Welcome everyone to the Wednesday, October 15th meeting of Economic Matters.

Joining here in the chambers today are Alderman Savage and myself.

We are going to make one adjustment to the agenda today, and that is we are going to add uh 03725 to the agenda.

Do I have a motion to approve the agenda as amended?

So move.

I will second.

All in favor.

Aye.

Ms.

Jackson, I do not have the uh agenda in front of me.

Can you please tell me what's the first step?

Uh up first next is the minutes uh for our September 17th meeting of economic matters.

Uh yes.

Uh up next is the uh approval of the minutes for our September 17th meeting of economic matters.

Can I get a motion to approve?

So move.

I will second.

All in favor.

Aye.

Aye.

Up next, appointments and reappointments.

First, the appointment of Mr.

Stuart Cohen to the Alcohol Beverage Control Board.

Mr.

Cohen, come up to the table, sir.

Welcome, sir.

Thank you so much for joining us today.

Oh, it is usually are, and I apologize for the late start.

I got stuck on a bus.

So, Mr.

Cohen, um, thank you so much for joining us today.

Thank you so much for your interest in this position.

Uh, the question that I always like to ask everyone who expresses interest in our boards and commissions is uh what made you want to join our current uh joint want to join the alcoholic beverage control board.

I uh I was interested in participating in uh more participating further in city government, and I uh perused the list of vacancies on boards.

This one seemed the most interesting, so I submitted my request to be appointed to this board.

Um I've been uh resident of the city for I guess a dozen years and in the county and then in the city for oh almost 50 years now.

So I am uh have uh uh visited many of the establishments that would be uh under the purview of the uh committee, and uh I just thought it would be a very interesting thing.

I have time on my hands, I'm retired.

Uh and I guess that's the best answer I can give you.

I like the visited many of the establishments.

Familiarize yourself with the products.

Um Alderman Savage, do you have any questions for Mr.

Cohen?

Yes, Mr.

Chair.

So yeah, just looking at the so first of all, thank you for your interest, serve.

I know we have a number of vacancies, so really appreciate your time.

Um and just looking at the code requirements.

It does say members must have a demonstrated reputation for honesty, integrity, and character.

So I certainly think we both attest to that.

Thank you.

Familiar with with the kind of work you do in the community.

Um the other thing of this is have a knowledge and understanding of the operation of establishments possessing alcoholic beverage licenses in the city together with the laws and regulations pertaining to the establishment.

It sounds like you're familiar with those.

I have actually uh recent minutes of the commission, and I have reviewed the uh bylaws and uh the rules, and have uh with my prior legal background have been able to sort of decipher most of it.

I think I would be able to learn uh the necessary uh uh details quickly.

And you'll be probably joining the board right after the election, which I mean things should be calmer for your uh tenure on the board.

Good.

I don't have any other questions.

Well, we're both familiar with Mr.

Cohen's work in the city, and um I think you'll make a fine addition.

So with that said, do I have a motion for a favorable recommendation?

So moved.

I will second.

All in favor?

Aye.

Mr.

Cohen, your uh nomination will come up for final vote during our final city council meeting on the 27th.

Um, you can attend if you wish to, but it is not required.

Congratulations, sir.

So much.

All right.

Up next is AP6025, the appointment of Miss Nobel Watkins to the recreational advisory board.

Miss Watkins here.

Mr.

Nobel Watkins, I'm sorry, I'm trying to read that from a corner of my eye and getting everything up.

Uh Mr.

Watkins is not here.

Um I'm a little bit torn here because this is the final meeting, and if we delay this.

Well, if you do no action, it'll it can still go back to it.

Oh, that's right.

Yeah, we were a little preoccupied.

Yeah.

But yeah, let's get an all right.

So let's take no action tonight.

Uh for those who miss that, we can take no action tonight and request them uh Mr.

Watkins come to the meeting on October 24th.

Um, and that should give us our opportunity or October 27th, and that should give us our opportunity to interview and ask any questions that we have of Mr.

Watkins.

So are you agreeable to that?

All right.

So that said, can I get a motion for no action on Mr.

Watkins and a and then we can request that he attend the next meeting.

So move.

Second, all in favor.

Aye.

All right, up next, 03325, lease of city property market house.

Leonard, everybody, come on up.

Good evening.

Welcome.

Ashley Leonard, Assistant City Attorney.

Matt Flynn, Director of Central Services.

All right, welcome everyone.

So I believe that since our last meeting, we have had some updates with the market house lease negotiations.

Um they have very graciously, once we gave the tenants specific requests, um, our current tenants in the market house agreed to all of our demands because they are committed to making the partnership work.

Uh there was a hearing this morning in finance, and my understanding that the only request out of finance came from came as uh there is a current proposal in the lease that the tenants agreed to that the tenants must have a hundred thousand dollars of their own money expended into the market house renovations.

They agreed to that, but the finance committee requested that they cannot deduct 100,000 from performance rent unless it's tied to city approved capital expenditures.

I'm assuming we have not heard back from we have.

We have.

Have they agreed to that?

Yes.

But yes, they have.

They emailed me a couple hours ago.

Wonderful.

I think that is a very positive sign to show that the tenants have been nothing but agreeable and willing to be good partners with the city.

Would you please uh introduce yourself, name and address for the record?

Um 18 Bryce 21409.

So I think that has shown that folks at the markethouse have been agreed to be nothing but fantastic partners and agreeable to the city.

Uh fine tenants where I am coming from before I'll pass the floor off to you, is these are local businesses.

We want local community members to uh operate this space.

And frankly, I think if we get any more pushy, uh we might as well just give Alex Smith and the Atlas group a call because they'd be very happy to accommodate those demands and get another conglomerate in the space.

Alderman Savage.

Um I appreciate your willingness to work with us on this.

Uh I'm um really I do, and I I definitely um wanted to see your continue in the market house.

Um, I had the vote eight years ago to get you in there, and um people at the time thought it was a risk, but I think it turned out very well.

Um with that, yeah, I'm very good with um the new terms.

And uh Alderman Yeah, I think has been shopping up a bit to vote yes before even all of us.

Um so I won't speak fully for him, but I think he would agree.

So uh can I get a motion for a favorable recommendation on 03325?

So moved.

Second, all in favor?

Aye.

All righty, up next, 03725.

Added to the agenda.

City capital facilities charges payment plan.

Um, this is my legislation.

03725.

We may still have need of you because we're going to be talking about the market space.

So don't leave.

Okay.

Um3725.

So uh this is my legislation.

Um the premise, the uh synapsis of this legislation is that for small developments uh that we defined as six or fewer dwellings that you would allow be allowed to pay the water sewer installation fee before you are issued the uh residency and occupancy permit rather than all up front, like we currently do.

This was inspired by legislation out of Montgomery County where they were trying to tackle the housing crisis by allowing more flexibility in the development code.

Um I think this is very relevant because we just on Monday approved the Tyler Avenue plan, which is trying to encourage small scale development of six or fewer uh units on those lots, and as we try to find small missing middle housing, duplexes, triplexes, row homes in more areas of the city that can potentially accommodate um our affordable housing challenges.

I think legislation like this is a small but necessary step to encourage small community developers rather than large big players, and what I always like to bring up when it comes to small developments is it's very easy to finance building one detached single family home.

It's very easy to finance building one large subdivision, it's very easy to finance building one large apartment complex.

It's very difficult to finance building a couple smaller units because that market has been pushed out due to zoning laws and so many jurisdictions.

So every thing that makes it easier uh is appreciated.

And I don't know if you received a letter of support from the Maryland Builders Association earlier today to kind of get into a little bit more details on how that financing can really help out these smaller projects.

Um but I appreciate their knowledge on the subject and uh happy to answer any questions you might have.

Yeah, and it sounds like from the staff report, there are no concerns from staff then.

Um is that your understanding too?

