city of frostburg, maryland request for proposals (rfp
TRANSCRIPT
CITY OF FROSTBURG, MARYLAND
REQUEST FOR PROPOSALS (RFP):
PURCHASE AND DEVELOPMENT OF A MIXED-USE PROJECT ON CENTER STREET, FROSTBURG, MARYLAND
October 2021
October 25, 2021
REQUEST FOR PROPOSALS (RFP):
PURCHASE AND DEVELOPMENT OF A MIXED-USE PROJECT ON CENTER STREET, FROSTBURG, MARYLAND
OVERVIEW: The City of Frostburg is soliciting proposals from developers (or multi-firm project teams) interested in the purchase of 8 vacant parcels of land, comprising one City block and developing the block as a mixed-use property. The residential component should be purposefully designed for professional housing and the first-floor space planned for commercial or office space that uniquely complements the college setting. The project goals are to enhance the appearance of the gateway into the community from Interstate 68 to Frostburg State University, meet a well-documented housing need that exists in Allegany County for professionals at Frostburg State University and regional employers, and stimulate the local economy by offering additional commercial opportunities within the City. The City seeks to identify a private development partner (or partners) to enter into an Agreement to purchase the properties and then design, construct, operate, and maintain a mixed-use development.
Although the City will consider alternative proposals and facility configurations from interested bidders, the primary goal is the construction of 2 to 4 story mixed-use structure with professional housing in the upper stories and commercial space on the ground floor.
1. SITE DESCRIPTION:
The City-owned property, collectively is approximately 1 acre, and includes the City block bounded by Center Street, Alley 33, Oak Street, and American Avenue. The property is situated across Center Street from the campus of Frostburg State University. The City acquired 8 residential structures, all which were student rentals, and razed the properties in 2020. The total project cost was $1,435,757 and was funded by the Maryland Department of Housing and Community Development, the Allegany County Community Enhancement Program, and the City of Frostburg. The property is subject to the City’s Zoning Ordinance and is zoned "C1" University Corridor/Mixed-Use District. The property is also afforded some development standard flexibility as the property is situated within the "ID" Infill Development Overlay District. Near the project site, at the intersection of Park Avenue, Alley 33, Bowery Street, Braddock Road, and Center Street, the Frostburg Gateway Enhancement Project is in the design phase to construct a 4-leg roundabout. In addition, the roundabout is being designed to accommodate
two-way traffic flow on Center Street between the roundabout and College Avenue. This is an estimated $4M and is being designed to improve the traffic flow, functionality, and aesthetics at the intersection that serves as the “Gateway” to downtown Frostburg, including the project area. Additionally, the City is pursuing the possible construction of a “Transit Hub” in partnership with Frostburg State University and Allegany County. If constructed, various forms of public transportation serving the community would be aggregated at one site in close proximity to the Center Street property. Frostburg has a history of underground mining and commercial/institutional buildings of certain scale in certain locations have required subsurface grouting to provide a suitable building base. Mapping resources of underground mine activity are available through Maryland Bureau of Mines and/or Frostburg State University. Preliminary research indicates subsidence may not be an issue in this location due to the number and depth of the coal seam(s) that were mined; however, a geotechnical study during the negotiation period with the City is strongly recommended to the developer. 2. PROJECT DEVELOPMENT GUIDELINES: This initiative seeks the new construction of a 2 to 4-story mixed use development, with ground floor space that is retail, office, or a combination thereof, and upper floors that are market rate residential units designed to attract professionals at nearby employers, including Frostburg State University. The number of residential units that may be supported will vary based on the number of bedrooms per unit, but 24 to 48 units are anticipated. The building and all core systems must meet all City of Frostburg code requirements (current Maryland Building Performance Standards) upon project completion.
A. Residential Units: The residential units may be of various sizes and bedroom configurations with the following preferred minimum square footage requirements. The sizes and configurations set forth below are not intended to preclude other sizes and configurations.
• One bedroom – 500 square feet • Two bedroom – 625 square feet • Three bedroom – 750 square feet
The following features and amenities are required for residential units:
• Interior hallway access to units • Central HVAC or ductless mini-split system • Datacom and phone wiring to each tenant space • Washer and dryer • Wood veneer or solid wood kitchen and bathroom cabinets
• Approved solid surface counter tops in kitchens and bathrooms • Recessed lighting • Ceramic, Porcelain Tile, or approved vinyl in bathrooms and kitchen • Hardwood flows or approved solid surface flooring in halls and other common
areas • Hardwood floors or wall to wall carpeting in bedrooms • A video system including a camera inside each exterior entry door • An intercom system on the exterior of the building and door release button in
each apartment. • Outdoor amenities (e.g. balconies, roof top decks, porches, etc.) where possible. • Communal amenities such as a fitness center, fire pit, outdoor patio area, etc. are
encouraged.
B. Commercial Units: The ground floor commercial space shall be used for retail, restaurants, branch banks, personal service businesses, arts and entertainment enterprises, offices, including medical and dental offices, and other similar uses permitted by the Zoning Ordinance. The following features and amenities are required for commercial units:
• Central HVAC or ductless mini-split system • Fully wired for internet and phone access •
C. The Building: The building shall have the following features:
• Dusk-to-dawn lighting at the exterior doors and within every vestibule • Exterior security cameras providing a 360-degree view of the building • Façade should be brick, stone, or fiber-cement siding, or a combination thereof • Fire alarm and automatic sprinkler protection required • Sound transmission rating between units of a minimum for STC 60 for partition
walls • Onsite parking for tenants required (see Zoning Ordinance for more information)
3. DEVELOPMENT AGREEMENT The City’s final acceptance of a proposal is contingent upon its entry into a development agreement with the selected developer. The agreement shall include the matters set forth in Section 2 of this RFP and this section together with other details and requirements for the project.
