Harford County still waiting on a base-driven boom in Aberdeen

A chain-link fence marks the edge of Aberdeen Proving Ground, an Army installation where a nationwide base reorganization was supposed to bring so many people and jobs to Harford County that officials worried they would not have the space or resources to meet demand.

Inside the fence, an estimated 21,000 people report to work, conducting research in massive new buildings. Shots fire in the distance. Sometimes bombs explode.


But outside the fence, gleaming new offices completed in anticipation of economic spillover stand empty, a reminder that any growth that's taken place growth remains tightly contained.

"We just haven't seen the transformation of Aberdeen itself that a lot of people thought we would see," said Scott Dorsey, CEO of Merritt Properties LLC, which bought land there in 2008 to build five buildings, of which one has been completed but is empty. "I do think that APG will start to drive the economy in Aberdeen and Harford County and northeast Maryland in a significant way, but it's going to take a little longer than a lot of us anticipated."


Aberdeen Proving Ground, a 72,000-acre military installation, started in 1917 as a center for weapons testing. The Army identified the base in 2005 as a site for expansion amid nationwide base closings, known as Base Realignment and Closure, or BRAC, adding high-tech research and development operations to the post that had been conducted elsewhere.

Between fiscal 2006 and fiscal 2012, about 6,250 new Department of Defense jobs moved to APG, increasing its DOD workforce to 22,450, including some contractors, according to a 2013 Government Accountability Office report.

Contractors followed, but not the 18,000-plus initially projected. Jim Richardson, director of the Harford County Office of Economic Development, said the number of defense firms in the area increased from 28 before 2005 to 105 today, representing an estimated 8,000 people.

"Companies have moved and established a presence and had front teams, if you will, but looking at a transition over multiple years, anticipating that larger wave, we haven't seen that fully manifest itself yet," said Karen Holt, regional BRAC manager for the multijurisdiction planning organization Chesapeake Science & Security Corridor.

The slower-than-expected growth reflects a mix of the economic recession, a country winding down wars in Iraq and Afghanistan, and a political focus on reducing government spending. Some families also chose long commutes over relocation. Unlike Fort Meade, APG didn't get a boost from the rapid expansion of the National Security Agency and growing cyber security operations.

"In the case of Aberdeen Proving Ground, the expectations were profound," said Michael Hayes, director of the office of military affairs for the Maryland Department of Business and Economic Development. "Things are measurably better now than they were before, but … there was inevitably a leveling off and some decrease."

That's reflected in Harford County's office vacancy rates, which remain above 36 percent, more than double most other markets in the region. Developers stopped building structures without tenants lined up. Not a single new office building is under construction there, according to a recent market report by Cassidy Turley.

At the North Gate Business Park, just outside the post's borders on Route 22, Columbia-based Corporate Office Properties Trust spent more than $50 million to develop three new buildings, representing about 285,000 square feet. The park — highlighted in the company's annual report as a drag on its overall performance — was just 38 percent leased at the end of last year.


At the Merritt Properties' Aberdeen Corporate Park, located about 2 miles from the post, Dorsey said the firm had expected the new jobs — better-paying than the positions the base had before — would boost the area's general prosperity, creating need for offices for accountants, attorneys and other professionals.

"Everyone was drinking the Kool-Aid," said Matthew Haas, managing director at Colliers International in Baltimore who has worked on leasing in the area for Manekin LLC. "We were all very excited about it. It was hard not to get caught up in the hype. … It just didn't take off like we thought it would,"

Haas said current estimates of $28 per square foot average asking rents don't reflect reality — landlords are usually willing to offer deals.

"Demand has been really lukewarm to say the least," he said.

St. John Properties, which has a special lease to develop and manage private buildings on the installation, tells a sunnier story. The firm recently signed its 50th lease, added a concierge service and opened a new cafe in June. So far there are 12 new private buildings on the post in addition to the federal buildings, representing 600,000 square feet that the firm says is about 88 percent leased.

"From zero, we've constructed roughly 600,000 square feet," said Al Cunniff, St. John's marketing director. "What is indisputable is BRAC happened inside the gate."


Cunniff said the on-post location — past a security checkpoint where visitors must present license and registration and submit to a retina scan to enter — drew tenants lured by proximity to customers, the secure location and fast, safe Internet access.

But even the on-base park was intended to be 2 million square feet at full build-out. There are no new buildings under way, and recent structures have been low-density, one-story rectangles. Cunniff said the company is not worried about running out of space any time soon.

An Army report published in June raised more questions about APG's future. It showed a decline in the post's workforce, identifying about 21,400 total employees in 2013. It also examined the impact of possibly cutting 4,300 military and civilian jobs to meet expected budget declines.

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"The continued uncertainties with the defense budget make it difficult, especially for small and medium-sized companies, to make decisions about expanding or getting new space," said Jill McClune, president of the Army Alliance, an advocacy organization for the installation.

Despite the budget climate, McClune and others said they are optimistic that the amount of space available at Aberdeen, as well as its focus on research associated with chemical weapons and technology, make it well-positioned if and when the military prepares another round of base closings.

Arlington, Va.-based CACI International Inc., which signed one of the earliest leases on the post and has some 14,000 workers around the world, employs 450 in federal buildings and private space at APG and expects more, said Ed Thomas, CACI vice president and a former DOD employee who moved to Aberdeen as a result of BRAC.


"We would not expand our footprint on a speculative basis, but we clearly plan to grow our footprint here at Aberdeen Proving Ground," Thomas said. "Although there are significant pressures on the Department of Defense budget, as you look out over the next several years, the fact remains that the work that is done here at Aberdeen Proving Ground is a very high priority within the scheme of things within the Army."

Colliers' Haas said he thinks the developers, who are local, will "wait out the storm."

"There is a brighter future ahead," he said. "It's just going to take time."