Yeah, uh this was a lot of back and forth negotiation with our planning and zoning director.

Um I originally submitted as close to a carbon copy as you can get from what Montgomery County did.

Uh our planning and zoning director did not like that.

Uh, but after negotiating six units was a pretty good uh agreement upon a pretty good compromise between us because of the Tyler Avenue project and some of the next steps that we want to hopefully encourage for missing metal housing in the future.

Good timing.

Um could you explain more?

It says it does include a fine if the billings are properties occupied prior to the payment of the facility fee.

That was a suggestion from the planning and zoning director.

Uh the original legislation didn't come with any or when the the original legislation that I had drafted didn't come with any penalties.

Uh and he wanted to make sure that it came with penalties for if a builder tried to uh get one over on us and put in residents before they had paid their connection fees.

Uh and I thought that was a good idea because we still do need to collect our fees.

Um we are still building some infrastructure when they put this hookup when they put these hookups in.

Uh so we do have to get a little bit of something to compromise uh to compensate for that.

And um I thought the fine was a good way to make sure that they're still playing ball, but we still give them that flexibility.

Yeah, I mean, they still have to pay it, it's just delay, right?

Yeah, it's just at the back end and part of the rationale was when you're building it at that later stage.

You've already sold it, built it, got everything financed, and things are more secure, so more people are willing to invest in your project.

I see that's a good point.

Um makes sense.

I think it's really good timing, and happy to support excellent.

Uh, do you have any further questions?

No.

Sorry.

All right.

Uh so can I get a motion for a favorable recommendation?

So move.

Second, all in favor?

Aye.

All right.

Up next, uh for general discussions.

We are going to have two pieces for general discussion tonight.

First will be the uh lease negotiations around the market space.

And then next will be the general economic development update.

Uh, we do have representatives here from the market space.

Uh so I am going to invite them to the table first, and then I am going to ask city staff to give us some updates on where we are with negotiations, any potential responses to concerns that were brought forward, and we can hopefully have this ready and put to bed by our next council meeting because the market space is currently one of the best things to come out of the experimentation of the pandemic.

I would love to see that area plaza at some point in the near future, because if that were to go back to being a parking lot and pass through area for cars, that would be such a loss for the city and such a disappointment and such a massive step backward.

So, gentlemen, welcome.

Uh, please introduce yourselves and names and uh address and who you're representing for the record.

Uh normally for testimony, we only give three minutes, but since you are a panel uh and we need this to be an in-depth conversation, we're not going to do that deep, we're not gonna do that cutoff.

So we're gonna let this be a little bit more of a casual back and forth here.

So thank you.

Thank you, Mr.

Chair.

Thank you for providing the opportunity for us to come uh speak with the committee.

My name's Chris Hannon, spelled H A N N A N.

I live at 154 Drexel Drive and Saverna Park, and I'm one of the three co-owners of McGarveys.

Kevin Havens.

Um 359 Preston Field Lane, Saverna Park.

I'm also one of the owners of McGarveys.

Kenny Pemleton, P E M L E T O N 3501, Kingsley Court, Pasadena, representing one of the owners of uh Iron Rooster.

Welcome, gentlemen.

So uh before we get started, you please also state who some of the other uh businesses in the market space are.

Of course, the Middleton's Tavern, there's McGarvey's Iron Rooster, Federal House, and Market House.

And it's always good to clarify that sometimes market houses conflated with market space, which in some of the documents is being referred to as market plaza.

Market Plaza is a much better uh yeah, market plaza.

Student resolution.

Yeah, that's a good idea.

All right, we're gonna call it Market Plaza instead of space.

That sounds great.

Feels very European.

Yeah, that's much better branding.

Okay.

Okay.

So gentlemen, if you can please um give us a little bit of a timeline from your perspective on the background on um the for lack of a better word, kerfuffle.

Uh and I think especially around the bag meter rate, and what I really want to get into is the target for what still works for the market plaza businesses because we all know.

If we can't make the plaza profitable for the businesses, they will pull out and it goes back to being a parking lot.

Certainly.

Uh the the history goes back to 2020, during the pandemic, when there was uh considerations working with the city for the tents to take advantage of outdoor dining.

Uh, I do have a map if it's necessary at all, just to go because markets plaza is quite unique in that the businesses don't have their own parking spots in front of them.

So McGarvey's and Middletons do not have parking spots in front of them to create a parklet parklet, thereby we rely on our neighbors, Federal House, Iron Rooster, and Market House to be able to have a um to have to have the ability to have outdoor dining, and let's start at the concept for market plaza.

The city looked at data and came up with those spots uh we're earning.

There's 19 spots in question that we're talking about.

They earned about 80 to 85,000 in total in 2019.

Coincidentally, that was taken as a baseline number that's used in the Hillman parking agreement.

So there's no disagreement on what should be a comparison for revenue for those 19 spots.

The tenants, the five tenants agreed to pay close to 100,000 more.

So from the very beginning, it was a huge win for the city and a huge risk for the tenants, not knowing if we were going to recoup 180,000 approximately in those first years, but it turned out to go spectacularly well.

Over the we have a 3% escalating clause.

So at this current fiscal year, 2026, we should be paying about 195,000 collectively.

Baseline projections of what the Hillman parking garage was estimated to bring in is about 100,000 less.

So we pay an effective rate of $28.50 per spot.

The projections that were the baseline for the Hillman parking garage expected to make $15.50.

So we're already bringing in $13 more for the city per parking spot per day, $360.5 days a year.

Where we kind of came up of uh the awkward spot and where we're hoping to get assistance is uh in April of 24, Ashley sent out we renew our lease around that time.

We sent a message, actually responded, hey, we have City Doc coming up.

There might be an issue with renewing the lease.

We did point out that time that our lease allocate for that we would have to vacate the premises if there was work done on market plaza, but not necessarily on City Dock.

So the idea being there were discussions, would there be pumps a la New Orleans?

There's all ideas, is it going to be pulled up, turn in the cobblestone?

Those were all logical things, and the issues seemed to go away until this year and around the same time frame when we go renew our lease.

It was brought up that we may not be able to renew the lease.

When we talked to uh Matt, who came in, and we met with him in June.

We met with Ashley then in July, and that's where it appears the underlying issue was came to a uh a note, which is uh I believe it's appendix 10, but having read the Hillman parking direct, it might be appendix nine, where there's the bagged meter rate is what seems to be the hiccup as best I can do without being attorney.

And that is that within City Coast, explain to me the bag meter rate we had was $35 forever and for a period of time, and at $2 for a parking rate, $17.5x multiplier makes sense.

Except the Hillman parking garage agreement doesn't say that.

It says against the prevailing rate, which means it really should now be 17.5 times $3.50, which makes for an effective rate of $61.50, which is wholly untenable and unable to be paid.

That's as best I can understand where our issue is because from economic standpoint, it's in the best interest of the city to have $100,000 of extra revenue beyond projections coming in.

If we were to not be in those spaces, clearly we would the revenue forecast by the concessionaire would be more accurate because someone's not parking in that spot 24 hours a day, seven days a week, 365 days a year.

It's good for the city, it's good for business.

We've created a plaza that is a downtown lifeblood and heart of the city.

It's good for our businesses.

We'll be the first to admit it.

It helps us substantially.

It probably employs about 25 people.

And as much as we've scoured for the past five months to figure out what might be a potential issue.

We've encountered no one who hasn't been enthusiastic supportive of market space.

And even the team within the city has said we want this to happen.

We want to make this happen.

Everyone wants to make this happen.

But as it stands right now, it's October 15th.

We've been told that technically our lease is over today, although I'm not sure that we have a lease, and it's unclear what we're supposed to do at this point.

So in the case of the current agreement that we have you all working on.

Although it's my understanding that we don't actually have a current agreement because we're trying to negotiate this hence the other legislation of waiving late fees because we want to get this sorted out.