A. Tax Rebates/Credits; Purchase Price Concession
Tax rebates or credits or other uniquely structured incentives will not be offered from or through the City of Frostburg or Allegany County. The City’s ability to incentivize the development of the property is limited to concessions on its purchase price. The development agreement shall include benchmarks for the project and development of the property. The following benchmarks are strongly preferred but may be negotiated. but can be negotiated with justification from the developer. The period of performance shall be included within the development agreement.
• Within 45 days of property transfer – conceptual renderings, floor plan, and lot
layout should be provided to the City. • Within 270 days of property transfer - final construction and site development
plans shall be submitted and approved by the City. • Within 90 days of plan approval, ground breaking, subject to winter weather shut
down • Within 455 days of plan approval, issuance of use and occupancy permit.
B. Protections for City
The deed for the property will include rights of reverter providing that the title to the property will revert to the City in the event project benchmarks are not met. The City acknowledges that it is unlikely that a developer will be able to obtain financing for the project unless any rights of reverter are rescinded. The City will rescind such rights when the developer secures financing from a financier approved by the City. The developer will be required to post security for the performance of its obligations under the terms of the development agreement before the rights of reverter are rescinded. Such security may include bonding, a letter of credit or other security for the performance of the developer’s obligations under the terms of the development agreement which is approved by the City Attorney. The form and terms of the bond, letter or credit and alternate security also be shall be subject to the approval of the City Attorney. The City, its employees, agents, representatives and contractors shall have the right to enter upon the property to inspect it from time-to-time. They shall also have the right to enter upon the property for the purpose of completing the project in the event of a default in the terms of the development agreement. The City’s right to complete the project may be subject to a financier’s right to step into the developer’s shoes and assume its obligations under the terms of the development agreement. The eight (8) parcels comprising the property shall no longer be considered to be lots of record and that any future division of the property shall be subject to the terms of the City’s Subdivision Ordinance. The deed shall include a statement to this effect.
4. PARTNERSHIP / INCENTIVES
As the property is situated directly across Center Street from the campus of Frostburg State University, the University has a keen interest in the development complementing and enhancing the community and providing value to the students, faculty, and/or staff. As such, Frostburg State University will discuss opportunities for a cooperative relationship with the developer to include the potential for a public-private partnership in the development and/or operations of the property or any components or the development. The University also owns property located between the project site and the aforementioned roundabout that could be discussed as a component of an overall larger project. The City of Frostburg may assist the developer by convening County and State partners to discuss programs, loans, and/or resources that may be applicable to the project. Due to the location of the property, certain state and federal incentives are available. The property is located in an Opportunity Zone. The property is located in the Frostburg Enterprise Zone and the commercial space will be eligible for participation in that program. This project is located in a Maryland Department of Housing and Community Development designated Sustainable Community. As such, it would be eligible for consideration for Neighborhood Business Works loans as part of the financing package. Tri-County Council of Western Maryland may be an additional resource outside of traditional bank funding for this project. 5. ITEMS TO BE PROVIDED BY THE CITY:
The City will provide all such interested respondents to this RFP with digital copies of the BAE Economics Housing market demand study.
6. EVALUATION CRITERIA:
The Selection Committee will recommend the firm (or project team) to the City Council that best meets the following criteria (in no particular order and with no particular weighting):
• Qualifications & Experience of Developer's Design and Construction
Team:
o Demonstrated experience as a project developer for a mixed-use development or a combination of both residential and commercial projects
o Demonstrated experience designing and constructing projects with requirements similar to those set forth in this RFP.
• Qualifications & Experience of Facility Operating Team:
o Demonstrated success with prior projects with professional residential management and high commercial occupancy rate
• Project Characteristics:
o Preliminary development concept and proposed amenities o Proposed project schedule/timeline o Proposed project management/delivery plan, including relevant quality
control measures o Proposed property management approach o Proposed ancillary development plan (if any) o Anticipated value of completed project
• Project Partnership & Funding:
o The purchase price for the property o Preliminary estimated project cost o Financial condition of the primary project firm with supporting
documents o Preliminary financing plan, identity of project funders and proof of
availability of funding o The nature and timing of project financier’s commitment o Any other relevant elements
7. SCHEDULE FOR RFP SUBMISSION:
A response to this RFP should be submitted to and received by the City at 37 Broadway, Frostburg, MD 21532, Attn: Elizabeth Stahlman no later than December 17, 2021, at 11:00 AM local time. Other dates of interest concerning this RFP process include:
• No Deadline: Indicate your interest in responding via email at
[email protected]. • November 30, 2021: Non-Mandatory Pre-Proposal Conference will be held at 11:00
am in the Frostburg Municipal Center, Room 100 at 37 Broadway, Frostburg, MD or via zoom (TBD). Minutes will be distributed as an addendum to all firms that submitted their interest in responding.
