Interim Meeting #2
CUMBERLAND
ECONOMIC
DEVELOPMENT
STRATEGY
August 5, 2014
Presented By:
Kyle Talente, Vice President and Principal
Lauren Callaghan, Market Analyst/Planner
RKG Associates, Inc.
Work Completed To Date
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Kickoff meeting and first round of stakeholder interviews
Review of background materials
Demographic conditions and trends
Economic conditions and trends
Preliminary quality of life metrics
Preliminary strengths, challenges, issues and opportunities
Preliminary project goals
Interim Meeting #1
Real Estate Market Analysis
Target Industry Analysis
2
Goals
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To create jobs that pay above median income for Allegany County
To add wealth that grows the middle class
To create new image for Cumberland that can be marketed
To encourage entrepreneurship and small business development
To define a tangible, multi-year plan that can garner support
To identify a strategic approach to addressing blight and redevelopment
To reverse negative attitude in community
To educate decision makers and community stakeholders on the purpose and
value of economic development
To create a business case for moving past the “the way it was” mentality
Continued development and growth of the Arts and Tourism
3
Real Estate Market Analysis
Development Profile/Trends
Non-Residential Land Area
Cumberland, Maryland
Mixed Use, 0.4%
Manufacturing, 3.0%
Commercial/Office
Condo, 0.6%
Warehouse, 10.5%
Office, 15.3%
Retail/Service,
56.5%
Automotive, 6.1%
Restaurant/Lodging,
7.5%
Total Acres:
Acres: 489.1
491.4 5
Total
Non-Residential Building Square Footage
Cumberland, Maryland
Mixed Use, 1.9%
Warehouse, 17.1%
Manufacturing, 6.0%
Office, 24.1%
Retail/Service,
36.2%
Restaurant/Lodging,
7.6%
Automotive, 6.3%
Commercial/Office
Condo, 0.8%
Total SF: 4,900,3756
Non-Residential Assessed Value
Cumberland, Maryland
Mixed Use, 1.8%
Manufacturing, 2.4%
Warehouse, 7.0%
Commercial/Office
Condo, 1.4%
Retail/Service,
35.0%
Office, 36.0%
Restaurant/Lodging,
11.3%
Automotive, 5.1%
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Total Value: $211,893,075
Non-Residential Vacant Land Area
Cumberland, Maryland
Industrial, 2.5%
Commercial < 1
Acre, 11.2%
Commercial 1 - 10
Acres, 20.8%
Commercial 10 - 65
Acres, 65.5%
Total Acres: 254.4
8
Development Trends
 Majority of development occurred prior to 2005
 689 of 703 properties
 14 non-residential properties developed since 2005
 Properties scattered throughout Cumberland – no concentrations of
development
 Most properties are Retail/Service or Office
 Majority are along one of the Allegany County Trails System and welltraveled roads
 Notable Non-Residential Development:
 Western Maryland Health Systems Hospital (2009)
 Fairfield Inn & Suites (2009)
 CareFirst Blue Cross Blue Shield (2011)
 Pattern suggests development is seeking available properties
9
Implications
 Retail development steadily been developed outside of Downtown
 Land available for development
 Proximity/access to well traveled roads
 Close to I-68
 Limited available land for green-field development
 Places emphasis on infill and redevelopment
 Economics More challenging
 Focus needs to be flexibility (form based code?)
 Recent development has been institutional or corporate
 Market conditions risky for smaller developers to invest
 Over speculation in building investment stalled market
 Challenge until market conditions return to pre-downturn levels
 Strategic investment paramount
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Real Estate Market Analysis
Non-Residential Assets
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Cumberland Job Inflow/Outflow, 2011
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Available Properties - Lease Rates/Square Foot
Cumberland, MD
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Allegany County Job Inflow/Outflow, 2011
6
5
4
3
2
1
0
$0 - $5
$5-$10
Retail/Service
Office
$10-$15
Mixed Use
$15+
Warehouse
14
15
16
Available Properties - Sales Price/Square Foot
Cumberland, MD
30
25
20
15
10
5
0
$0 - $25
$25-$50
Retail/Service
$50-$75
Office
Mixed Use
$75-$100
Warehouse
$100-$120
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Non-Residential Broker Interviews
 What we have heard thus far:
 The non-residential market has seen little activity since the 2008 Recession.
