate.com/?p=14013. Adam discusses what the County Executive got right and got wrong in Marc Elrich”s detailed explanation of his veto, in Adam’s opinion, of course. It’s well worth reading.

In response, Councilmember Andrew Friedson, one of the bill’s sponsors, wrote on Facebook:

“I’m confident we will have the votes to override the veto to continue our efforts to make Montgomery County more attractive and accessible for new residents, businesses, and investment.

There are so many misleading points in the County Executive’s lengthy statement so I won’t dispute line by line but here are the few key points: 1) The County Executive’s core argument is that these projects would proceed regardless so this incentive comes at a cost despite overwhelming and undeniable evidence demonstrating that simply isn’t the case. None of the WMATA sites are being developed and developers with Joint Development Agreements are walking away all over the region, due to unique infrastructure requirements on these sites, high costs of high-rise construction, etc. 2) These sites currently collect ZERO property tax, generate ZERO housing, and provide virtually no public benefits aside from surface parking. I view that as an abject public failure, but respect anyone who prefers this status quo. 3) Multiple fiscal analyses have demonstrated both that high-rise projects don’t work without the incentive and that the Grosvenor project in particular would generate more revenue to the County in impact and income taxes than the property tax abatement (which the county wouldn’t otherwise receive without a project). 4) The Executive “spiked” his fiscal analysis and has been trumpeting those “costs” despite the fact that they’ve been discredited. For instance, they assumed all 1 bedroom units and all sites generating N. Bethesda rents — both representing far higher numbers than any semblance of reality. 5) The bill gives discretion to start the abatement in Year 2 instead of Year 1 in case Question A doesn’t pass (which shows why it should!). This lowers the value of the benefit, but ensures the County receives the revenue/tax base benefit of the new construction in the future.

All that said, here’s the bottom line: if you believe in the social, economic, and environmental value of high-rise, transit-oriented development and that we have a severe housing crisis that has severely hindered our progress, this bill simply forgoes revenue we wouldn’t otherwise receive to generate housing and smart growth development we desperately need in the strategic locations where we clearly want it. If you’re willing to wait until the market changes — which could easily be 10, 15, 20 years, or to accept low/mid-rise development at Metro sites that will stand for 50-60 years, then this isn’t the best or most appropriate solution. That’s really the choice. The rest of the same, tired talking points aren’t really relevant to the discussion.

As you know, Friends of White Flint advocated for passage of this bill, and we hope the Council overrides this veto.