• December 3, 2021: 4:30 PM deadline for any questions from proposing firms. Responses to Q&A will be distributed as an addendum to all firms that submitted their interest in responding by December 9, 2021.
• December 17, 2021: Proposal receipt deadline at 11:00 AM local time. • Week of January 3, 2021: Approximate target date for on-site interviews, if
necessary. • January 13, 2021: Staff review proposals with the Mayor and City Council
• January – March 2022: Approximate target date to begin negotiations with the selected firm. Upon completion, the City Council will approve the development Agreement and the project will commence.
If the developer fails to start construction within one calendar year from the date of the development Agreement, the Agreement can be terminated at the City's discretion.
8. PROPOSAL SUBMISSION INSTRUCTIONS:
Please send an email to Elizabeth Stahlman, City Administrator at [email protected] to express your interest in responding to this RFP and to be eligible for future RFP Addendum or other notifications.
The proposal document submitted by each firm should be organized in six (6) clearly labeled sections and provide requested information as follows:
1) Introduction - Cover page, cover letter, and table of contents. 2) Firm Information (Primary) - Information for primary firm, including firm
history and background, office and contact information for this project, resumes of assigned persom1el, and case studies (with project reference) for relevant projects.
3) Firm Information (Subcontractors)-Additional firm information (as described above) for known sub-contractors, which at minimum should include design, construction management, and property management, unless provided in-house by the primary firm.
4) Proposed Concept - Preliminary concept. In this section, please include: a) conceptual sketch of the exterior of the property and site plan; OR a
detailed description of the property appearance, siting on the property, building footprint size, proposed number of parking spaces.
b) Narrative of number of residential units and amenities to be provided for the residential tenants
c) preliminary project development timeline, d) preliminary construction cost estimate, e) narrative regarding proposed project management/delivery plan, f) narrative regarding proposed property management, g) narrative regarding proposed ancillary development plan (if applicable), h) narrative regarding potential lease space for commercial and/or office space
on first floor 5) Purchase Price Range and Financial Capacity - Provide an estimated range in which your firm expects to pay for the property, if selected based off of your plan and the factors provided in this RFP. Based on the preliminary construction cost estimate for your concept, and the purchase price for the property please provide a preliminary financing plan. If possible, please base this plan on one of the scenarios above and similar models that you have found successful for other
projects. In this section, please also include: a) statement of financial condition of the primary firm (note: please mark this as "confidential" if you do not wish it to be considered as public information), b) the identity, credit history and past performance of any third party that will provide financing for the project and the nature and timing of their commitment, and c.) any other relative information related to a successful financing plan.
Any other information that the respondent wishes to include that is not outlined above should be attached as a separate appendix.
Responses shall be submitted to and received by the City at 37 Broadway, Frostburg, MD 21532, attn: Elizabeth Stahlman no later than December 17, 2021, at 11:00 AM local time consisting of and labeled as follows:
• Sealed envelope including five (5) printed copies and one (1) digital copy on a USB
flash drive. • Please label envelope clearly on the outside as "REQUEST FOR PROPOSALS:
CENTER STREET REDEVELOPMENT" and also include the name and address of the lead firm on the front of the envelope.
• All responses should be signed in ink by an authorized principal of the lead firm.
9. TERMS & CONDITIONS OF THIS RFP:
The City reserves the right to reject any and all responses to this RFP, and even if the City does elect to begin negotiations with any firm that responds to this RFP, the Project Description described above is in no way binding on the City.
The City shall not pay any costs incurred by any responding company for time and/or materials used to prepare the response or make any presentation(s) related to this RFP.
Any submitted responses become the property of the City of Frostburg. The City of Frostburg and its agency partners will review the responses and investigate the qualifications of the team members and the demonstrated ability to perform satisfactorily, as well as the financial stability of the firms submitting the responses. The City of Frostburg reserves the right to require either telephone or personal interviews with each firm submitting a response. The City of Frostburg reserves the right to reject any or all responses in any order or combination, accept or reject any portion of a response, make modifications to the project after submission of the responses, and waive any formalities in responses if they deem it is in the best interest of the City of Frostburg do so, without liability on the part of the City.
Neither this Request for Proposals nor the City's consideration of any proposal shall create any contract, express or implied any contractual obligation by the City to any respondent, or any other obligation by the City to any respondent. The City makes no promise, express or implied, regarding whether it will enter into an agreement with any respondent or regarding the manner in which it will consider the submitted responses to this RFP.
