Tony Hausner’s Interview with County Executive Marc Erlich: Part 1

Tony Hausner is Founder, Safe Silver Spring and Past Chair AAII Chapter Leaders Executive Committee. He discussed with Montgomery County Executive Marc Elrich about issues facing the County. This is the first of a 2-part transcript of the interview. The interview covered topics of COVID, employee mandate, economy, and future plans of business investment.


Tony Hausner: First, I want to thank Nagender Madvaram, the host of Better MoCo, for inviting me to conduct this interview with County Executive Marc Elrich.

Marc, Thanks for agreeing to speak with me today. We will start off by talking about Covid. Our county has had the highest success rate of any large county in the US. How do you account for that especially given that a majority of the county population are minorities?

Marc Elrich: I think a number of things really contributed to this. First, I think we got a handle on this pretty early after the initial wave when the cases were announced and started spreading like crazy. To some extent the state determined that the more you close things down, the more likely you were to spread the virus. We knew early on, for example, that this was strictly transferred person to person. There was no other vector like mosquito or rodent spreading it around so human beings are the source of transmission. So, the more we isolated people from each other, the more we were able to control it. And that’s what we set out to do. We were able over a long period of time to watch as the governor began changing and opening more stuff up, and in our case, we continued to stay in the low range in cases and the rest of the state started creeping upward so we could actually see a clear, divergent path between what we were doing and what the state was doing so we could see that locally and we could see that nationally as well. So I think residents had a level of confidence that following what we were doing would actually lead to better outcomes. And that’s the other part of this, is having people who took science seriously and even those county residents understand the value of science. Most county residents are willing to listen to advice from people that is science based. And I thought that was an enormous advantage for us. It was like a good confluence of people and leadership and also your ability to pivot some of the things we did.

We had, you know, initially relied on our own Health and Human Services Department to get information and do community work. We pretty quickly discovered that we’re not as effective as we think we are. We continued to see numbers lagging in the minority communities, so we pivoted and put a lot more trust and control to some extent in these hubs that sprung up around the county. And use them because we recognized that they had more authentic connections deeper in the community than the government. So rather than persisting and insisting that we would do everything ourselves, we kind of let go. You know, with the county was good at providing resources, money and things, but there’s no substitution for the authenticity of voices coming out of those communities, particularly communities that don’t always trust being will governed. So I’d say a number of things worked in our favor.

Employee Mandate:

Tony Hausner: You have been criticized from not issuing an employee mandate. Please comment.

Marc Elrich: Most of our employees were vaccinated and the departments where we lagged in vaccination, where the two departments where we could least afford to lose people is fire. Actually, 3 departments, fire, police, and corrections. And the loss of employees there. We’re already talking about for an example of the Police Department, how short staffed we are, and losing even modest numbers of people in the Police Department would have been really problematic for us and our firefighters. We are working with a lot of holdovers now which means that they’re not able to take leave, and they’re supposed to take leave. They’re still doing a lot of overtime, and it’s not the kind of overtime you volunteer for necessarily. So I did not want to take the chance on those two departments we’ve been doing this for a long time. You remember whether vaccinated or not our force was out there, the police were out policing and fire departments were out dealing with fire. The jail was operating and you know we were decently staffed in the jail. But we hadn’t had outbreaks.

You know, we didn’t have firehouses closed because people got COVID. They didn’t have stations suddenly decimated because people have been in the roll call. So whatever people were doing was safe enough to keep it from spreading, and it didn’t put the country at risk. With all the risks we were dealing with, I didn’t see the point of adding additional losses at the end of the day. The Council could have passed it. I didn’t veto any bill. I just said you need to consider the impact on services. Maybe they prefer that. I pretend there would be no impact and they would get covered then of course they would get the blame when there was impact on services. But I just kept saying you have to think about this so they were free to think about it and make the same whatever decision they wanted. And at this point. I don’t actually know why do that because most people are going to get vaccinated and they’ve got new vaccines coming out.

You’re likely to have a once a year vaccine coming this fall. I think we’ve gotten pretty far down that road. And you know the Council members can’t say that it’s endemic. And at the same time insist that this point we push. You know, I wish everybody would get back. I will say the unions worked with us. They called their members who we were very emphatic about. What you should do? And I think we wound up with, you know, at least reasonable rates of vaccination. Even if they weren’t as high as it would have been if they had the mandatory.


Tony Hausner: Let me turn to next topic. In 2021, the County had $28 billion invested in the business community, including 800 million in venture capital funds, which is more than the rest of the state combined. How did you accomplish that?

Marc Elrich: I think it was the good fortune of being a life sciences center. And we got very aggressive about converting life sciences but also making sure they wouldn’t run into the kind of regulatory hurdles that they were used to running into in the county. I mean we did not have a great reputation for the ability to speed projects through the approval process. I can’t fix Park and Planning, but I could fix this stuff on our side of this and there were times when I actually was talking to the leadership of a couple of biotech companies and assuring them they didn’t go to need to go to Frederick to get a building done quickly and we would be able to provide the same kind of service here and we were able to do that. So there have been real changes in how our permitting department operates and it’s much more customer friendly. We load up on a front meeting at the beginning of the process. So that the developers can ask all the questions they have.