What is the current price per space per day that you are paying approximately?

We're paying an effective rate of $28 and 50 cents.

And we pay that throughout the entire year.

So as a parklet model, which has been some other businesses are working under at $35, they're paying that only during peak season.

So they pay that from April to October 31st, which then obviously would make that effective rate lower.

And that's per space per day.

Per space per day.

And that is year round versus the current parklet model where we only get that seasonally, correct?

That's correct.

Thank you.

Um increasing it to even that $35 number back meter rate would not make the plaza tenable for each of the businesses, correct?

And I think that's the appropriate way to look at it is this is a very unique situation where if it's a parklet and you were discussing this simply with McGarveys or simply with Iron Rooster, we can make an independent financial decision based on our own.

If we want it, we pay, we go into agreement with the city.

If we fail to pay, then you take away our parklet.

That doesn't work at market plaza.

The problem is that what may work for McGarvey's doesn't necessarily work for market house or for a middle tent or federal houses that we're not privy to everyone's particular financial situation.

So for us to get to a table to agree is catching lightning in a bottle, and that's kind of why the rest of them haven't appears that for lack of a better term, McGarvey's has been elected to kind of lead and be one representative voice, but understanding or hopefully portraying everyone that what may be good for one business isn't really good for the rest of them, and we're not in a position to be able to speak for those businesses.

I think it's appropriate at this point to bring up the question of interest that what came to a light is that we weren't even aware, Megarvi's, that there were interest payments that may have been due, or what the payment schedule is, or how other businesses are interacting with the city, because that's not our privy.

There's five separate leases that go that are signed with the tenants of market plaza, but we're not privy to did well, we'll just do Ken because it happens.

We don't know that Iron Rooster sent their payment on time or they wouldn't send it in five days late.

We can only speak for ourselves and say we've sent everything in.

But I do that more not as a nitpicking thing.

It's more as an um illustrative of it's a very unique thing.

A parklet model is not necessarily applicable here, nor is just saying it's $35.

If if we're $35, we may say, great, $35.

That doesn't mean that, say, Iron Rooster thinks that $35 can work within their financial situation.

So all five parklets go away.

So the best the solution we've been asking for and proffering is within Section 10 or appendix 10b of the Hillman parking garage, it does allow for an exemption to that rate if it's deemed that it would be financially better in the interest of the city and the concessionaire to continue with the parking rights that are in place.

2850 is better than 1550, no matter how you cut it, and we already have an existing framework to work within that.

That would be our preferred method to go.

But that's your long-winded answer to does 35 work for everyone.

No, is what they've personally communicated to us.

But more importantly, we couldn't even tell you if that's the case.

There's no way we would be able to tell you if that's accurate or not.

And uh for me to put it in my own simplified, just got back from the hills of Maine way.

Uh if it done work out for all of you, the whole house of cards sort of collapses.

That sounds great.

The people from Maine clearly have it down pat if it doesn't work for one of us, it probably doesn't work.

That means all of us would have to assume um obviously 25% more payments, and then that just is a cascading effect, is that all of them would fall if one of these can't make it work.

And they've given their commitment that as they've assigned the lease, the projected payments, the escalating 3% per year, which takes it over 40 dollars in the next 20 years for those spots that they've agreed that they can make that work.

It could be as simple as a health issue or something like this that happens to a small business, that affects the four of us.

So even if they agree that they could do 35, that doesn't mean necessarily if they do that they'll be able to fulfill it, and thereby the entire market plaza goes away because one business wasn't able to fulfill a contractual obligation.

I keep referring to that more than just say it's a very unique piece that's not as simple as a $35 citywide or at least historic district wide parking rate for a bag meter.

We have something that's working right now.

Let's just keep going with it and request an exemption under 10B.

Uh that is all of the questions that I have.

Alderman Savage, do you have any questions for the market plaza?

Uh yes.

Um I entirely support what you're doing.

Um I guess yeah, a couple questions.

And it seems like just again, I'll repeat this as often as that like I need to, but with uh we've we have learned with Tilma Garage that um it's very rarely filled, it's only filled the only month it was filled the past three months.

Well, from June, July, August was August, and that was only three times that month, and that was from back sometime in the afternoon.

So my point with that is um most of the time there's plenty of capacity in that garage, and I think that means we also have plenty of flexibility with parking spaces down there as far as whether or not we actually have them or need them.

Um and so yeah, so I guess because it sounds like that's one of the hangups is there's something with the contract with premium that's preventing Medco.

Um so and I will have an ask uh a question for you, Miss Leonard.

Um, thank you for coming up.

But I have a question for you all still first.

Um, how's your business done the business is done like without the car parking there?

Uh because I know we know we do often hear from businesses they don't want to lose any kind of street parking.

Uh have you seen it?

Is it been a bonus for your or a hindrance to your business?

I I think there's three answers.

Uh, and thank you for asking the question is that one we advocated that it's great to have a uh pedestrian zone as your downtown center that's in keeping with what every modern city is looking to achieve, not the take away pedestrian zones so they can put in 19 parking spots.

Anecdotally, those spots were rarely, if ever filled by customers, and that often staff would take the spots, look for the meter enforcer to come out and just pay ahead of that time.

So it was never particularly useful for our customers.

But I think the boat shows probably the clearest example is where we wipe out all that parking, and I think everyone would say their revenues are some of if not the highest point of the year during that time.

So parking is not critical for what we're trying to do.

And then I think that goes to the plan of even City Doc of making pedestrian zones is that we can figure out how to get people downtown.

And I I interestingly did see your testimony in the March 29th, I think council meeting where you did point out I think it was for a couple hours on a Saturday afternoon is the only time Helming Garage is full, so it's not even a matter of we're taking away particular spots, they're just being moved into Hilming Garage, add a hundred thousand dollar bonus or waterfall payment beyond the projections or what could reasonably be expected to be generated from those spots.

So again, we keep we keep going.

It's a win-win-win-win win.

It's even a win for MakeCo.

Yeah.

Oh, yeah.

I mean, I wish you could make it refusing to share that information with the council, but um based on what we know it's been very even more successful than they projected.

Tells me they should have flexibility.

Um yeah, I mean, personally, I would love to extend the plaza even further to the end of market space in some fashion.

Like we've seen plenty of places where they you could still have some amount of through traffic where um you know closed the parking spots for more seating or any or some other public use, but cars still because cars in this case are just becoming from a residential community.

Um, but I don't want to get too far afield.

Um yeah, so I guess what that is that the main so I guess for staff, the main I this is the first, maybe I just didn't realize it or connected the dots, but you the so you right now your lease ends when we don't know.

You don't know what it's uh it technically would have been renewed on July 1st.

Um we were given instruction to hold off until we could figure out if something could be negotiated.

Uh we've tried to pay, but there's no invoice to pay against to even continue the lease.

We've been told it ends on October 15th.

We've been told it's come back through all turnips.

So for instance, we even were interested, we celebrate the Marine Corps birthday and would consider putting up a large tent to celebrate the 250th birthday of the Marine Corps.

Well, the problem is that is there a lease that would even allow us to put request to put a tent into that area.

So I again I trust that the the concern is not overwhelmingly that we feel the city is every representative from the city has said yes, we want this to happen, but it it keeps getting more and more convoluted the longer and longer it goes away to the point where we don't have a lease right now.

Okay.

Um, what's your update on that?

Um so Ashley Leonard, Assistant City Attorney.

The way the five leases are set up is that they had essentially automatic or at tenant discretion annual renewals if they gave a certain amount of notice on the same terms and conditions, which would have happened July 1st of 2025.

We did receive notice from all five that they wanted to renew.

The caveat is the renewals condition on them not being in default.

Two of the three have sort of outstanding unresolved issues related to interest and rent.

So three technically auto-renewed, two renewed with sort of the caveat that we had to resolve those issues, which is why we had the resolution that we put forth related to the interest.

