County retail, hotel outlooks appear bright
Two economic studies predict rebound for U.S. 301 corridor
Despite recent high-profile store closures, the retail outlook for Charles County is bright as investors seek opportunities to expand, said Taylor Yewell, redevelopment manager in the county’s Economic Development Department. The department presented the results of its recent study of local retail trends at its quarterly business roundtable on Wednesday morning at the Waldorf West Library.
Yewell said the study found that the closures
in Waldorf of the Sports Authority last year and the HH Gregg store earlier this year were reflective of national trends in consumer buying patterns rather than indicators of the health of the local economy.
“Even with the closure of major retailers and shopping centers, investors are still looking to develop new retail experiences and retail opportunities,” Yewell said.
Charles County is attractive to retail investors in part because it has approximately 9 million square feet of existing retail space in the form of shopping centers, malls and freestanding stores. Furthermore, most of that space is located along the busy US. 301 corridor.
“I think the traffic count in Waldorf at its peak is about 50,000 cars an hour,” Yewell said. “So you can see the attraction to retail.”
The challenge, according to Yewell, is to find ways to help brick-and-mortar retailers compete against online retail, which accounts for 8 to 10 percent of retail sales nationally.
“Major retailers are jumping on the online bandwagon,”
Yewell said. “You can go to Macy’s and buy a watch, or you can go on the Macy’s website and buy a watch there. It’s still coming from Macy’s, but that doesn’t help the shopping center owners a whole lot because they’re seeing spaces go vacant. And that becomes a challenge for us.”
The Economic Development Department also conducted a study of the hotel market dynamics at work in the Waldorf area.
“Waldorf has a very active hotel market that reflects its location along one of the busiest U.S. highways on the Atlantic seaboard,” the study concluded. The department decided to focus on Waldorf because La Plata and Indian Head, while having name-brand hotels of their own, were considered far enough away to have their own distinct patterns of demand.
According to Yewell, Waldorf’s hotels are used by a healthy mix of business and leisure travelers.
“The two busiest days of the work week are Tuesday and Wednesday, which indicates business travelers,” Yewell said. “And then it spikes on Saturday, which means there are a lot of leisure travelers coming in to Charles County, staying in the hotels on the weekend.
That is a bit of a surprise. And I can tell you that it is good news for hotel owners and operators.”
“All the key indicators are positive and trending upward,” Yewell said. “Over the last five years, occupancy rates and revenue per available room have risen. These are all the things that potential investors look at before they make a decision.”
“We would say that Waldorf’s hotel market could probably support a new hotel,” Yewell concluded.
Michelle DeSoto, the department’s project coordinator, provided an update on progress with the new Gov. Harry W. Nice Memorial Bridge. She explained that the bridge’s budget has been reduced from $1 billion to $769 million as a result of narrowing the bridge to match the width of the approaching lanes. The plan is to begin advertising for bidders in October 2018 with construction to begin the following year and aiming for a grand opening in 2020.
Deputy director Marcia Keeth discussed some of the financial incentives that the county is making available to businesses that are considering moving into the county. These include small business loans of up to $30,000, targeted industry loans of up to $100,000 and Property Assessed Clean Energy (PACE) financing, which allows commercial property owners to finance energy efficient upgrades to existing structures as well as new construction.
“We’re going to be very aggressive about getting the news of those loan programs out there,” Keeth said.
During the Q&A that followed the presentations, Yewell, Keeth and department director Darrell Brown updated attendees about ongoing discussions with state legislators to allow the county to use tax increment financing (TIF) funds for mixed-use development. TIF funds are used to pay for typical infrastructure expenses and public amenities through municipal bonds. Unlike other Maryland counties, Charles cannot use TIF funds to pay for such features in developments that combine residential and commercial uses. Brown also revealed that the county is in discussions with a potential airport operator to purchase the Maryland Airport near Indian Head. Yewell also said that a “foreign investor” has expressed interest in building a hotel and resort center in Swan Point.