Our staff can tell them what kind of things they’re going to be looking for and what concerns they have, which makes it a lot easier for them to present the project. That’s likely to be approved, and if they don’t get initially approved, our folks will work with them to fix it and kind of in the old days. It would be like if you failed. It’s like call us when you’re ready to try again. And that would just upset people, and we wouldn’t expect people until we found something that failed. And then they’d stopped the inspection and then they come back and pick up where they left off. And then when they found something else, they stopped the inspection and we basically said you need to stop that.

We need to give people a punch list of everything we need to have the opportunity to fix everything. So we’ve really made changes in how we handled the developments coming in. And so I think that and the bioscience climate. Here, and the fact that feds invested, we got a large portion of that money that was targeted on vaccines. I think the county got more than you know the rest of the country, so we were in a really good position to take off. And we wanted to be sure that we were able to take off and that’s just been that our work just didn’t extend just to vaccine companies, but to anybody out there who’s doing this cutting edge scientific research.

So, we were very aggressive about making sure we grid that sector. It is when you think about Montgomery County, there is no industrial sector here in Montgomery County and for years our sector was federal government employees. We used to brag about how recession proof we were because we had so many employees in the federal government and there hadn’t been a lot of attention to private sector stuff, and we’ve kind of reversed this and put a lot more attention on what it takes to bring a company here. I’ve approved as many or more incentive packages from life sciences companies as anybody’s ever done. Somebody says I say no to this stuff and they obviously don’t know my record and having paid any attention to the funds they voted for on the Council because they also have to approve all these packages, we’ve been very aggressive about making sure we get the jobs and the science. Growth that we need here and I’ve talked about this stuff later.

Future Plans of Business Investment:

Tony Hausner: What are your future plans as to business investment?

Marc Elrich: There are a couple of things, first of all. We know because the business community has been very clear about this. The transportation system is the number one impediment to economic growth. You know Metro’s got problems, but also Metro doesn’t connect a lot within the county. This isn’t the system where the train stops every 10 blocks, and you know when you get off, you’ve got a five block radius around you where you can go to all kinds of businesses. Our stations are much farther apart than, say, the New York subway, and it basically ferries people from the suburbs to the district, which when you think about it, is what it was designed for when Metro was started. When I was growing up it was something referred to as the white flight line. Is basically took white workers who moved out of the district.

At the end of the 50s and into the 60s, and they moved to the suburbs and the Metro provided the way to get to downtown D.C. It got the workers to their federal jobs and you could argue that that was also kind of a socially unwise policy in terms of the district, but you know, that’s how that metro is designed, but it also meant it wasn’t meant to really serve growth and development of Montgomery County, which is why I pushed on. That would have 100 lane miles that would be cross connected, not just a couple of lines North and South. So you can basically get anywhere from any place in the country to feed jobs. And we were never able to fund it because the County never had the tax revenue to fund it. We flat out had like less money for transportation than Virginia from the developers and we can show you a study by John Lasange that makes the point that Montgomery County is basically the cheapest state in the region when it comes to development taxes. What that’s meant is while Virginia builds the silver line and all the counties there are building bus rapid transit. And I mean real bus rapid transit. Not like mixed use which is what we have on 29 so far and they built real BRT (Bus Rapid Transit) projects. They did it because they added a tax base that came off commercial property that allowed them to do that. Montgomery County has never been willing to do that. The mantra has always been well if we spend anywhere money the state will never give us any money. So how many years are we into this with the state never giving us any money.

We need to do what Virginia did, which is getting the state legislature to give us taxing authority in a better way than we tax. So you know, I want to deal with the transportation. I want to deal with the tax issue. We are cheaper than Virginia by far. The quickest example is Tysons Corner which is $1.65 on commercial property, downtown D.C. is $1.85 and we are $0.99. Further, in Virginia, for sales tax they get 7/10 of 1 penny for transportation. The counties there like Fairfax get 12 and a half cents not only on commercial property but all commercial property goes towards transportation. Montgomery county has nothing like that, so we lag behind. Regionally it is not because we have a poor location but because of our tax policies. We have better tax policies if you only measure them by the dollar, but we don’t produce value.

We lose to the developers, to the dollars that they pay and so we lose to Virginia which builds stuff and we don’t and I’m intent on rectifying that. I think we can get that done with another Council that’s not so political, and we’ll actually have four years to cool their heels and to think about how do we get that? Because I put a lot of thought into this and I’m perfectly willing to change what we do and mimic some of the things Virginia does because it actually works best. And I tell people that if somebody’s eating your lunch, you ought to look at how they got your lunch. And that’s something that Montgomery County has never done. We have looked at it and we understand real clearly what our advantages are and what our disadvantages are. And the irony is that changing the tax system would leave Montgomery County, which as much or more money, but it would allow us to float bonds which we can’t do under the current tax structure. So, we would be able to get a lot farther a lot faster.