So technically, that is what happened given the overlay of the Medco concession agreement.

We sort of put a pause on what the rent amount was, were we going to need to adjust that?

Um, were we gonna have to terminate?

We never did sign um, so we initially thought we were going to have to terminate in October just based on the change in the administration and how things were proceeding with Medco.

We have put in a request under appendix 10 for what's called an alternative rate and an alternative use.

Um that is under review, um, but we have not received word back yet on whether they're going to approve the alternative use.

Because technically, under the concession agreement with Medco, Medco has control over both Hillman Garage as well as most of if not all of Ward 1 street parking.

So they are the ones who can direct how those spaces are being used.

If the city steps in and says we want to use it in a certain way, we have to get their permission, and sometimes there are financial repercussions depending on how the city requests impacts their finance.

So when you put in the request under appendix 10B, what you're saying is here's our proposed alternative use.

Here's the rates we would like to collect from the people using it, and we believe that it's not going to negatively impact you.

Then have to do their own analysis about whether they believe that is true or not.

Um they can request us to do like more detailed studies related to the financings if they think there's some question.

We haven't been asked to do that yet.

So that's sort of where we're sitting.

Is technically speaking, the leases did auto-renew on July 1st, but also technically we have to sort of run this and get permission from Medco as the holder of the spaces, so to speak, to continue pursuing it and to also confirm what rate we should be, you know, what rates going to be collected and charged for those spaces.

So that's what's still not resolved at right now.

Well, all right.

Well, the other question be was so what's what will happen if the resolution passed the interest resolution?

Yeah.

Well, that would just take care of those are sort of two sort of side, they're running parallel issues, but they're not Medco and AMRP don't care about that piece.

That's a piece of um under the city leases themselves that technically we have to resolve those because technically it's the default under those leases.

So if we're going to continue this partnership forward, um in any respect and hope you know that Medco comes back as a you know, agrees to our request, we still have to clear that.

That needs to be cleared regardless of what is happening with AMRP and Medco because technically per our books, there is money owed to the city for potential rent and interest, and we either need to collect that or have it waived, regardless of what happens in the future.

That's an ongoing present day issue.

Well, so like, I mean, the thing that gets me, yeah, it just continues to aggravate me that this whole deal.

I know it's not your fault.

The whole I do not take it personally.

Deal with the with the parking garage.

Um, you know, because I think ultimately, you know, we're the ones who have the power from state constitution as a municipality and and city council, etc.

etc.

And I think and when it comes down to it, I'm assuming ultimately we have power over as far as what the what these spots parking spots, which are the the city's right-of-way, our property, as far as how they're used, I get that that so I think the question more so comes down to the finances, right?

Yes, it's I mean, ultimately we can pass leases and allow use for it.

But there are if we get their if we get the request grant it where we say we would like to charge this rate and they say agree, then we can pay that rent or that rate.

If they don't, then we can still do it, but then we have to do that 17 a half multiplier.

So it would be a much higher rate, and somebody's can you explain that again?

The happening basically there's a provision that says that the city can direct Medco to use the parking spaces in a certain way that Medco would otherwise not do.

Okay, for in this instance, at least the parking spaces out.

But if we do that and we don't ask for and receive an alternative rate approval from them, then we have to do the prevailing rate times 17 and a half, and that's the new rate that we would have to pay per day, which gets up into the $60 per day, right?

So it's not a question so much of whether or not we can allow it, it's a question of how much it's going to cost to do it.

Okay.

Well, you but but my point.

Yeah, and it potentially costs the city because we would be on the hook to pay the 17 and a half.

Okay, but my point is though, like with all my leading question there is like we know they've told us repeatedly, oh, the parking garage is doing better than we thought.

Right.

They're getting more money from that garage, it's not even filled.

So my point is, according to their financial model, which we've been trying to get some of us access to, they're we're exceeding their assumptions.

So there must be wiggle room in there as far as reducing the fees here, and you know, because they don't need them to make their model work, right?

And that's which is why we had no problem making the requests, but at the end of the day, you're talking about multiple layers.

So Medco is a quasi-governmental entity, but it also has its own bondholders and it has in its own besters.

So they can't just unilaterally make the decision, they have to run it through a very long chain of people to get approval for um because it involves governmental funds and bonds and bondholders.

So it's not that I think at the end of the day, I I think we're on a good path to get an approval from them.

That's my hope.

But they still have to go through all of their checks and balances before they can give us a yes.

And legally, I can't say we have the yes until it's in writing.

And as far as the waterfall is that waterfall just on the garage, or is it on the all the parking assets in their area?

It's everything.

Okay.

So that yeah, I mean, that again works to my point.

We should have flexibility.

It's not locked in in a spot per se.

It should because with the waterfall is they're guaranteed a certain amount, right?

And anything over that is the waterfall.

You're asking a lawyer for finances.

Um it's the waterfall is like, yes, they get locked in for a certain amount, they have to cover all their costs in a certain amount, and then in excess, if there's extra a waterfall, then it comes back to us.

Right.

Um because that's because if it's assuming like it's but there's no there's no guarantee to the city.

No, I do I get that.

But I'm it's so, but as long as we as long as they're getting their minimum for the waterfall, we have all this other room play with as far as the waterfall money that's actually coming towards us.

So I think as a council, we just have to figure out uh in the end, because in the end it's not gonna, even if we change these prices, it's not gonna matter.

We lower them, raise them up because most most likely not a lot of spots.

Most likely, we will still hit that waterfall.

They will still hit their minimum cap because they're still gonna make enough money.

They're not gonna see a difference.

We're not gonna see difference.

It's the waterfall is the waterfall.

play with as far as the waterfall money that's actually coming towards us so I think as a council we just have to figure out uh in the end because in the end it's not gonna even if we change these prices it's not gonna matter we lower them raise them up because most most likely not a lot of cost most likely we will still hit that waterfall they will still hit their minimum cap because they're still gonna make enough money they're not gonna see a difference we're not gonna see difference it's the waterfall is the waterfall um and so I guess you know again we can use that how we see fit so at this point I mean I kind of like inclined to if we pass and we probably will pass the resolution but what do we need to do to sort to allow them to continue to use the space could I uh I there's one interesting point in this is that I've done the financial modeling for them because they provided it all and their solicitation to bondholders so that's why I keep coming back is that it's not even a matter of the city is giving this five tenants a break the city and or their partners stand to lose a hundred thousand dollars per year if they just revert to turning them into nineteen parking spots.

So it's not even a question should it be 3551 is going if we weren't there paying 2850 per day 365 days a year based on their own assumptions and projections they would be making $15 and 50 cents per spot that's a hundred thousand dollars per year or three million dollars over a 30 year agreement with over the Hillman parking garage.

Because this isn't even a question are we getting a discount rate the question is do you want to throw the baby out with the bath water we're overpaying.

Well who where's their does their money so you I know so right now you're paying the fee based on the spots but is that where's that fee going is that going to us or is that going to medco so well so in some ways this is why the discussion has been has been complicated because um you've got you've got the question of the the amounts but right now what happens is that's an agreement with the city so those funds come to the city the city actually does already pay medco that 17 and a half times rate to medco so the city makes up that difference now.

Why are we paying it to them now?

Because that's the contractual obligation right but why with I thought that was only the obligation if we changed the with well hold with me okay but with the uh the understanding then as we've said that there's um the performance has been um has been good and so that money in in some sense sort of comes back to us right um so yeah I think I see what you're saying so part of what we've been trying to do but that's time and everything on our part to do all those calculations write the check have it come back right like just all of that shenanigans so part of the discussion has been is there a way to simplify that right so we don't have to do all the rest of that the first discussion I think we had was is it possible for that relationship to be more direct just on the parking side for a variety of reasons that turned out to not be a good idea we're we're back to just core lease and and all of that but that's why we asked Medco look everything's fine can we not do this can we just make everything line up I I don't think in in some sense the question on the city side this is why part of why the city is supportive we the argument the argument that you're making you know everyone agrees that the net benefit to the city is to have an attraction there brings in more people than you'd simply have if they were parking spots um so it's really around to Ashley's point are we in a position where legally we can say this is buttoned up right I don't think there's really disagreement about intent.

