Tuesday, October 11, 2011

when MoCo wants to draw big businesses, it's "pay to play" (updated)

Busboys and Poets
This won't be coming to Montgomery County any time soon.

It looks like the former Borders on Ellsworth Drive will be empty a little longer: Andy Shallal, owner of local restaurant/performance space chain Busboys & Poets, says he won't consider opening a new one in downtown Silver Spring because the Montgomery County Council dipped out on a resolution asking Congress to cut defense funding. He and other peace activists held a press conference at the County Council building this morning to protest their decision.

Why did Montgomery County, renowned for its progressive politics by both the Daily Caller and Utne Reader, back down? While local businesses at Fenton Street Market are getting put through the wringer by Montgomery County bureaucracy, defense contractor Lockheed Martin got a direct line to the County Executive to express their offense. From the Examiner:
After months of lobbying by county peace activists, several members of the Montgomery County Council drafted a resolution calling for the Pentagon to drastically cut military spending and "end wars abroad." But that measure has been spiked after the county's largest defense contractor made its displeasure known and Virginia began courting that contractor . . . 
County Executive Ike Leggett asked the council to table the resolution because it is "a dagger pointed directly at the heart of Montgomery County."
Montgomery County has long watched the cranes rising over Tysons Corner with anxiety, openly wondering how it compares to Fairfax County and seeking to draw and keep large companies on their side of the Potomac. Aware that they can't beat the lower tax rates in Fairfax, MoCo works hard to show corporations that they're welcome here by throwing lots of incentives their way in a process that friend of JUTP David Moon compares to extortion.

Fillmore Sign
Live Nation is one of the large corporations receiving public money to locate in Montgomery County. 

And there are plenty of examples. Big-box retailer Costco will get $4 million to open a store at Wheaton Plaza. The county and state each put in $4 million to build the Fillmore music hall, which is operated by Live Nation. The county cleared four city blocks and closed several streets in downtown Silver Spring to assemble enough land for Discovery Communications to build its headquarters. When Marriott threatened to leave Montgomery County ten years ago, they got $44 million in grants, low-interest loans and tax credits to stay. Maybe Choice Hotels should've done the same: they received a paltry $4.3 million from MoCo, the state and the city of Rockville to move their headquarters from Silver Spring. (Meanwhile, Walmart just announced plans to open up in Aspen Hill without any public help at all, it appears.)

Lockheed Martin is perhaps the county's biggest coup: it's their largest employer after the federal government and county government, with 7,000 jobs, contributing $7.1 billion to the local economy each year. Nonetheless, they represent just 1.46% of the county's 509,000 jobs. By comparison, the 2007 Economic Census says that there are 8,000 employed in religious or non-profit organizations, 12,000 employed in "janitorial services," 15,000 employed in real estate, 23,000 employed by MCPS and Montgomery College, 26,000 employed in restaurants, 30,000 in "computer systems design" (which includes defense-related work, among other things), 48,000 employed in retail, and 54,000 people employed in health care (Adventist HealthCare and Holy Cross Hospital, the county's two main hospital systems, are among its ten largest employers).

Certainly defense spending is important to Montgomery County and Maryland, but not as much as it is in Virginia, which receives twice as much funding from the Department of Defense, according to this analysis from Maryland Politics Watch. But it's not the dominant industry in the county by a long shot. Not only that, but even if Congress spent more money on health care and education, the county would still benefit due to the presence of government installations like NIH, Walter Reed and the FDA.

Sensory Garden Towards Wayne Avenue
Montgomery County condemned four streets to provide land for Discovery Channel's headquarters.

The county was stung after pulling out all the stops for Northrup Grumman and Hilton Hotels, both of which are now in Virginia, and doesn't want Lockheed to do the same. But it should be clear by now that Montgomery's getting played. Everyone knows they don't have any say in congressional funding. But now that Lockheed knows Leggett got spooked their opposition to a symbolic gesture, they know he'll throw everyone and everything under the bus to keep them in the county.

Talk about a great bargaining position!

I enjoy Busboys & Poets and I agree with Shallal's argument that our federal government need not spend so much on blowing up foreign countries. Nonetheless, I think Andy Shallal's posturing is a little silly. As one of our intrepid commenters on JUTP's Facebook page pointed out, Shallal has a Busboys & Poets in Arlington, home to the Pentagon. And by threatening not to locate in Montgomery County unless they meet his demands, he's doing exactly what Lockheed Martin did. But unlike Lockheed Martin, MoCo isn't going to capitulate to Andy Shallal.

Which raises a new question: should Montgomery County be focusing less on a few large corporations, particularly those who work to blow up foreign countries, and giving more attention to smaller businesses who'd actually benefit from a few million dollars in aid?


jag2923 said...

"Certainly defense spending is important to Montgomery County and Maryland, but not as much as it is in Virginia, which receives twice as much funding from the Department of Defense"

This is EXACTLY why Shallal's whining is flat dumb. I'm in no way in love with Lockheed, but Shallal is embarrassing himself with such blatant hypocrisy.

andrea said...

Andy Shallal thinks too much of himself and always has

retgroclk said...

Please- "Corporations that blow up other countries..."
Get off it- without defense we would be open up to more terrorist, without defense- we would have not stepped into Bosnia,without defense we would not have ended the tyrannical rule of Hussein in Iraq. it is called defense not offense.
They employ thousand of people, contribute to the economy- dont let politics fog your brain.

Dan Reed said...

We spend a fifth of our federal budget on defense. We got Saddam, we got Osama. I think we can dial it down a little and start working on our schools (unfortunately, they aren't all as good as they are in MoCo).

A. Ross said...

Dan, political commentary aside (which I'm not agreeing/disagreeing), I completely agree with your breakdown of the numbers of jobs. Our leaders spend far too much time swinging for the fences, throwing tons of resources at big companies, when they could much more easily get lots of base hits with mundane businesses to locate here and bring a lot of jobs. Chasing the big fish costs a lot of $$, but also a lot of staff and leadership time, and IMO we should put our best foot forward quickly, but then not chase them down an endless road. Let Virginia blow their budget on a few of these companies and then we will have the money left when Virginia is tapped out.