The other thing is it focuses on White Flint and WMATA and the life sciences When we didn’t get Amazon, which is not the end of the earth, I looked at that and you know, you wonder why you didn’t get it because we knew we found out we had outbid Virginia for Amazon. We put more money on the table then probably anybody else did. We were certainly in the top one or two, and we put more money on the table than Virginia. They understood that our state did not understand here is that Amazon wanted talent. What Virginia offered Amazon was having George Mason and the University of Virginia close to the Amazon campus. They provided a steady stream of talent from their programs that could fuel Amazon’s growth. And that excited him. Also they were able to move into a built part of the city where, you know they were offering them a lot and we could offer them only the Lerner properties which consisted of 45 acres of dirt, Lord and Taylor and a lot of low rise development. Not much of an urban area and Virginia offered them an urban area with lots of amenities such as restaurants and all those things. So we weren’t competitive on that.

So, I started a conversation with WMATA over two years ago and the focus was to get them to take their kind of flagship property in White Flint and solicit a master developer to develop it as a life sciences hub. I began to talk with the private sector about what they wanted to do. So on the private side was every developer on the West side of the pike (Rockville Pike) going forward with life sciences projects. I think they took me seriously that they we would actually do something here. I get why they were skeptical and WMATA hired Jones Lang and Wesal to do an analysis for them as to the highest use of the property. And so they came back and said the best use is life sciences. So it made WMATA comfortable with going in that direction and so we expect a solicitation for a master developer for a life sciences hub and that puts it right on top of the Metro.

This is really critical when you think about life sciences around the country. San Francisco is hot and it’s an urban area, San Diego’s hot and it’s an urban area. In Boston, Kendall Square is an urban area and it is one of the hottest properties in the United States. Our life sciences are primarily in office parks at Shady Grove. And they serve a purpose. But we’ve got an opportunity to build the center, and we are hoping to achieve in White Flint, which is the greatest confluence of companies close to each other and what will also be built out as an urban setting with all the attractions of an urban setting so the companies won’t just look at the square footage and will also look at the value of the whole proposition. Where employees eat lunch and get dinner and they just hang around to shop and they have to drive out because this is a dead zone when it closes. All those things we can address inside a new plan.

I’m sure the developers around there are going to follow that plan because life sciences is valuable to all of them. It’s going to be the major growth industry in the county. And to build on that, I also started going to the University of Maryland and I pitched them on investing in life sciences in Montgomery County. And Montgomery County has never really had a true university presence. Here they participate at the Universities of Shady Grove. The Universities at Shady Grove is not a graduate level research unit. And we’re the only major life sciences area in the country that’s not focused by a life sciences grad program at the university level. Everybody else, all the other folks have it in the country, So we’ve risen in an enormous way without having what some people consider a key component. And so I started asking the University to play a role here.

I made the point that in Virginia they used their university system as an economic driver. They’re very conscious of that. When Amazon said we want talent, they just jumped to it and they put, you know, 10s or hundreds of millions of dollars into things that would provide Amazon with talent. And we’ve never done that. We’ve never used the university that way, and the university hasn’t seen itself that way. So after a lot of conversations, you know we actually signed a joint MOU with the university president, Doctor Perman, the Chancellor and the whole system to bring graduate level research here. Not too long after that I had a meeting with the new Director of NIST (National Institute of Standards). We were talking about where Montgomery County could go with this. You don’t need life sciences research. You could go with quantum or AI and the answer was quantum was not ready for prime time yet, but the AI is out there and people are using it.

We got approached by the Dean of the School of Maryland that does artificial intelligence. And he was we would like to be there. And so we started conversations with the university and where we left it at the end of the legislative session is they want to put a facility in the County that focuses on artificial intelligence, and big data. Further that it focuses on aiding the life sciences, basically trying to train a new generation of scientists on how to use big data and artificial intelligence. It would also serve the hospitality industry, because they’ve been approached at the University of Maryland by Marriott and Choice Hotels to help them with AI because they like AI so they can envision their environments before they build the environments. So those are two big things we think will become centers of are future. The other piece which is growing for artificial intelligence companies is because big data. This has implications for everything we do and how we process all the information. And it’s going to give a jump to technology and not just life sciences but technology in general, because people can speed up the research they can perform. They would find out more about things than they would ever find, like I did. So when I am up at 2 am googling things so it’s like imagining that you had all the computing power that you could possibly assemble via Google and sorting.

We could never match that as human beings but by using machines we can do it and the machines can do it a lot faster. So I see us kind of helping to drive 3 industries here. But I think at the end of the day, the big thing is the Montgomery County is always considered kind of sleepy and not aggressive about business attraction. I think that we can make a bold statement on where we’re going with life sciences. And what we want to do, and for that to get an artificial intelligence, and get artificial intelligence into the county, we’ll send the signal that this county is actually serious about this. And that’s my goal is, I can deal with our regulatory processes. I can fix the tax processes, but the big thing left to fix is the impression that we’re not serious about doing something. When people start seeing the buildings going up and the solicitations going out, they’re going to get a different view on this.

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