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Development aimed at defense industry stalls in Harford

DefenseDefense EquipmentManufacturing and EngineeringAberdeen Proving GroundMike Bennett

The new Aberdeen Corporate Park promises 269,000 square feet of LEED-certified office space right off Route 22, close to the I-95 interchange.

But the project's first building sits empty, and two Harford County council members said no one has even looked into leasing space there.

The project owner, Merritt Properties, is one of many developers who were banking on a promised influx of defense contractors to Harford County but are now struggling to fill vacant buildings.

With contractors nervous about a very uncertain federal defense budget, the hoped for influx has not materialized, the county's economic development chief says.

"I think we have hit a real plateau right at the moment for any kind of new construction, both on the [Aberdeen] Proving Ground and off the Proving Ground, for the short term, and the short term is probably for three to five years," Harford Economic Development Director Jim Richardson said. "Everybody is feeling the pinch."

As recently as last year, Richardson had projected the county would get two or even three contractor jobs for every new defense job coming to APG.

That projection has yet to pan out.

"What we have settled on is just about one to one right now," he said of the contractor-to-defense job ratio.

Richardson confirmed that no one has leased the first Aberdeen Corporate Park building and explained it is simply too hard to get defense contractors to commit right now.

Aberdeen City Manager Doug Miller said he and Mayor Mike Bennett are worried about the Corporate Park project, as well as the COPT's North Gate Business Park project, which is next to the APG employee and contractor gate, and about Fieldside Village, an office development next to Ripken Stadium.

"Two are unfilled and the other is not filled to our expectations," Miller said about those projects. "We are very concerned about all three and the lack of BRAC-related commercial development in the city."

Richardson said while debate rages on whether the so-called "fiscal cliff" on the federal level is just a bump, the outlook is more stark for the world of defense.

"For the defense industry, it's definitely the cliff, because there's a huge cut in defense spending," he said. "We know that Maryland, Aberdeen, will be somewhat insulated from those cuts."

"They're the tip of the sphere to homeland security," Richardson noted about APG and Fort Meade in Anne Arundel County.

He said his department is continuing to work with Aberdeen Corporate Park and Merritt Properties has definitely not pulled out of the project, as they still have two pad sites remaining.

"They are obviously not going to build until they have a contract on those pad sites," he said. "It's still a very viable project and unfortunately, it's just a slow time in the leasing business industry here across the board."

Richardson said business is nevertheless better than it used to be, as BRAC helped the area's economy stay afloat.

"My stock answer to things is, we are still better off today than we were five years ago," he said. "We have 87 new companies in Harford County that are operating. Those are solid and those are not going anywhere."

"It's just that we didn't get the bump-up that we had expected," he continued. "We still have over a billion square feet of new offices that have been leased since 2008."

Even the new year could bring more confidence for the contractor industry, he said.

"Any decision that's not what we have today will be an improvement," he said, with a laugh, about the federal hold-up. "Whatever is done in [Washington,] D.C. to give certainty to the budgetary process will be an improvement."

Bennett said the city is just in a holding pattern but he also hopes Aberdeen will see the federal budget improve soon.

"I think we are all kind of waiting to see what happens," he said. "Obviously it frustrates me because there are business parks that were going to build out."

Bennett said the first Merritt building was supposed to be marketed to medical professionals, so it remains to be seen how that would pan out.

He believes the development will ultimately take off.

"Those folks have put a quality project together," Bennett said.

He also said The GATE project at APG, which benefited from an "enhanced-use lease," has hurt the city's other developments geared to defense contractors. The GATE is on federal land outside the city limits and is receiving tax concessions from Harford County.

"Nobody envisioned that [The GATE] was going to grow as big as it did and that obviously has taken away business in the city," he said. "It is what it is, but we just didn't realize that was going to be that large."

Bennett said the Army has a "little more incentive" for businesses with that project.

"They have the first blush of looking at them," he said about APG.

About the future of the defense economy, he noted: "It is what it is. Everybody's just kind of keeping their fingers crossed."

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