 There is no single type of non-residential property that is strong in the
Cumberland market.
 Recent inquiries about properties Downtown and near the GAP Trail indicate
an increase in interest in Cumberland by visitors/potential investors.
 Regional/National chains are willing to invest near Cumberland, but only if
market criteria is met.
 Adding demand for goods and services generated by tourists to local
demand may increase Cumberland’s attractiveness for some retailers and
service providers.
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Implications
 Cumberland’s non-residential market has not recovered yet
 Properties are available for lease and sale but current supply is
exceeding demand (particularly for retail/service property)
 Much of this supply is concentrated within the Central Business District and
along Virginia Avenue in South Cumberland
 If buyers/investors become more seriously interested in
Cumberland, there is a supply of available properties that are
well-located within the Central Business District and along major
thoroughfares.
 A better understanding of the Cumberland market and what type
of retail and services it can support is needed.
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Target Industry Analysis
Target Industry Methodology
Is it a local specialization?
Is it adding jobs locally?
Is it gaining a competitive share
relative to the nation?
Does it capitalize on Cumberland’s
strengths?
Is it consistent with the goals of the
community?
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Target Industry Methodology
Universe of Local Industries
Question 1: Is the industry a
local specialization?
Yes
Question 2: Is the industry
adding jobs locally?
No
Yes
No
Yes
No
Question 3: Is the Industry
gaining competitive share?
Yes
No
Yes
No
Yes
No
Yes
No
Performance Classification [1]
SP
LP
CP
PP
SP
LP
CP
PP
Target Potential [2]
CS
HP R
LP RT
LP RT
ES
PL
PL
PL
[1] Performance Classification Codes: SP = Strong Performer; LP = Lagging Performer; CP = Constrained Performer; PP = Poor Performer
[2] Target Potential Codes: CS = Current Strength; HP RT = Higher Priority Retention Target; LP RT = Lower Priority Retention Target; ES =
Emerging Strength; PL = Prospects Limited
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Statewide Competitive Assets
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Financial Assets & Income
 Income Poverty Rate
(3rd)
 Bankruptcy Rate (9th)
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Businesses & Jobs
Rankings part of 2014
Development Report Card for the
States by the Corporation for
Enterprise Development
 Low Wage Jobs (14th)
 Employers Offering Health Insurance (6th)
 Retirement Plan Participation (5th)
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Housing
 High Cost Mortgage Loans (3rd)
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Healthcare
 Uninsured Rate (12th)
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Education
 Two-Year Degree (8th)
 Four-Year Degree (5th)
 8th Grade Reading Proficiency (6th)
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Statewide Competitive Constraints
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Financial Assets & Income
 Average Credit Card Debt
(45th)
 Borrowers over 90 Days Overdue (42nd)
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Businesses & Jobs
Rankings part of 2014
Development Report Card for the
States by the Corporation for
Enterprise Development
 Small business ownership rate (44th)
 Private Loans to Small Businesses (41st)
 Business Ownership by Race (46th)
 Business Ownership by Gender (43rd)
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Housing
 Foreclosure Rate (43rd)
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Healthcare
 Uninsured Rate by Race (45th)
 Uninsured Rate by Gender (40nd)
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Education
 None
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Site Selection Criteria
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Cumberland Specializations
 Labor costs
(3rd)
 Training programs (23rd)
Rankings part of 2013 Area
Development Corporate Survey by
Area Development Magazine
 Proximity of technical university (22nd)
 Housing costs (3rd)
 Ratings of Public Schools (4th)
 Recreational opportunities (6th)
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Cumberland Strengths
 Highway accessibility (2nd)
 Proximity to Major Markets (15th)
 Railroad Service (25th)
 Healthcare facilities (2nd)
 Climate (7th)
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Site Selection Criteria

Cumberland Weaknesses
 Availability of skilled labor
(1st)
 Highway accessibility (2nd)
Rankings part of 2013 Area
Development Corporate Survey by
Area Development Magazine
 Occupancy or construction costs (4th)
 Corporate tax rate (7th)
 Tax exemptions (11th)
 Availability of land (13th)
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Cumberland Opportunities
