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Two new incentive programs help to make way for new office building

February 25, 2012, Herald-Mail | By JULIE E. GREENE

The center of what once was the Martin’s Food Market at Fountainhead Plaza sat empty for more than three years before it was demolished this winter to make way for a new free-standing office building that could open by the end of this year.

The space could have continued in its boarded-up status for another year if it weren’t for two new incentive programs that Washington County approved in recent months, said Asad Ghattas, who owns Fountainhead Plaza north of Hagerstown.

Those incentive programs are for the creation of “pad-ready” sites for commercial and industrial uses and a tax credit for high performance or “green” commercial buildings, said Ghattas, who also is president and owner of Ghattas Enterprises, the real estate development company handling the project.

Even though Ghattas doesn’t yet have a tenant for the future office building, referred to as Fountainhead One, the project still benefits the county, said Timothy R, Troxell, executive director of the Hagerstown-Washington County Economic Development Commission.

The county will benefit from the additional real estate tax revenue on the increased assessed value of the building, and the commission will have a high-quality office building to show to potential clients looking for space in the Tri-State or mid-Atlantic area, Troxell said.

The pad-ready program expedites aspects of the county’s planning and review process, and defers and waives some costs. The high performance tax credit program provides property tax credits for buildings that meet certain “green” standards.

“It’s not a cheap investment, as you can imagine,” Ghattas said. Any incentive helps speeds up the process, he said.

The project at Fountainhead Plaza includes renovating space elsewhere in the shopping center for a fitness center and barbershop that had been using part of the former supermarket space, Ghattas said. Those renovations; the demolition of the supermarket building — there still is some to be razed; the construction of the new office building; and some other improvements at the shopping center will cost an estimated $12 million, Ghattas said.

Pad-ready program

The Washington County Commissioners established the “pad-ready” stimulus program last October.

Originally proposed by the Economic Development Commission to improve the county’s chances of attracting new jobs and investment to the area, Commissioners President Terry Baker suggested last fall that the pad-ready program include sites where a building demolition creates a pad-ready site. That enabled Ghattas to submit the Fountainhead project for the stimulus program.

A site typically is considered pad-ready when the utilities are in place, the grading is completed and final engineering for the building pad is finished so the site is ready for building construction.

“The rationale was, if we want to be competitive, if there’s a client riding along I-81 looking to locate a new facility and looking for a pad-ready site in competing jurisdictions and we don’t have any, we’re probably going to lose out on the project,” Troxell said.

EDC officials hope the pad-ready stimulus program will give developers incentive to get some sites ready for construction, which would make the sites more attractive to buyers or clients, Troxell said.

Approved projects for the pad-ready stimulus program will receive the following considerations:
•Priority review by Washington County’s Development Advisory Committee.
•Deferment of all county review and application fees associated with obtaining site-plan approval until a building permit application is submitted, or the “sunset” date of the program, whichever comes first. It is a three-year program.
•Waiver of all county renewal fees for maintaining validity of the approved site plan.
•Minor changes to the site plan, such as a reduction in the building footprint, can be approved by planning officials at the time of building permit application, rather than having to go before the planning commission.
•A real estate tax credit of four-tenths of 1 percent of construction costs for a three-year period upon completion. (Properties in an enterprise zone are not eligible.)

Truck terminal

Ghattas’ three-story office building is one of two projects that received EDC approval for the pad-ready stimulus program Feb. 1, Troxell said.

The other is a cross-dock truck terminal that 16503 Hunters Green LLC plans at 16503 Hunters Green Parkway, according to the application. That is by the Lenox distribution center in Hunters Green Business Center Phase I, which is along Interstate 70 northwest of the Interstate 81 interchange.

That site already has utilities, but the site needs to be graded and receive the proper approvals for stormwater management and engineering, Troxell said.

Brad Fulton, a representative for the limited liability company, said the company was working through the pad-ready program last year to get a jump on the competition when a potential client approached the company about using the site for a truck terminal.

The pad-ready program helped the company land the deal, and the lease is close to completion, Fulton said. Due to the pad-ready program, company officials were able to tell the interested party that the truck terminal could be completed more quickly, he said.

The goal is to have the truck terminal built on an approximately 12-acre site by the end of the year, but that’s not definite, Fulton said. A cross-dock truck terminal has loading docks on opposite ends so trucks can be unloaded on one end, with other trucks being loaded on the other end.

Fulton said the pad-ready program is a step in the right direction for the county.

"In this climate, any help that a developer can get is certainly needed,” said Fulton, who also is vice president of AC&T.

Fulton said the two companies are separate and this is not an AC&T project.

“Green” incentives

The other program Ghattas expects to apply for is a tax credit for high-performance or “green” commercial buildings.

"Green’ buildings are a thing of the future and really save the environment,” Ghattas said.

Ghattas Enterprises has developed other “green” buildings, such as the Susquehanna Financial Center on Dual Highway, but the new tax credit will make “green” construction more affordable, said Keely Neubauer of Ghattas Enterprises.

Under the high-performance tax credit program, established Feb. 7, property tax credits are available for buildings that receive silver, gold or platinum certification in the national LEED (Leadership in Energy and Environmental Design) ranking system.

The amount of the credit will depend on which level of certification the building receives and the increase in its assessed value after construction.

Silver buildings will be credited 20 percent of the taxes due on that increase; gold buildings, 25 percent; and platinum, 30 percent.

Ghattas Enterprises is aiming for silver certification for the Fountainhead One office building, Neubauer said.

Some of the material from the old supermarket, such as brick and concrete, will be reused in construction of the new office building, said architect Robert Regazzoni of Regazzoni Design Studio in Hagerstown.

The 55,020-square-foot building will have energy-efficient windows, lighting, plumbing and heating, Regazzoni said.

Ghattas said the gym and barbershop could move into their new, renovated spaces near the clock tower by the end of March. Then, the rest of the former supermarket space will be torn down and construction of the new building will begin.

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