What do you mean what's the biggest what's the button up part is whether we have to keep paying the 17 and a half multiplier as as Vicky pointed out we are paying that and we've we've had to back pay that all the way back to 2023 because when we signed the concession agreement at that point we were supposed to end and pull all of these leases out and medco is supposed to take control of these spaces the leases stayed but as of June 2023 they were now being used as directed by the city not as directed by Medco and if the city is directing it then that's 17 and a half multiplier hits.

So we've had to pay the 17 half multiplier since June of 2023.

I don't know and again most of it most of it is coming back because the financials are good.

So we're having to spend staff and administrative time to do the calculations and pay the money and then wait for it to come back around and put it back in pots.

So there's a lot of like just I mean well, it doesn't sound like a relative, a huge amount of money for the city.

17% is probably because you mentioned.

I think you probably have some of it calculated.

Well, they're paying, they started paying because theirs goes up every year.

So they've been paying in the 20s, $20 per um space per day rate.

We're having to cover closer to $60.

Why is it going up every year?

Theirs goes up every year.

They haven't escalated.

Our leases escalating three percent.

Yeah, they have an escalator.

And the beginning of that number's 25%.

I'm confused though.

So but you're replacing, you're paying for a the replaced parking revenue.

The fee, the part of the way we negotiated the lease was a pure rent.

It wasn't based on parking.

So when we negotiated the lease with them, it was based on uh we came up with a sort of uh that we they ran their numbers, what they could do, they put a proposal forward completely separate number that had nothing to do with any adopted rate.

I guess I'm kind of curious.

Like, what is what do we require them to pay in the lease and what do those spaces actually cost, which is plus the 10%, which is what we have to pay.

No, we have to pay we have to pay 17 and a half times the prevailing rate, which is around three dollars and change prevailing rate of the the space.

So, like if you were to go pay like the hourly space rate, we have to pay 17 and a half times that rate.

That's what we are paying to Medco.

They are paying us as of this year 28.50 cents per day.

So we've had to make up the difference between what they're paying under the lease and what 17 and a half times the prevailing rate is.

The city is covering that gap.

Well, what's that difference?

That's what I'm interested in.

It's about 30 some dollars per day per space, right?

I don't know.

Again, again, I'm not the financial Dr.

Morray or Director Maureen would have all the numbers, but we're talking we're talking about maybe not quite double, but around there.

Um, last thing I had, Mr.

Chair was just like I I want to figure out how I my bottom line, I think for both of us, we want to see the lease continue.

So how do we make that happen?

I would say first we have to clear up the interest issue because that's yeah, that's that's the first the first one is passes.

What do we do?

What do we need to do?

If we clear up the interest, then we would probably need to do um well for right now with their leases would run asuming we as written through June 30th until the next renewal.

So next this year.

Yes, which they would need to renew in about April.

In the meantime, like I said, we have already submitted a request to Medco to ask for the alternative rate, but basically saying Medco, can we charge them what's in the lease and not have to pay the 17 and a half multiplier?

So we've already put that request in.

If that's granted, that will clear things up.

Um for now, and then the long-term thing, if medco is amenable to it, is to amend the concession agreement to change appendix 10, perhaps.

Uh and again, we've made some suggestions to them already to that fact to sort of better accommodate these sort of unique situations.

So that would be the that would be the the long-term fix would be an amendment to the concession agreement.

Okay.

So uh just for my clarification, you said the lease is now continuing until next June, correct?

Correct.

Provided, well, for three of them for sure, and the other two, you need to c we need to clear up the interest, and then they can continue.

Yes.

So this is kind of showing and highlighting a lot of my frustrations that are agreeing emerging out of medco, where I feel like they're not being good partners to us.

And the continuing emergence of if they're willing to if if the fact that this is in doubt when we know this deal makes more money for everybody when this deal creates better community space when this deal helps our small local businesses when this deal builds a genuine community space, but Medco still seems to be dragging their feet on this bothers me greatly.

And I don't know if I'm just getting that impression due to other frustrations with the agreement or not.

That's entirely possible.

When are we looking to have this sorted up?

Because we're about to go into a new administration, and that uncertainty is not good for these businesses that we all want to see continuing.

Do we have this likely to wrap up by November 4th?

I can't make any guarantees at this point.

We have the city has progressed this as far as we can.

Um I know and not to excuse Medco, but Medco is evaluating a number of requests from the city on various things and changings for operations, and they're wanted to review them collectively.

So every request we've put in to make a change rather than evaluate it piecemeal, they seem to be evaluating it collectively.

So every time something new gets added, for they sort of pause their consideration and they pull the latest thing in to do a bigger evaluation.

Um so for instance, like the outdoor dining bill sort of give them a pause, they wanted to review how that sits.

Um and again, I'm I'm speaking of my impressions of them, not you know, the the name change, even though we're willing to pay for it, you know, the name change is another thing.

Um the scope of work, um, there's been changes in scopes of work, there's been changes in fees.

So every time there's been a I would say a good amount of that within the last year, and so every time something new like that comes while they're doing their evaluation, they kind of pause the evaluation to pull that newest piece in to the evaluation.

So that's kind of why it's taking so long is that the city has made a lot, not a lot, and not unreasonably, but that has made a number of requests within the last 12 months that change not only their financial model but potentially equipment and operation, and so they're collectively reviewing all of that, and I think as far as this particular situation is concerned, until and unless we have something to deliberately change to, we should continue on as we are.

We we have leases that are renewed, right?

Everyone seems to be happy with that arrangement.

We have the the one question that's in front of you guys now, but aside from that, like we should continue as we are until and unless there is a reason not to, and right now we have requests in for some things, but we don't have answers, so I don't have anything to deliberately change us to I'm going to be frank.

This is kind of my line in the sand with men where if they don't play ball with us on this, I'm getting to the point where I want to rip the dang contract up and do the divorce papers because for the past two, three however many years I have felt taken advantage of and I've hit a point where this has become the hill I want to die on, and we shouldn't put that in the negotiations, but I am sure someone listens in on these meetings, and I know they are possibly hearing that savage, the final word.

Yeah, I agree entirely.

Um I I see Medco based on our least uh past experience, the current experience is not being a good partner.

I think I see them as being a huge barrier moving forward as we seek to embrace new urbanism concepts, principles for downtown as far as shifting to more pedestrianization, um building community.

That's what it all comes down to is building community, and I don't see them as a partner.

They seem to be a barrier.

Um so I'm right there with you in that.

Uh and even from an economic standpoint for today to your point, Mr.

Chair.

You know, I think we need to give you certainty, and I think I can I'm sure that the chair would agree as far as I think we were willing to do whatever we need to do to give you that certainty.

And if that means uh getting something inserted into this resolution that some states something along the lines that the council resolves to continue this lease until and possibly through June.

I mean, that's gonna be up to the next council as far as just pass next June, but we can at least say two and possibly seating June to give you that certainty.

That I think that'd be one potential way we could do it.

Um we may have financial issues to work out, but um, you know, we have our own community goals, but we also have presumably legally binding lease agreement.

Um and I don't like the idea of having the MegCo agreement trump everything else.

Um, but and to Miss Leonard, you know, this is uh you're incredibly capable.

I've learned that over the years.

This seems like a full-time job dealing with Medco.

Um, I mean, I'm seriously just hurting me like maybe we need to if if we continue with MegCo, and even if we don't, we might need to look at getting a third party to kind of work with them through these things, like some legal firm that's gonna actually have not just one staff who has a lot of other things to do working on it because again, as we move forward, we're gonna be having even more making even more changes to downtown parking.

