Two prominent developers leveled pointed criticism at Maryland government and the state Department of Business and Economic Development for what they said was an almost a willful avoidance of businesses in the state.
Jon M. Peterson, principal with Peterson Companies, was one of two developers to tell the Maryland Economic Development and Business Climate Commission on Wednesday that state officials failed to pay attention to them.
“National Harbor is a pretty successful project on a state-wide basis,” said Peterson, whose company built the Prince George’s County project that will be the site of the new $900 million MGM Resorts casino. “I don’t know one person from the state economic development office. I know that there are programs out there that exist for workforce, for job creation, a lot of programs. I couldn’t tell you what they are. I don’t know whether that is my responsibility to seek them out or whether it’s the state’s to come and let us know what is available.”
The criticism drew swift response from DBED, which quickly listed several visits made to Peterson’s National Harbor project and released a state photo documenting one such visit.
Peterson was part of a panel of developers along with Robert E. Buchanan, a Montgomery County resident and principal of Buchanan Partners. Both men told the commission that Maryland has a long way to go when it comes to being welcoming toward business.
“The attitude is so different,” Buchanan said. “The corporate culture is so different toward business in Maryland from Virginia. In Virginia, I was welcome.”
Buchanan told the commission about an unannounced visit from a Virginia official who brought a Swedish businessman to one of his projects and bragged about the importance of the development.
“I don’t think any official in Maryland has visited any one of my projects,” Buchanan told the commission.
Both men also told the commission that part of the difficulty of doing business involves the regulatory environment and the ability of an agency to shut down construction based on an on-site interpretation of regulations. Lawsuits are also a problem.
“All someone needs to do to have standing [to sue] in Maryland is to stand up, and the process comes to a screeching halt,” Peterson said. The ease of filing such suits has given rise to “professional activists” who work to derail projects, he said.
State economic development officials quickly responded with an emailed list of four occasions where DBED officials met with Milt Peterson, principal and chairman of Peterson Companies. (The list was not intended to be comprehensive, the email noted.) Accompanying the email was a May 2011 photo of then-DBED Secretary Christian Johansson attending the announcement of the Tanger Outlets development.
“Clearly we have a relationship with the company and have worked with them on projects,” said Karen Glenn Hood, a spokeswoman for the department.
Hood said the agency did not want to be “looked at as this agency not reaching out to this developer and this very large, important development.”
Ursula S. Powidzki, assistant secretary for business and enterprise development, was in the room at the Queenstown conference when the comments were made and said they were confusing because it was clear they were directed at the agency “but I didn’t know what he was talking about.”
“I was taken aback …,” Powidzki said, adding that the officials from the department met with Milt Peterson during the International Conference of Shopping Centers convention in Las Vegas earlier this year.
The commission is expected to deliver recommendations on improving the business climate in the state to House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr. before the 2015 legislative session begins. Up for discussion is the possibility of overhauling the state economic development agency and perhaps even privatizing some or all of its functions.
This is the second time since the commission began meeting earlier this year that DBED has been the focus of direct criticism from business leaders.
In May, Wade Watson, vice president of group truck operations for Volvo Group Hagerstown, told the commission that “Volvo is here not by choice but by legacy.”
He, too, criticized state regulations and said the state and DBED seemed not to care whether the company remained in Maryland.
“No one is banging on the door saying, ‘Volvo, we don’t want you to leave,’” Watson said. “When we see that activity to get a new restaurant or small business and we’re bleeding, it’s frustrating to try and figure out how do we get people to pay attention to us.”
Maryland has more than 70 economic development incentive programs, second only to Oklahoma. About one-third of those programs are administered directly by the department, which is charged with providing financial assistance to attract businesses to the state and to help retain and expand businesses.
“We as an organization do not incentivize real estate development,” Powidzki said. “We don’t get involved in land use or zoning or provide financing.”
Powidzki said the agency partners with brokers to help find businesses space, what she called “the end user.”
Even then, the agency doesn’t get involved in every situation.
“We are not willy-nilly about giving incentives to companies leasing 10,000 square-feet of space,” Powidzki said. “There are some rules of the road. It has to have some strategic importance.”
In the end, Powidzki said many of the complaints about the business climate leveled by Peterson and Buchanan focused on regulatory and land issues.
“We are not involved in that,” Powidzki said. “We are not a land use agency. We are not a permitting agency.”