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Frederick County gets popular, pricey

Greg Barrett
Baltimore Sun

(3/3) The way people are flocking here and property prices are shooting up, it seems as if there must be gold buried in the gentle slopes of Maryland's most spacious county.

But the prospect of a glittering future is best reflected in the vast expansion planned for Fort Detrick, the county's largest employer and future home to the largest biodefense research center in the country.

Once a quiet dairying center with a rich Civil War heritage, Frederick is now a focal point in the war on terror, a conflict with no definable end. Three new high-security biodefense labs promise to bring thousands of professionals to Fort Detrick's new $1.2 billion National Interagency Biodefense Campus. The labs will phase in about 2,000 jobs during the next 10 to 15 years, said base spokesman Christian Devine.

"I think that's huge," Frederick County Commissioner Michael L. Cady said of Fort Detrick's increasing influence on the area's land prices and ability to attract additional biotech industry. "It's a huge magnet like the North Pole."

Smaller expansions planned for Frederick's MedImmune Inc. and British-owned BP Solar manufacturing are expected to bring 300 or more scientists and engineers to the county, said John Lynn Shanton, president of Maryland's Strategic Marketing Group, which tracks growth in Frederick and nine surrounding counties.

But that's just the beginning, Shanton predicts. He considers the estimates of 2,300 high-paying lab jobs "a conservative number" because Fort Detrick's role in the war on terror will continue to grow. Biotechnology companies, he said, will migrate to the federal contracts tied to research at the new biodefense campus, a 200-acre project scheduled for a 2013 completion.

"The research [and researchers] will just keep coming," Shanton said.

Frederick County was on a growth trajectory even before the 9/11 terror attacks on New York and Washington sent homeland security funds coursing into the country. Between 2000 and 2005, the population swelled by 26,580, to an estimated 221,850 residents -- an annual growth rate of 2.58 percent, more than double the state's 1.15 percent, according to the Maryland Department of Planning. By 2030, the county's population is projected to be 339,700.

Past affordable

In simpler times, Frederick County, the state's largest at 663 square miles, was seen as an affordable option for the working class and the most durable of the Baltimore-Washington area commuters. Its 160 dairy farms and 45-mile distance from the area's well-heeled metropolises tended to insulate it from the steep pricing of city real estate.

That is no longer the case.

Recently, a Virginia developer offered $65 million to Frederick County just for permission to build thousands of upscale homes. And Frederick City townhouses are selling for $749,900. Then there is Lori DuBell's definition of a "bargain" home.

The four-bedroom Frederick house bought "as-is" by DuBell, a real estate agent, in the fall for $430,000 sold new in 1999 for $203,000. Bargains are relative, she said. During the past six months, similar homes in her North Crossings neighborhood sold for $489,900 to $547,500.

There are several other factors driving the land rush to Frederick, including the expansion of Washington's suburbs along the Interstate 270 corridor and the resulting squeeze of supply and demand. But the war on terror is an especially dynamic engine.

Last week, Maryland's Democratic Sen. Barbara A. Mikulski announced that Fort Detrick would receive $35 million from the 2006 military construction and defense spending bills. Devine, the base spokesman, said it would likely go toward construction and research, but it's too early to project how many jobs the money would generate.

"What's happening at Detrick is exciting," said Shanton, a retired Navy captain and board member for the Fort Detrick Alliance, a four-year-old, not-for-profit booster group. "We're talking about lots of high-level employees, mostly Ph.D.'s with big salaries" recruited from across the nation.

Biotechnology and its roster of scientists have played a significant role in Frederick ever since the Army moved several of its Washington biodefense units to Fort Detrick in 1978, said Norman M. Covert, a Frederick resident since 1977 and the base's former chief of public affairs.

"That [move] was the impetus that got Frederick to where it is now -- the biotech corridor," said Covert, the author of Cutting Edge, a history of Fort Detrick. With the base's expansions came "stability and affluence for everybody ... and [it made] the housing industry boom."

There is no downside to the growth, Covert argued: "With success everything seems to grow exponential."

But others worry that the county will become out of reach for the working class.

One is Cady, a 63-year-old Republican whose three-bedroom home in Frederick cost $87,000 in 1988 and is assessed at $240,000 today. A smaller house behind his sold for $340,000 in September. "If I were moving," he said, "I would not be able to afford my house today."

A 37-page Workforce Housing Needs Study completed this fall for Frederick County warns of a "jarring change in character" for the county created by "new residents largely coming from upper income brackets."