Applicants should note that freedom of information statutes give any person ("a requesting party") the right to obtain government documents unless the documents (or portions thereof) are exempt from disclosure as specifically enumerated in the applicable statute. The City does not intend to release proposal documents until such time as a development agreement is entered into with the successful applicant as such earlier release may cause substantial harm to bidders’ competitive positions. Information that is exempt from disclosure includes, for example, trade secrets and confidential commercial and financial information. Applicants are solely responsible for marking the applicable portions of their proposals as "confidential". Failure to designate information as confidential or marking substantial portions or the entirety of a bid submission as confidential in an arbitrary manner may result in disclosure to a requesting party. Attachments: Site photograph Roundabout Preliminary Design BAE Economics Housing Market Analysis
DoIT, MD iMAP, MDPCenter Street Redevelopment Project Area
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bae urban economics
Frostburg Demographic, Economic and Market Analysis For the City of Frostburg, Maryland
June 30, 2020
Contents EXECUTIVE SUMMARY ............................................................................................................... 1
INTRODUCTION .......................................................................................................................... 2
METHODOLOGY ......................................................................................................................... 3
DEMOGRAPHIC AND ECONOMIC CONDITIONS.......................................................................... 4
Population and Households ........................................................................................................ 4
Household Composition ............................................................................................................... 6
Household Tenure ........................................................................................................................ 7
Age ................................................................................................................................................ 8
Income ....................................................................................................................................... 10
Race and Ethnicity .................................................................................................................... 11
Resident Employment ............................................................................................................... 11
Employment by Industry ........................................................................................................... 12
RESIDENTIAL REAL ESTATE MARKET ...................................................................................... 14
For-Sale Residential .................................................................................................................. 14
For-Rent Residential ................................................................................................................. 15
RETAIL REAL ESTATE MARKET ANALYSIS ............................................................................... 17
SUMMARY OF FINDINGS ......................................................................................................... 18
bae urban economics
San Francisco Sacramento Los Angeles Washington DC New York City
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Berkeley, CA 94710 Davis, CA 95616 Los Angeles, CA 90013 Washington, DC 20002 New York, NY 10001
510.547.9380 530.750.2195 213.471.2666 202.588.8945 212.683.4486
www.bae1.com
June 30, 2020
Elizabeth Stahlman
City Administrator
Frostburg City Hall
59 E Main St, Frostburg, MD 21532
Dear Ms. Stahlman:
BAE Urban Economics is pleased to submit this Demographic, Economic and Market Analysis
of Frostburg ahead of a potential new mixed-use development on city-owned property on
Center Street. This report includes data on existing demographic and economic conditions in
the city as well as current real estate market information. The real estate market information
is presented by sector and includes a review of for-sale residential, for-rent residential and
retail market conditions and trends.
The data and information presented here will help inform the feasibility of new development
on Center Street, identifying regional demand and the opportunities for Frostburg to capture it.
We look forward to presenting the findings from this study in the future.
Thank you for the opportunity to work with the city of Frostburg on this important project. It has
been a pleasure working with you.
Sincerely,
Mary Burkholder
Associate Principal
1
EXECUTIVE SUMMARY
BAE Urban Economics, Inc. was engaged by the City of Frostburg to conduct a market study
evaluating the demand for a new multifamily and retail development on Center Street. This
study includes an analysis of demographic and economic trends in Frostburg, comparing the
city to Mineral County, WV, and the Cumberland Metropolitan Statistical area to add context.
Data on the residential for-sale and for-rent markets were also analyzed, as well as data on the
retail market. Findings were evaluated alongside interview transcripts from discussions with
local stakeholders, including the Vice President for Regional Development and Engagement at
Frostburg State University, two local real estate brokers, and the economic development
directors of Allegany and Mineral counties.
The challenge in assessing the market for a new development in Center Street is that, on first
glance, potential new demand may appear limited given the decline in overall population in the
region. Nevertheless, regional economic development agencies and Frostburg State University
work actively to locate high-paying technology and engineering jobs in the area, seeking to
build upon the existing base of aerospace supply chain jobs. Projections of jobs from specific
employers demonstrate there is a growing base of relatively high-income young professionals
in the region, with Frostburg as a desirable location for these workers to live. Higher-end
apartments for rent in Frostburg currently have little to no vacancy, which suggests that there
is demand for new multifamily development. This same growing base of young professionals
can potentially support new retail development as well.
This report includes an overview of the methodologies employed in conducting this study,
findings from the analysis of demographic and economic data, and an evaluation of real estate
market data. Findings from the data analysis are compared to and consolidated with
information provided during stakeholder interviews, in order to gain a clear picture of the
existing market conditions in Frostburg and the surrounding areas.
2
INTRODUCTION
BAE Urban Economics, Inc. was engaged by the City of Frostburg to conduct a market study
evaluating the demand for new multifamily and retail development at Center Street. The
challenge for the study is to evaluate demand despite population and household projections
that suggest Frostburg and the Cumberland Metropolitan Statistical Area (Cumberland Metro)
will shrink over the next 10 to 15 years. While this overall trend may be true given the rural
nature of the region, the market analysis demonstrates that there are new, high paying jobs in
the region being created every year. This is due mainly to the presence of Rocket Center in
Mineral County, West Virginia, which not only has hundreds of jobs itself, but is the epicenter
of a larger aerospace technology supply chain industry that is well-established in the region.
In addition, local jurisdictions and others including the city of Frostburg, Cumberland, and
Allegany County economic development organizations, and Frostburg State University (FSU),
are actively working to attract businesses with high-paying jobs. For example, a new branch of
the University of Pittsburgh Medical Center system opened in Cumberland in 2019, which
supports many higher-paying jobs. Berkeley Springs Instruments, which also high-paying jobs,
is relocating its headquarters from Cumberland to newly-built facility in Frostburg itself.
Whether the high-paying jobs growth is in the region generally or within Frostburg, the city is
unique within the region due to the presence of FSU. The range of retail, restaurants and
entertainment options are both numerous and located conveniently in a walkable downtown
that includes relatively dense residential development.
Frostburg’s relatively high number of attractions for the region has translated to demand for
smaller, rent-based housing products from the young professionals that are increasingly
moving to work in the area. Indeed, many of the apartments on Main Street in Frostburg have
been rehabilitated or redeveloped with this target market in mind, and they are all at zero to
very low vacancy. There is potential for this target market to generate increased demand for
retail, particularly retail above and beyond just student-oriented retail, and projects such as
the redevelopment of the Gunter Hotel as well as the increasing number of bars and craft
breweries indicate that businesses recognize this potential.