We have a bunch in the pipeline already.

Um I think it you may hire whoever you would like.

I will still be here.

Um I know there are discussions with um with all of our leases about staffing things potentially differently with all.

But I'm while I'm hearing until you get someone else in place, I'm happy to continue on.

I do have a I think a pretty good working relationship with Medco's representative at the moment.

Well, how much of your job do you say it takes?

Right now, I mean, I don't know.

I not that not that much.

Um Medco's just likes things very much eyes dotted, T's crossed.

That's just so they just they just want the paperwork in place.

But once you figure out what the paperwork is, that doesn't take me all that much time.

Okay.

Well, do you want to make a recommendation or anything as far as like we could move forward anyway?

I think we can move forward.

Um there's unfortunately not much we can do at this stage, which also frustrates me.

But when we are here again next term.

Well, you all have seen my temper when things aren't addressed to my liking.

Can I make one request, certainly for Miss Us Schreuter?

Um, could you look at the resolution that's gonna be on the next agenda for the market space?

Uh the interest forgiveness, and see if we could work something in there to speak to the lease as far as our re resolution to continue uh and support the lease to at least uh this the end of the term, which is June, end of the the uh okay, yeah.

Thank you.

End of the fiscal year, which is when the lease ends, right?

Well, gentlemen, I wish we could have gotten you a little more solid answers and certainty tonight.

Um I hope you are at least taking away that we on the council have your back.

And at least one of us will be guaranteed to be here next term as long as you can get at least one vote.

Uh and should I return?

I will be fully in your corner again before we end this part of the update.

If you wish to say any final words before we adjourn this portion of the meeting.

And we thank the committee very much for your time and uh listening to us and supporting us.

Thank you for giving us so much time this evening.

Thank you for providing the information that you did, and it's given us a lot to be able to noodle on for lack of a better word.

All right.

Thank you.

Uh and our final portion is ID 2325 economic development update with Miss Stewart and our new economic development manager, Scott.

We'll start with the introductions.

Um Hope Stewart, uh economic development office.

And we are happy to have Adam Stratt as our new economic development manager.

Adam can introduce himself, but he comes from Allegheny County, but he is from this area, grew up near in Annapolis or in the Annapolis area.

He has a big background in information technology and the circular economy.

So I think he'll bring a new perspective to our office.

So I oh, but before we continue, I would like to thank Alderman Chandelmeyer for coming to the Annapolis Boat Show last week to launch our new Marine Trade Apprentices Show program.

So we're very excited to get that off the ground.

Thank you.

Um for your update, uh Alderman Savage.

Last Friday, we formally launched the apprenticeship program that we have been working on for the past four years.

Uh we already have one very excited young man who has signed up for an apprenticeship program.

Uh I got the chance to meet him, talk a little bit about his goals and his background.

And we are very excited to continue this.

Uh, I've had meetings with the Seafarers Union uh who reached out to me about interest with this program.

The Maritime Retailers Association has reached out to me about this program.

Uh we are going to be looking for meetings with Dr.

Bedell and Joanna Tobin, our school board representative, to find ways to get into the schools about this program.

Um this is one of the most exciting job creation programs that we have launched in Annapolis, and I think this committee should be really proud of its work.

And Ms.

Stewart, you have been at the helm to use, I believe, the proper boat term.

Hooray of this, and it could not have been possible without you.

So thank you for your incredible work on it.

Yeah, thank you.

I don't give a lot of compliments.

You seem kind of shocked by that.

It's like, where's the backhand?

Well, I would like to add to, I think this is a great example of what we do when we work with our partners as well when we bring in people who are experts in areas and we can meet a need in the community, and we were able to address this through the economic gardening program as well.

So we're excited that we're continuing our momentum.

Hell yeah.

All right.

Sure to, oh, okay, sorry.

I'm not used to these.

We Allegheny County was a smaller jurisdiction, and we didn't need microphones.

But uh, it's a pleasure to meet you all in person.

And I do apologize for not attending the last meeting.

I wasn't aware of it, but thanks to Ms.

Jackson, I am now, and I have a block on my calendar, so I'll make sure to attend every other one.

Um so as Hope mentioned, I I do come from another Maryland jurisdiction, but prior to that I worked in technology.

Um I spent a little time in Latin America as well.

Uh, earned my MBA in São Paulo, Brazil, and then I spent some time in Miami where I earned an MA in uh sustainable development uh University of Miami.

Uh from there I pivoted to economic development, uh, working four years in Appalachia.

So I just wanted to give a quick back background.

Uh, my focus is on uh, you know, as Hope mentioned, sustainable industries.

I'm hoping to bring some of that expertise here.

I did grow up in the area, and um the other area of expertise that I I have is in uh affordable housing.

Worked on a number of affordable housing initiatives, including a uh uh a development.

So um, well, without further ado, I want to uh get into this uh update here, and I apologize for getting it to you so late.

I did uh have a speaking engagement yesterday at the um Maryland Energy Innovation Accelerators Climate Tech Exchange.

I was a panelist.

Um, so I I was able to um get get this collated for you today.

So uh a little different this time.

I included some of the traditional or I should say uh data that you're more accustomed to that Hope provides, such as vacancy rate.

So as you can see, vacancy rate actually went down uh month over month from uh 4.7 to 4.6%, and that's for uh commercial uh real estate.

Yep.

I don't have a further breakdown than that.

But um I wanted to give you a little more context in terms of um in terms of new businesses because I know that you haven't you haven't had a report since July, I believe.

So just to this is all permitting data.

So to give you give you some background.

Um right now, and I'm gonna get into this a little more deeply.

Uh right now we're we're doing two things.

So we're onboarding a CRM, which will allow us to respond more effectively to constituent uh businesses' concerns.

But to do that, we need a baseline data set.

And hope's been operating off of one that's that's pretty robust, but it's not it's not a living document like the permitting data is that data comes into the system, it documents the businesses, it documents their their contact information and then uh additional information about those businesses that that we can leverage ourselves.

So um that's what we're pulling from.

It's not a complete data set necessarily, but it's enough for us to create a baseline.

So as you can see here, I want to just yeah, you can look at the numbers.

I don't need to go through each one of them, but I do want to draw attention to somewhat of an outlier.

You can see in September, uh there's listed 206 part-time jobs.

Now, just to be clear, that's um the actual number of jobs is six.

200 was listed because it was a change in ownership of a um of a larger employer.

So uh I'm not I'm not gonna get into the specifics of it, but I just wanted to do to highlight that to illustrate how the data is only as useful as you can as you can qualify it, right?

So um yeah, that's right.

Sure, yeah, it's a retention of employees, I suppose you can look at it that way as well, considering um it was a sale of a business.

So um go so again, I'm I mentioned the the onboarding of the CRM.

Another another initiative that we have is develop an economic development strategic plan or to revitalize one that we had.

It's 10 years old, needs to be revisited.

And at this point, we're looking at completely starting over.

So the last one was conducted, I believe was it 2016?

Is the last one when it was published?

2015, 2015.

2015, I believe.

So it was supposed to be re-evaluated, but COVID hit, so we actually had other priorities at that moment, you know, keeping our economy afloat.

So as uh, you know, uh as such, we're we're looking at again looking at the permitting data that we have to be able to draw a conclusion.

So um, or at the very least, we're looking at it to be able to ask questions that we can further explore with a new economic development strategic plan.

So I I've broken I've broken down some of the data available in the internal permitting software uh into two tables and a pie chart.

So the tables break down a number of metrics, including new businesses, relocating or expanding businesses, total square feet, average square foot per new permit, and this is all use and occupancy by the way.

So I'm I'm delineating new businesses through the issuing of new use and occupancy permits, which is mainly how Hope has been able to track in real time the businesses coming into Annapolis.

