Downtown Columbia burgeoning as employment hub

Downtown Columbia burgeoning as employment hub
(Jen Rynda, Baltimore Sun Media Group)

In the four years since the approval of the Downtown Columbia Plan – a master guiding document aimed at revitalizing the heart of Howard County's core city – Columbia Town Center's progress toward becoming a true urban destination has been marked by the addition of high-profile restaurants and retailers, the renovation and expansion of city landmarks and the construction of a new, modern apartment building.

This week, its progress will be marked by what some say is the biggest boon so far: the opening of the county's first Whole Foods Market, which occurred Wednesday inside the community's iconic, Frank Gehry-designed lakefront building.


But, according to county officials, the revitalization is not just about adding mouth-watering restaurants, high-end retail and arguably the nation's most coveted grocer. It's also about putting in the work and making downtown a thriving employment center.

"There has to be more than just some great retail and cool apartments," said Mark Thompson, the county's director of downtown redevelopment. "For the Downtown Columbia Plan to be successful, the employment piece needs to be there. And it needs to be there in a big way."


And although it hasn't been as obvious, downtown's growth as a destination for employers has grown in lock step with its other, higher-profile amenities. According to Thompson, in spring 2012 the vacancy rate for the 19 office buildings in downtown was 21 percent. In just two years, that number has dropped to 14 percent. If you exclude the American City Building – a nine-story lakefront structure with high vacancies that owner Howard Hughes Corp. is in the midst of evaluating – Thompson said that number drops to 8 percent.

It's a trend that he and others, such as County Executive Ken Ulman, say shows progress in the revitalization of the downtown's employment base.

"Town Center, like any downtown, can only thrive when it has balance," Ulman said. "There has been a lot of demand for retail in downtown, and the residential is coming along. ... but the important third leg of the stool has to be the office product."

Ulman said one tangible sign of progress was the July groundbreaking of Little Patuxent Square, a nine-story, mixed-use building in the lakefront neighborhood that will house 160,000 square feet of office space, in addition to residential and retail. The structure, built by Costello Construction, was the first new commercial building in downtown in more than a decade.


"Costello's project was important because it's a sign that the demand is there," Ulman said. "It's a really important validation of the economy."

Renovations and relocations

And while there has been no new office buildings in downtown over the past 10 years, the employment market has not been completely stagnant.

In February 2011, First Potomac Realty Trust purchased a dilapidated 12-story building next to the Columbia mall known as the Merrill Lynch building for $11 million. In September 2013, the building reopened after an extensive, modern $8.5 million renovation as TenThreeTwenty.

Now, almost a year later, the building has in excess of 30 tenants, which includes Regus, Merrill Lynch and Bank of America, and its vacancy rate has decreased by more than half.

Matt Wilson, vice president of First Potomac's Maryland region, said the building "needed a lot of work," when it was purchased, but the opportunity to get into downtown far outweighed the risk.

"A property like this, the location is just exceptional," Wilson said. "Finding a quality office building in an amenity rich environment. Those are the type of things we are finding tenants want."

Wilson said the building's quick rebound is attributable, in part, to what downtown has and will become.

"If you look what's happening here, you are getting more than just an office building," Wilson said. "It's a live, work, play. You are finding, across the region, it is really attractive to employers."

Likewise In 2012, Howard Hughes Corp., the principal land owner in downtown, purchased the former Ryland Group headquarters on the corner of Little Patuxent and Broken Land parkways. In less than a year, the building, now known as 70 Corporate Center, was leased to two tenants: Enterprise Community Partners, which was previously in the American City Building; and GP Strategies, an Elkridge-based consulting company that provides training and management consulting to Fortune 500 companies.

GP Strategies Executive Vice President and Chief Financial Officer Sharon Esposito said the company spent the last 40 years in between office parks in Elkridge and Columbia, but that it had outgrown that type of environment. She said they wanted to move to a space with access to amenities, somewhere that had more prestige.

"We are a global company traded on the New York Stock Exchange, and this location is our corporate headquarters. We have our executive team here, and it is where we hold a lot of our corporate functions," she said. "We felt the building and location fit the right image for our company."

Ryan Frederic, CEO and president of the downtown-based aero-space firm Applied Defense Solutions, said he moved to downtown in 2011 because he needs to be in a thriving, amenity-laden area to be competitive in his industry.

"Recruitment was a huge issue for us. Money isn't always sufficient in attracting folks," he said. "Having an interesting place to work is a huge value add to us."

Since he moved across from the mall's south entrance, he has noticed that he's not the only employer to recognize the trend.

"When I moved here, I never had a problem finding a parking spot," he said. "Now I can't find one unless I am here before 8 a.m."

More to come

Thompson said more and more businesses are following GP Strategies and Applied Defense Solutions lead in seeking walkable, urban work environments. He said it is a trend that has developed in the last five years or so, and is driven by an influx of millennials in the work force.

"Amenities are really important to today's talent, more so than being right next to I-95," he said.

Larry Twele, the CEO and president of Howard County's Economic Development Authority, agrees.

"What we are seeing is companies want to be where the talent is, and the talent wants to be where several amenities are nearby," Twele said.

In some ways, county officials say the demand has outpaced the supply. Earlier this year, jeweler Pandora announced it would be moving its headquarters from a Columbia office park to downtown Baltimore. The move was spurred by a desire to have a higher profile and more urban presence, and there just wasn't enough space in downtown Columbia to accommodate them, according to Ulman.

"Pandora would've liked to have been in downtown, but they were looking for an amount of square footage within walking distance to the mall that wasn't there," Ulman said.

And Twele said Pandora is not the only one.


"We have had several companies who want to be in downtown Columbia," he said. "They have been asking for large chunks of space that we haven't had available."


That will soon change, however, as Howard Hughes' Crescent development begins to come online. The mega-development, the first phase of which is in the midst of the county's rigorous 16-step approval process, promises to deliver 5 million square feet of mixed uses on idle woodlands located around Columbia's Merriweather Post Pavilion. Of that 5 million, nearly 2 million will be office space, according to Greg Fitchitt, Howard Hughes' vice president of development.

"Everyone is very interested in what the timeline is," Fitchitt said of the Crescent project, which could open its first buildings as early as 2016. He added: "There are a lot of people who really get what we are talking about with what the Crescent is going to offer."

Fitchitt said Howard Hughes wants to anchor the development with major employers, companies that likely would have never considered Columbia an option before.

"Those kind of major employers are one of the key focuses," he said. "Similar to a mall, you have your anchor stores and your smaller tenants want to congregate around the major stores. We want the equivalent down in the Crescent. Landing those big anchors is a key piece to be able to build the greater momentum."

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