The findings of this study follow a brief discussion of the methodologies employed in
conducting the study, which included both data analysis and stakeholder interviews. As the
results demonstrate, there does exist a market for new, higher-end residential and retail
development at Center Street, although it does depend on the sustained success of regional
economic development efforts.
3
METHODOLOGY
This study includes an analysis of demographic and economic trends in Frostburg, comparing
the city to Mineral County, WV, and the Cumberland Metropolitan Statistical area to add
context. Data on the residential for-sale and for-rent markets were also analyzed, as well as
data on the retail market. Findings were evaluated alongside interview transcripts from
discussions with local stakeholders, including the Vice President for Regional Development
and Engagement at FSU, two local real estate brokers, and the economic development
directors of Allegany and Mineral counties.
Data was obtained from a range of sources including Esri Business Analyst, the American
Community Survey, CoStar, and Zillow. Given the rural nature of the region, CoStar data on
multifamily and retail markets was limited. Data from CoStar that was available was the basis
of inquiry for confirmation from knowledgeable local stakeholders. Findings presented in this
study on the for-rent residential and retail markets are presented as ranges based on an
evaluation of the quantitative and qualitative data. BAE staff also conducted a physical survey
and tour of the both the Center Street site and the city of Frostburg overall with the City
Administrator, Elizabeth Stahlman. This enabled further corroboration of research findings.
It is important to note that population and employment projections for Frostburg and the
Cumberland Metro show a decline over the next 10 to 15 years, and this overall projection is
not disputed. However, there has been growth in higher-paying jobs and the number of young
professionals in the area, as the findings show. As the purpose of the study is to assess the
market for development catering to this population, the analysis and projections of demand
are based on growth in this population and identifying demand from elsewhere, if any, in the
context of broader regional trends. Thus, the projections that show an overall shrinking of the
region are not germane to this study, and the accuracy of those projections is not reevaluated
here.
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DEMOGRAPHIC AND ECONOMIC CONDITIONS
This report provides an analysis of demographic, economic and real estate market data from
the city of Frostburg for a potential mixed-use development on Center Street. The feasibility of
the project will depend in part on the market strength of the local and surrounding areas. The
analysis includes an overview of existing conditions in Frostburg, and a comparison to
conditions in Mineral County, West Virginia, and the Cumberland Metropolitan Statistical Area
(Cumberland Metro).1
Population and Households
The estimated population in Frostburg is 8,770, which represents a 2.8 percent decline since
2010. This trend is generally in line with the population decline of the Cumberland Metro
overall, which was 2.4 percent between 2010 and 2019. However, while the trends may be
related as Frostburg is part of the Cumberland Metro, at least some of the decline of
Frostburg’s population is owed to declining enrollment at FSU over the past 10 years.
Although also a part of the Cumberland Metro, Mineral County notably experienced population
growth of 1.1 percent between 2010 and 2019.
Like population trends, the number of households in Frostburg and the Cumberland Metro
declined overall between 2010 and 2019, although the number of households fell at a greater
rate in the city of Frostburg. On the other hand, Mineral County households increased by 1.7
percent. Mineral County and the Cumberland Metro have similar average household sizes
(between 2.3 and 2.4 persons per household), and this is notably higher than in Frostburg,
where the average household size is currently 2.16 persons per household. This is not
surprising given that Frostburg is a college town, meaning there is a greater share of students
in the city than in the comparison geographies. According to real estate brokers and local
stakeholders, there has been a growing trend of recent college graduates and young
professionals that work in the Cumberland Metro choosing to live in Frostburg. However, it is
unclear in the data the extent to which this population has impacted average household size in
the city. Average household did not change significantly between 2010 and 2019 in any of the
three geographies. Trends in population, households and average household size are
summarized in Table 1.
1 The Cumberland, MD-WV Metropolitan Statistical Area (MSA) is defined as the combination of Allegany County,
Maryland and Mineral County, West Virginia. It is referred in short as the 'Cumberland Metro'
5
Table 1: Population, Households and Average Household Size, 2010-2019
Notes: (a) The Cumberland, MD-WV Metropolitan Statistical Area (MSA) is defined as the combination of Allegany County, Maryland and Mineral County, West Virginia. It is referred in short as the 'Cumberland Metro' Source: ESRI Business Analyst, BAE 2020.
Population and household projections from the Maryland Department of Planning suggest that
the City of Frostburg and Allegheny County will shrink in size. However, these estimates do not
consider active economic development efforts undertaken by the city of Frostburg, FSU and
other regional stakeholders and jurisdictions. The pipeline of new jobs will be discussed in the
Resident Employment section below, but in general, FSU itself has a significant impact on
population growth in the region. Since 2010, 3,580 FSU alumni across all degree programs
have settled within 50 miles of Frostburg, which is an average of 358 new regional residents
per year2. Even if there is still an overall decline in population over the next 10 years in
Frostburg, there is a consistent base of young professionals with college degrees who will
potentially work and live in the City.