Um and then the employees, so new FT EMPS, that's new full-time employees and new part-time employees.

And again, this is all what's being reported through the permitting process.

Um and then I'm also doing that by ward.

So you can see I broke that down by ward, so you get an idea of um you know the activity that's happening in in each of those voting districts here within the city.

You know, there's a few a few findings that, and again, this is for illustrative purposes.

There's a few findings that are worth looking into as we create economic profiles for each of these wards in a new economic development strategic plan.

We want to be able to define what successful investment means for each of them.

So, you know, in the case of if, and again, not to call out any war, but just to show just to show interesting trends, ward six has only one business that's been listed, you know, of of getting a use and occupancy permit.

And that was actually the head start program over at Eastport Terrace and Harbor House.

This is three years of data, by the way, or almost three years.

It's going on three years of data.

So it's 2023, 2024, and 2025.

So once we get into February of 26, we've hit our third year of having this system, or at least having entries within the system.

So and again, you can if you look at the makeup of the ward, yes, I'm sorry, council member.

I was just gonna say, I I thank you for the data.

It's interesting.

I'm really glad that Ward 7 has more new businesses than Word 5.

Artful.

Well, it's not it's not a competition, but yes, I guess it is.

Oh, it is.

But we're also very happy that some of the wards businesses stay and they're open and they operate.

So you know, we have a low vacancy rate, so we're thrilled that we can keep our b businesses in business.

It does have but more square feet, but the yeah, I just but the I did notice in Ward 6, zero new business, and as my uh the chair uh you know uh mentioned to me, it's there's simply no commercial space.

There's not, and that's one thing I think over the in the future we'd we'd love to see uh you know work with the the other part of uh planning zoning to identify some properties that we can look to get turned into kind of mixed use, and yeah, that abandoned liquor store that has been there in ward six for goodness since I moved to Annapolis and uh 2012, and feel like with the right changes in regulations, we could get something useful again.

Market, Omega, daycare, I don't know, man.

Just something cool.

Grant, yeah.

We're we're going on a tangent.

I apologize.

It's okay.

That's what this is for, really.

I mean, this is again, there's I'm I've only been here for a month and about two weeks, right?

So we're working on initiatives internally.

But what I wanted to do is this exercise is to also help you in helping us understand what's important for the city council.

So, you know, I say that with a caveat, knowing that there's an election coming up, but at the same time, it's good to get that feedback, um, especially as we work in long-term planning for economic development.

Now, best practices, these economic development strategic plans are renewed every five years or so.

So we're looking at the next five years, and that and it's it's shorter than a comp plan, right?

A shorter lead time than a comp plan because it's meant to be flexible.

It's a strategies only work if you follow them, but with economic development, things change quickly.

Markets change quickly, regulations change.

So we you need to be flexible in how you position yourself, and sometimes industries change, those verticals can change.

So yeah, we'll have to definitely uh chat more.

Um and it as well as with legislation we passed one day, um assuming it holds, uh it has led to uh it will lead to an increase in in density for planned development and planned mixed use and planned residential, but it accompanies it with uh some transit and and the hope, a lot of hopes with with boosting up transit, especially the high value transit, but there's often an economic benefit that comes with a lot of redevelopment potential.

So um, yeah, I think there's I definitely personally I think with with some of my transportation niches, I would love to get that closer tied with some of the economic planning for those corridors.

Absolutely, yeah.

Yeah, and and you know, it's my the way I look at transit is that it you know, especially public public transportation.

Um it should be an option for all, not a necessity for some, right?

It should be looked at as an amenity because it is it's a draw for a lot of people that that either they don't own a car by choice or they don't want to drive.

So it provides that extra layer of uh of convenience, and it it is an economic driver, and the state's put its money towards that with this transit-oriented development model, so yeah, yeah.

Um but which I think we actually need to get on the state's around on the state's list of transit oriented development, whatever they call it, districts probably because we don't have that much transit for them to connect to yet, but right we gotta figure that out in the future.

Well, but I do think Annapolis is unique because it does have I mean it has you know, you do have city transit, but then you also have county transit runs through as well as state with MTA because of the state house.

So there's it just makes sense.

So yeah.

Um so that's that's an example of an interest of an interesting data point right there.

Um, you know, and you in and you've already alluded to, you know, ward uh what was it?

It was in ward six, right?

We talked about ward six.

I'm sorry.

Um so going back into ward eight.

So ward eight, as you can see, I mean, while they they haven't had as robust new business growth, the number of permits for relocating or expanding business is quite high.

So, you know, and then in ward five, the average per square foot per permit is large, or I'm sorry, in ward three is larger than any other ward.

So these individually without looking into them, they don't mean anything, but they're data points that are worth visiting and qualifying, and that's what we're gonna be doing.

So um, and then finally on the pie chart side, um this is a breakdown by type of business.

So I pointed out here that you know the maritime-oriented industries make up roughly five percent of new businesses that get use and occupancy permits.

So I think that's that's interesting, you know, especially knowing that that is strategic industry for the city of Annapolis.

It's something that there's um, you know, there's some momentum behind.

It's just how can we push that further?

And that's something Hope and I have been working on as well.

How can we innovate in that sphere?

So um look out for that in the future as well.

Uh, and then finally, if you look at just um, you know, commercial, right, which has a lot of turnover, you know, uh 41.4% of all use and occupancy permits, general office, right?

Commercial office.

So still makes up the largest uh bulk of what permitting is doing is just getting in terms of you use and occupancy, it's a lot of that's gonna be turnover of uh office space.

So all right.

So I'm gonna ask a couple questions and make a couple points, I suppose, and then I'll pass it off to you, Alderman Savage.

Um, I really appreciate how you broke down the industries and permits that we've had since 2023 and to today, October 2025.

I think this is an absolutely fascinating chart and data point that we have never had handed off to us in a meeting before.

Um, it really gives us a good snapshot of the economic health and growth of the city.

Um the maritime industry going into approximately 5% of the city's uh new economic growth.

Um has that seen goodness, when did we launch the economic development program?

Was that in that was around 2023, correct, Ms.

Stewart?

Which economic development?

The economic gardening or yeah, the first economic gardening program.

I believe the first year we did the pilot was 2020, 2002 to 2023, right?

Yeah, I would say, yeah, 2023 sounds right.

Yeah.

When we it was specifically for the maritime businesses.

Do you have any idea of how that compares to years in the past?

I think a good indicator of was that particularly successful.

Um not that we need to totally abandon it uh if it wasn't, but do we have any idea of how it compared to maritime industry growth before that?

And if you don't know off the top of your head, that's very understandable.

But if you could potentially find that information, I would greatly appreciate it because if we could point to this was maritime industry growth, um, I doubt we were growing a lot during the COVID era, but uh maybe before the COVID era, we were only growing at 3%, but we can point to with economic gardening, we were growing by that.

Well, we can also uh survey the participants as well to find out how their businesses have grown since the economic gardening program and the maritime industry in general.

I guess we can look into that.

And I'd still like to add, um, new businesses are important to track, but it really is important to remember the businesses that we retain.

So maybe if we only had five percent of new maritime businesses, the fact that we can keep our maritime businesses in operation is also important.

And now that I'm that you said that economic gardening wouldn't be relevant to new business growth because that was focused on our existing entrepreneurs and existing businesses.

So uh I don't know.

Yeah, they would be um probably expanding if we were able to get them to grow.

Yeah.

Because the idea was that they would grow beyond stage two.

Correct.

And one thing to know the this is based on the data that we have available to us, right?

We have the data that we have is mainly coming through permitting.

So, or it's data that we would have to pay for.

What's going to change now is that we're we're in a position to create our own proprietary data.

So, you know, thanks to Hope's line item uh on the budget for CRM, which we're onboarding now, we're going to have an interactive database, but we're gonna be able to log that information and we can actually in real time look at that and compare.