 Availability of advanced ICT services (5th)
 Availability of buildings (6th)
 State and local incentives (8th)
 Availability of Long-Term Financing (16th)
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Site Selection Asset:
Higher Education
 Degree programs applicable to local industries/small business
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Accounting
Advanced Manufacturing
Business Administration
Biotechnology
Chemistry
Culinary Arts
Cyber Security/Secure Computing
Economics
Engineering
Information Technology
Mass Communications
Multimedia Technology
Nanotechnology
 Non-credit continuing education courses
 Small Business Center (ACM)
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Site Selection Asset:
Recreation, Culture & Tourism
 Historic points of interest
 Natural recreational resources
 Entertainment destinations
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Target Industry Methodology
Industry Strength (Location Quotient)
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Target Industry Methodology
Industry Strength (Location Quotient)
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Employment Trends
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Employment Trends
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Target Industry Clusters
 Administrative and Support Services
 Data Processing, Hosting and Related Services
 Inbound and Outbound Telemarketing
 Direct Mail Advertising
 Translation and Transcription Services
 Process, Physical Distribution and Logistics Consulting Services
 Financial Transaction Hosting and Processing
 Internet and Virtual Services
 Software Publishing
 Motion Picture and Video Processing
 Telecommunication Support Services
 Internet Publishing
 Cyber Security Services
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Target Industry Clusters
 Healthcare and Social Assistance
 Healthcare
 Specialty Hospitals/Hospital Services
 Outpatient Care Centers
 Offices of Physicians
 Offices of Dentists
 Offices of Other Health Practitioners
 Social Assistance
 Home Health Care Services
 Child Day Care Services
 Community Care Facilities for the Elderly
 Research and Support Facilities
 Medical and Diagnostic Laboratories
 Diagnostic Imaging Centers
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Target Industry Clusters
 Technical, Research, and Consulting Operations
 Professional Services
 Management, Scientific, and Technical Consulting Services
 Architectural, Engineering, and Related Services
 Advertising and Related Services
 Legal Support and Research Services
 Accounting, Tax Preparation, Bookkeeping and Payroll Services
 Technical Research and Modeling
 Computer Systems Design and Related Services
 Scientific Research and Development Services
 Agriculture and Biological Research/Consulting Services
 Other Professional, Scientific, and Technical Services
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Target Industry Clusters
 Entertainment and Recreation
 Complementary Sports/Exercise Venues And Events
 Conducting Scenic and Sightseeing Tours
 Providing Guide Services
 Archeological
 Canoeing/Kayaking
 Cycling
 Hunting./Fishing
 Full Service Restaurants
 Augment Destination Activities and Events
 Night Life/Activity Cluster
 Bed & Breakfasts
 Camping/Non-Permanent Lodging Venues
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Small Professional/Service Firms by MSA
(Under 20 employees)
NAICS
5112
5121
5179
5182
5191
5239
5412
5413
5414
5415
5416
5417
5418
5419
5511
5614
5615
7113
7115
7139
8112
8113
Description
Software Publishers
Motion Picture and Video Industries
Other Telecommunications
Data Processing, Hosting, and Related Services
Other Information Services
Other Financial Investment Activities
Accounting, Tax Preparation, Bookkeeping, and Payroll Services
Architectural, Engineering, and Related Services
Specialized Design Services
Computer Systems Design and Related Services
Management, Scientific, and Technical Consulting Services
Scientific Research and Development Services
Advertising and Related Services
Other Professional, Scientific, and Technical Services
Management of Companies and Enterprises
Business Support Services
Travel Arrangement and Reservation Services
Promoters of Performing Arts, Sports, and Similar Events
Independent Artists, Writers, and Performers
Other Amusement and Recreation Industries
Electronic and Precision Equipment Repair and Maintenance
Commercial and Industrial Machinery and Equipment Repair
TOTALS
Baltimore
48
90
23
116
54
404
1,082
1,020
326
1,805
1,516
188
292
494
314
254
128
48
105
412
120
169
9,008
Philadelphia
118
207
66
267
188
1,333
2,008
1,759
549
2,982
3,112
343
690
1,138
1,521
547
408
94
222
912
231
281
18,976
Pittsburgh
36
75
22
92
136
365
741
733
150
757
922
88
215
452
351
199
116
42
63
490
85
142
6,272
Washington
209
324
93
385
270
937
2,277
2,296
726
8,318
5,797
817
1,252
1,335
1,022
641
484
111
275
757
205
148
28,679
37