As shown in Figure 1, although undergraduate enrollment at FSU has declined since the Fall
Semester of 2010, graduate and doctoral enrollment has increased. Furthermore, while there
is excess capacity in terms of dorms for undergraduates, there are no extra beds for the
growing graduate student population, according to Al Delia, Vice President for Regional
Development and Engagement at FSU. These graduate students would make up at least
some of the demand for higher-quality apartments in Frostburg.
2 “Count of Alumni within 50 miles of FSU” – data provided by Frostburg State University, 2020.
6
Figure 1: Frostburg State University Enrollment Trends, 2010-2019
Source: Frostburg State University, BAE; 2020
Household Composition
Table 2 shows how the composition of households have shifted over the past 10 years. The
decline in households in Frostburg is due almost entirely to the decline in non-family
households, which likely reflects the declining enrollment at Frostburg State University. The
growth Mineral County experienced between 2010 and 2019 was based on an increase in
non-family households, as family households only increased by 0.2 percent. This may be
explained by the increase in young workers relocating to the area for jobs in Rocket Center.
The overall decline in population and households in the Cumberland Metro is due to a decline
in the number of family households, which contrasts with the city of Frostburg.
Therefore, given that Frostburg’s population and household trends are most likely due to
declining college enrollment at FSU and that Mineral County, in fact, grew between 2010 and
2019, the negative trends in the Cumberland Metro are indicators of weakening economic
conditions in places other than Frostburg and Mineral County, such as the city of Cumberland
itself. The negative trends in the Cumberland Metro do not necessarily undermine the viability
of a mixed-use development in Frostburg, particularly given Frostburg’s proximity to the
employment centers in growing Mineral County.
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Table 2: Household Composition, 2010-2019
Source: ESRI Business Analyst, BAE 2020.
Household Tenure
In Mineral County and the Cumberland Metro, overall household tenure shifted from owner-
occupied to renter-occupied. Despite less than 2.0 percent household growth in Mineral
County and the decline in households in the Cumberland Metro, renter-occupied housing
increased by 30.3 percent and 20.2 percent, respectively. In Frostburg, owner-occupied
housing fell by 9.6 percent and renter-occupied housing increased by 2.6 percent. Given
declining enrollment, it is possible that Frostburg is also affected by national trends towards
increased renter-occupied housing. In any case, compared to Mineral County and the
Cumberland Metro, Frostburg has a much higher rate of renter-occupied housing given the
presence of students. As shown in Table 3, nearly 60 percent of Frostburg households are
renter-occupied, compared to 29.5 percent in Mineral County and 35.1 percent in the
Cumberland Metro.
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Table 3: Household Tenure, 2010-2019
Source: ESRI Business Analyst, BAE 2020.
Age
As shown in Table 4, the median age in Frostburg is estimated to be 26.9 years, an increase
from the median age of 24.1 in 2010. Despite population decline, the population aged 25 to
34 increased by 46.8 percent, which corresponds to observations made by local stakeholders.
The median age in Mineral County (44.9) and in the Cumberland Metro (43.2) are comparable,
and much older than in Frostburg. Nonetheless, the population aged between 25 and 34 also
increased by 15.0 percent and 12.2 percent, respectively, in Mineral County and the
Cumberland Metro. This suggests there is potentially a market for housing for young
professionals, which the Center Street project aims to capture.
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Table 4: Age Distribution, 2010-2019
Source: ESRI Business Analyst, BAE 2020.
Additionally, based on discussions with human resources staff at the IBM facility in Rocket
Center, new hires tend to be between 25 to 34 years old, which corresponds with the trends in
the data. Discussions with real estate brokers from Frostburg echo the finding that young
professionals make up an increasingly large share of the city’s population.
In all three geographies, there was also a significant increase in the 65 years and older age
cohort. The 28.4 percent increase in the population aged 65 and older in Mineral County is at
least, in part, explained by the observation of local real estate brokers that Mineral County is a
desirable location for retirees. Moreover, real estate brokers and IBM human resources staff
noted that of the new hires in Rocket Center, older executive hires tend to locate within
Mineral County. However, the population aged between 55 and 64 grew at a faster rate in
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Frostburg (10.6 percent) than in Mineral County (4.3 percent). This age cohort may present a
market opportunity for new housing in Frostburg as well.
Income
The median household income in Frostburg is $36,970, which is lower than in both Mineral
County and the Cumberland Metro, as shown in Figure 2. This is likely due to the presence of
students in Frostburg. Notably, Frostburg has a greater share of households earning over
$150,000 than Mineral County. Overall, the income distribution in Mineral County and the
Cumberland Metro is similar, while Frostburg incomes are skewed by students.
Figure 2: Income Distribution, 2019
Source: ESRI Business Analyst, BAE 2020.
Discussions with IBM staff and Mr. Delia of FSU reveal that the kinds of jobs generated at
Rocket Center and the nature of businesses relocating to the region are generally higher
paying. Young professionals newly hired at IBM earn starting salaries of approximately
$75,000 a year. This is comparable to salaries in software development and engineering
outside of Rocket Center that are increasing in Frostburg and the region. It is also noteworthy
that FSU is actively working to create a pipeline of students for these kinds of jobs. Even if it is
not most of the housing demand, imminent job growth will include jobs with this higher range
of salaries, which would support higher-end development for the Center Street project.