We didn't have that before.

So we'll be able to answer those questions more thoroughly, hopefully in the very near future.

Well, because this is our last economic matters meeting of this term.

Um a lot of this is should we return and should I still be on this committee in the next term, which I do hope, maybe not as chair, but uh still on the committee in some capacity.

There are two things that I would ask of you to take a look at and how we can start making it easier for these types of businesses to come in, grow and thrive in Annapolis.

Uh one of them is obviously maritime.

Uh the new workforce development apprenticeship program, very big.

Uh I would love to relaunch economic gardening um in some capacity.

Uh because I do think that was a very good program.

And we will hopefully, as we continue these apprenticeship programs, be able to get more stage two companies into the city.

And whether or not we just keep a little bit of money in the program, and if someone takes us up on the offer, great.

And if someone doesn't, well, we just save that from the next year.

So be it.

But I would love to at least always have that on the back burner.

But the other is daycare centers.

Um we recently passed legislation streamlining and simplifying and cut a lot of the red tape uh to open and operate those in Annapolis.

I believe the More Child Care Center, the More Daycares Act was the only zoning text change in Annapolis to pass unanimously ever.

Um but there's still a lot to do um to make it easier.

I don't know how much we can control at the city level, but any input or recommendations that you could offer would be greatly appreciated.

And if you could talk to our daycare operators, both uh daycare group and daycare family, uh would be appreciated because we need to make it easier for our working families to get child care.

It's very difficult with daycares because the the market itself has sort of been disrupted to a degree, cost scale directly with usage.

So you know, Maryland regulation requires one provider for every two children under the age of two and a half.

So as as daycares start to take one, yeah.

Three.

It's three it's three, yes.

Okay.

I got very into staffing ratios, drafting.

Oh, I see.

Okay.

Well, very where I don't know if it might have been different two and a half years ago when we were looking into this before, but regardless, cost scale with usage.

So that in itself breaks the market.

So the solutions need to come from the public sector, whether it's state, whether it's local, whether it's county.

Um, so that's something that we absolutely can look into because those that are having the hardest time with daycare, it's not not the lowest income, or it's not the highest income, it's right in the middle.

Because you have programs like Head Start.

I mentioned Head Start earlier, right?

Um, and you have if you're if you're in the higher income spectrum, then you have the ability to have either at home or pay for you know, pay for a daycare that's more expensive.

So daycare is incredibly expensive for a number of reasons.

So we'll look into that absolutely.

Thank you.

Alderman Savage.

Uh just uh um yeah, so just a recommendation.

Uh if Ms.

Stewart hasn't given this to you already, I would suggest taking a look at the um maritime task force, all the from what is it, three, four years ago?

A lot of the task industry.

Yes, and then there was the recent um small maritime work group that had some recommendations as well.

So first one might deep dive into the industry and the history good for you to see.

Yeah, it's the other thing.

Have you sent in the Urban Three?

Oh, goodness, he has not seen that, but we can make sure you see that.

Which one was that?

I'm sorry.

This is um, so we broke down, we conducted a study about a year and a half ago, uh, that is officially titled the land value and infrastructure study.

Uh, but it is sometimes referred to as the urban three study after the company that conducted it, uh, where we broke down which areas of the city based upon property tax revenue versus infrastructure and services spending are revenue positive and or revenue negative.

And uh it all comes down to land use and regulations.

Uh so general rule of thumb is uh big box stores lose the city money and cute charming downtowns and local businesses get the city money.

So uh we'll show it to you uh after the meeting and guide it to your attention.

Uh someone who has a background in development and along with economic development, I think you'd find it fascinating.

That'd be great.

Yeah if you got a good two and a half hours to kill.

Yeah.

No, that'd be great.

I'd I'd love to take a look at that.

Yeah.

Thank you.

Okay.

The last thing is just um uh you know, something that's been on my radar, and well, largely because of the chair here, but um it's just as you may have detected earlier, is an effort to really pedestrianize more of our streets.

And one of the challenges we found is the businesses, especially in the United States, we're not really used to that idea.

And um, you know, we're so one thing I I guess I would ask is think about if that's as you get adjusted here, if that's something that can be handled in your office, or if that's something that we need to look at uh outside company to come in to help do some of the especially as we start to implement some of our uh you know transitions into pedestrianization.

Um there will they might be some coming up with a new administration that we have in the pipeline, but just to plant that feed in your head.

Yeah, I would say um we can discuss that later, whether it's right for us or an outside company.

I know that my office has had quite some experience with these businesses and their reluctance to do that.

So our approach we should definitely discuss.

Okay.

Well, I I can say I've been a member, you've mentioned this earlier, the terminology, a member of the Congress for New Urbanism for three years now, since 2022, when I took their tenants in mind in designing a public-private partnership, neighborhood of affordable housing, market rate housing.

So uh offering further options for how people traverse this the urban environment, it's intrinsically linked to economic development, it's intrinsically linked to well-being, and it's linked to financial mobility as well.

So it's definitely something that we can continue discussing and and see what role our office might be able to play in that.

Yeah.

That's all I have is there.

All right, thank you.

Well, that is all the questions we have.

Um thank you so much for joining us, and it was wonderful to finally get a chance to connect.

And uh no worries.

We understand that sometimes things slip through the clack, uh, slip through the cracks for uh getting opportunity for missing the last meeting, but looking forward to building a long fruitful relationship.

And um, Ms.

Stewart, this being our last meeting of this term, thank you for all the work and support you have given this committee.

Um I think we've done some incredibly innovative things together, and none of that could have been possible without you.

So thank you for the support.

Oh, Awren Savage.

Uh, before I ask if there's anything else for the good of the order, um, it has been wonderful working with you here in this committee.

Um, wish Alderman Gay could have joined us, but um, it has been wonderful working with him.

I think we turned to this committee from something that just sort of occasionally met into something that really looked for innovative solutions to our city's economic development needs.

And while we often joked about the efficiency of the meetings and just breezing through stuff, we always see when we have things to actually dive into.

We ask good questions and got into the details.

And there are things that didn't need a three-hour meeting.

We, you know, didn't get away to a three-hour meeting.

And uh it's been great working with everybody here.

And thank you for having the faith in me to be the chair of this committee.

Anything else in the good of the order, sir?

Yeah, you know, you beat me to the punch.

I just want to say the same.

I think uh thank you for your your leadership on this committee.

Uh you have brought an incredible amount of innovative ideas, um new to me, and we've we we brought them to fruition.

Um, and uh yeah, I just want to get I've learned a lot.

So thank you for um again, thank you for bringing that vision to the committee.

Look forward to working again.

Hopefully.

Um, one last thing for the good of the order.

Uh Ms.

Jackson, Ms.

Reuter, Ms.

Bucklin, you guys stay late for this meeting because we all have day jobs and we can't meet at three o'clock in the afternoon, unlike some other committee member or uh council members.

So thank you guys for staying late for us.

And uh yeah, with that said, motion to adjourn.

So moved.

Second, all in favor.

Aye.

Us and even if he did not know us, he fought for the hope of us.

That one day that he knew that he would have the opportunity to look down and smile.

And know that he paved a beautiful pathway for all of us.

A place where we know that in any space that we are in, we are there because that space was already paid for a space that every single place we are in, that we know we are there because we belong, that every single room that we walk into, we are not there because of someone's benevolence.

We are not there because of someone's kindness.

We are not there because of someone's social experiments.

We are not there because someone wanted to sprinkle diversity into the room.

We are there because that room will be incomplete until we showed up, and that room is now finally complete because of the work that happened before we even got there.

And if there's one thing that we know is that, yes, we talk about how he was a first, and and being a first is fine, and that's great.

But let's be clear that's not the assignment.

Being the first is never the assignment.

Doing something while you're there is.