If changes are not made, many of the children of current residents "will not be able to buy a home or rent an apartment in their home county," the report warns. In effect, it concludes, Frederick's hot housing market threatens to exclude newcomers from professions such as retail, teaching, firefighting, nursing and law enforcement.

A case in point is the 173-acre technology park approved by the county last year. It is expected eventually to accommodate 7,000 mixed-income jobs for business offices, retail, restaurants, and a hotel and conference center.

Cady is not worried about filling the jobs, but he admits that the employees might have to come from outside Frederick as it grows increasingly expensive.

"I think most people are still finding ways to hang on and survive today in Frederick, but it's becoming more and more difficult," said Michael Spurrier, director of the Frederick Community Action Agency. The work force housing report projects that owner-occupied housing that's affordable for the county's median household income will drop within three years to 9,826 homes, or 14 percent of the market, down from 22,555, or 42 percent, in 2000.

In the past six months, DuBell has helped relocate three local families -- consisting of a postal worker, retailer, nurse, nursing student and a computer analyst -- 60 miles northwest to Chambersburg, Pa.

"They could get lot more home for their dollar up there," she said. "I've got story after story like that."

Cady says he supports growth that's balanced with improvements to critical infrastructure such as schools, roads, water and sewage. He called this year's $65 million offer of incentives to the county from Virginia developer Land Stewards LLC a "win-win" because the money would be in addition to millions of dollars of other fees paid by the developer.

The flat payment is to allow the mega-developer from McLean, also known as Elm Street Developers, to exceed the county's caps on construction -- laws intended to keep public infrastructure on pace with home building.

Land Stewards' offer is unprecedented in its amount for Frederick. Two years ago, builders weren't making any offers at all. "Developers are making better partners in the state right now," Cady said.

Land Stewards would apply the payment toward building or expanding four public schools in the desirable Lake Linganore area, just east of Frederick city. During the next 15 years, it wants to build 4,000 homes, townhouses and apartments in Lake Linganore priced from $200,000 to $700,000, or whatever the market and final costs dictate when construction is completed, said Land Stewards manager John M. Clarke.

Clarke expects to pay an additional $20 million to $25 million to extend county roads, water and sewer service to the development, the county's largest ever, and about $40 million in tap fees to hook up to the county's water and sewer lines. All the costs -- including the school construction -- would ideally be recovered in home sales, he said.

"The notion that [developers] are becoming better partners is misleading. The bottom line is still their bottom line," said Kai Hagen, a Democratic candidate in this year's County Commission elections and executive director of the nonprofit watchdog, Frederick Regional Action Network. "Land Stewards is making an economic calculation based on the parameters set by the county, and the market. This is high-end housing."

Like Montgomery?

By some accounts, including those of opponents and proponents of the growth, the expensive real estate only stands to make Frederick County more like Montgomery County: an attractive, sophisticated place to live or one that's cost-prohibitive, depending on the perspective.

"The real question is [about] what sort of homes and communities we're building, not just whether or not a developer covers the costs of some of the impacts their development has on the broader community," Hagen said.

Cady considers the comparison to Montgomery County badly flawed for several reasons, including Frederick's relatively low population density, but the county is already incorporating a model of Montgomery's affordable housing program. The Moderately Priced Dwelling Unit program, created by Montgomery in the 1970s, requires developers to build a set percentage of lower-priced homes in larger developments. These are reserved for residents with incomes that fall below the median, but above what's required to meet eligibility for public housing.

In Land Stewards' case, this could result in at least 500 MPDU homes, or 12.5 percent of its new development in Lake Linganore.

The first MPDU homes in Frederick County will be ready next year, available to county residents on a sliding scale of incomes, said Margie Lance, the county's program coordinator.

To qualify, individuals can earn no more than $43,750 and a family household of five can earn no more than $67,480. But only eight homes -- townhouses projected to cost $170,000 to $190,000 -- will be available initially, and winners will be drawn from a lottery. Within five years, the county expects 700 MPDUs.

"The MPDU program is a good thing, but it's only a small part of the overall solution," Hagen said. "The program is no silver bullet. There is a combination of things that need to be done."

Other affordable housing options being discussed by county officials include bond programs to help home buyers with down payments; a conversion of the flat impact fee to an excise tax to lessen the burden on lower-priced home construction; and additional zoning and tax subsidies to encourage nonprofit developers.

Meanwhile, in a once-depressed area of South Market Street in downtown Frederick, 14 luxury townhouses and condos priced from $495,000 to $749,900 are scheduled for completion this year. Eight of the units sold before construction began this month.

"I'm told that no other [Frederick] project has ever pre-sold like this before it even broke ground," said Rob Whalen, the project's real estate agent. "The response is phenomenal."