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Race and Ethnicity
Frostburg is more racially and ethnically diverse than either Mineral County or the Cumberland
Metro. However, while the share of non-Hispanic White residents has declined in all three
geographies over the past 10 years, Frostburg, Mineral County and Cumberland are all over 80
percent non-Hispanic White. Mineral County is the least diverse. This is summarized in Figure
3.
Figure 3: Racial and Ethnic Distribution, 2019
Notes: (a) All Other Race/Ethnicities includes Native American, Asian, Native Hawaiian/Pacific Islander and 'Other' residents, as well as residents of Two or More Races Source: ESRI Business Analyst, BAE 2020.
Resident Employment
As shown in Figure 4, resident employment data reveals that a greater share of Frostburg
residents likely work in higher-paying jobs than residents of Mineral County and the
Cumberland Metro. Frostburg has the highest share of residents working in Professional,
Scientific, and Technical jobs, and in Information jobs, which is supported by comments from
local sources. According to Al Delia, Vice President for Regional Development and
Engagement at FSU, who tracks local employment, a significant share of new young residents
in Frostburg are employed at jobs in Rocket Center, the Western Maryland Medical Center, and
companies like Exclamation Labs and Berkeley Springs Instruments (BSI). As aforementioned,
BSI is moving from Cumberland to a new headquarters in Frostburg by 2021.
Specific jobs with these employers include software developers and engineers. Not
surprisingly, a large share of Frostburg residents is employed in Educational Services. Mineral
County has the smallest share of residents employed in the Professional, Scientific, and
Technical jobs and Information sectors, despite being home to Rocket Center. Mr. Delia also
12
believes there is potential for Frostburg to attract workers from urban centers such as
Pittsburgh, Baltimore and Washington, DC, given the rise of teleworking generally, particularly
after the COVID-19 lockdowns.
Figure 4: Resident Employment, 2019
Source: ESRI Business Analyst, BAE 2020.
Employment by Industry
Interestingly, despite the presence of Rocket Center, Mineral County has the smallest share of
Professional, Scientific, and Technical jobs and Information jobs, although it has the largest
share of Manufacturing jobs. This may be due the classification of jobs in Rocket Center,
where there is at least some manufacturing. Notably, Frostburg has the largest share of
Professional, Scientific, and Technical jobs, and Information jobs, particularly the latter.
Frostburg has a relatively small share of Manufacturing and Construction jobs compared to
Mineral County and the Cumberland Metro. This is summarized in Figure 5.
13
Figure 5: Employment by Industry, 2019
Source: ESRI Business Analyst, BAE 2020.
The presence of FSU also has a dynamic effect on employment in the region. According to Mr.
Delia from FSU, the Frostburg State University Division of Regional Development &
Engagement assists regional economic development organizations by aligning student
programs and education with the workforce needs of industry clusters present in Western
Maryland and the region in general. Some such industries include lifestyle manufacturing (i.e.
bootmakers, canoe builders, etc.), software technology and the aerospace supply chain.
Based on the coordinated efforts of regional economic development organizations, including
Frostburg State’s, Mr. Delia estimates that several hundred and up to one thousand new jobs
will be created over the next 10 years in the five-county region he defines as the combination
of Allegheny County and Garrett County in Maryland, Mineral County in West Virginia, and
Bedford and Somerset Counties in Pennsylvania. According to Mr. Delia, given the rural nature
of the region, and as evidenced by commuting patterns, inter-county commuting between the
region is very common and he believes economic development in any of the five counties
helps to support growth region-wide. According to Jeff Barclay, Director of Allegany County
Department of Economic and Community Development, the ATK facility at Rocket Center is
committed to hiring 543 new people over the next five years.
Rocket Center is a major employment center for the region, and discussions with human
resources staff at the IBM Facility in Rocket Center revealed that there are 40 to 50 net new
hires on an annual basis at IBM alone, and that most of these hires are young professionals
working in information technology. IBM has experienced challenges in recruitment specifically
14
due to the limited range of housing options, and human resources staffers themselves often
work to settle new hires in the region. Therefore, new housing products that include amenities
not found in other apartment units in the region, such as WiFi, restaurants and fitness
facilities, may help IBM and other companies at Rocket Center increase the number of annual
new hires. However, any indirect impact of improved housing options on the ability of Rocket
Center companies to attract and retain new hires may be marginal, as the overall employment
at Rocket Center is largely based on government contracts.
RESIDENTIAL REAL ESTATE MARKET
For-Sale Residential
As shown in Table 5, of the 108 homes sold in Frostburg in 2019, 78.7 percent had more than
two bedrooms, and there were no one-bedroom units sold. The median size of homes sold in
2019 in Frostburg was 1,886 square feet, and the median sale price was $117,450. As
Frostburg home sale data was analyzed, it became clear that many of the larger homes are
intended for students and split into duplexes. This may help to explain why the average price
per square foot of these sold homes is lowest for units of five bedrooms or larger. It is unclear
why the average price per square foot is highest for four-bedroom units, as these are a mix of
both student housing and higher-end single family homes. There may be a competitive market
for four-bedroom student housing units, and newer four-bedroom units in subdivisions like
Sand Springs are relatively expensive compared to the rest of the market.
Table 5: Frostburg Home Sales Price Distribution, 2019
Source: Redfin, BAE 2020.
It is notable that the second-highest price per square foot of homes sold in 2019 was for two-
bedroom units. While they are single-family detached homes (i.e., not apartments), these
units indicate that there is a relatively healthy market for smaller homes, which could point to
15
demand for higher-end multifamily units as well. Based on an overview of the data, the two-
bedroom units sold were not intended as student housing.
The sales price distribution of homes sold in 2019 varies between Frostburg, Mineral County,
and the Cumberland Metro. Nevertheless, as shown in Figure 6, the distributions of average
sales price per square foot by number of bedrooms in Mineral County and the Cumberland
Metro are comparable. Excluding unique one-bedroom units, in both Mineral County and the
Cumberland Metro, the average sale price per square foot was highest for three-bedroom
units, and similar to the average sale price per square foot for four-bedroom units. This
contrasts with the relatively higher price per square foot of two-bedroom units in Frostburg
compared to three-bedroom units, which could suggest that the demand for smaller units is
higher in Frostburg than elsewhere in the region. Indeed, two-bedroom units made up a larger
share of 2019 home sales in Frostburg (21.3 percent) than in Mineral County (15.7 percent)
or the Cumberland Metro (16.3 percent).
Figure 6: Comparison of Home Sales Price Distribution, 2019
Source: Redfin, BAE 2020.
For-Rent Residential
BAE obtained data from CoStar on multifamily rental units in Frostburg, Mineral County, and
the Cumberland Metro. However, the data was incomplete and unreliable on its own as CoStar
data is typically stronger in urban markets where there are more frequent real estate
transactions. As a result, the data presented on the for-rent residential units inventory are
based on input from local real estate brokers. CoStar data were used a baseline to compare
16
input from real estate brokers and any major discrepancies were discussed and evaluated.
Table 6 provides an overview of these findings.
Table 6: Overview of For-Rent Units, 2019
Notes: (a) Figures and ranges shown here are estimates based on discussions with local real estate brokers and data obtained from the CoStar Group Source: CoStar; Carter & Roque Real Estate; The Goodfellow Agency; BAE, 2020
According to Kevin Clark, Executive Director of Mineral County Development Authority,
affordable housing developers can get attractive financing to develop in Mineral County.
Developers otherwise struggle to build market-rate apartments because they cannot charge
rents high enough to cover development costs. This suggests a weaker market in Mineral
County and the indication that it simply does not have the kinds of housing options attractive
to young professionals. In addition, given the differences in retail options and walkability
between Frostburg and Mineral County (and specifically, Keyser, WV), it is unlikely there will be
direct competition for tenants between affordable apartments in Mineral County and new
apartments at Center Street in Frostburg.
Two real estate brokers interviewed for this study, both of whom own and manage renovated
apartments in Frostburg that cater to young professionals, describe almost no vacancy in their
properties, many of which are on Main Street. The reasons given for this is the proximity to
retail, restaurant, and entertainment options in Frostburg, described as more desirable than
retail, restaurant, and entertainment options in the city of Cumberland, as well as better
walkability and public safety in Frostburg. Both the city of Cumberland and Frostburg have
more retail, restaurants, and entertainment options, as well as better walkability than Keyser,
where such establishments are smaller-scale and local-serving.
Total Monthly %Geography (a) Units Rent OccupiedFrostburg 240 $600-$1,200 90%-95%Mineral County, WV 80-100 $600-$900 94%-96%Cumberland Metro 900 $500-$1,400 93%-95%
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RETAIL REAL ESTATE MARKET ANALYSIS
As shown in Table 7, there is 438,438 square feet of retail in the City of Frostburg,
representing 8.7 percent of the overall retail inventory of the Cumberland Metro. Although
Frostburg reportedly has the lowest vacancy rate among all three geographies, real estate
brokers, the City Administrator and a physical survey of the city’s retail core found this to be
inaccurate. The inaccuracy of the vacancy data may be due to the fact there are vacant retail
storefronts that could be leased, but are instead unoccupied either because repairs would be
too costly, or because the property owner is simply unwilling to lease retail space. While
asking rents trend data are unreliable, the Q4 2019 asking rent estimates in Table 7 are
considered to be accurate, showing that rents are highest in Frostburg and roughly
comparable to rents in Mineral County and the Cumberland Metro.
Table 7: Retail Market Overview
Notes: (a) The reported retail vacancy rate for Frostburg was 1.0%, although this is disputed by real estate brokers, the City Administrator, and a physical survey of the city's retail core. (b) Asking rents for Q4 of 2018 in Frostburg was unavailable. Source: CoStar, BAE 2020.
Frostburg’s retail core is vibrant, with several unique restaurants and bars, including
breweries, and at least one distillery and one winery. It also boasts several novelty retail
options and a farmer’s market, and it is highly walkable. This contrasts with the retail in
Cumberland, which is less walkable while also being more tourist-serving (it is home to the
C&O Canal Trailhead and the Western Maryland Scenic Railroad). Retail in Mineral County is
dispersed throughout the County and the largest retail core, located in Keyser, is less vibrant
than Frostburg as it is smaller and there is less development, particularly dense development,
surrounding it.
Mineral CumberlandFrostburg County, WV Metro
Summary, Q4 2019Inventory 438,438 802,759 5,037,243Occupied Stock 434,198 770,209 4,894,619Vacant Stock 4,240 32,550 142,624Vacancy Rate (a) 1.0% 4.1% 2.8%
Annual Asking Rents (b)Avg. Annual Asking Rent, NNN (psf), Q4 2018 -$ 9.48$ 10.20$ Avg. Annual Asking Rent, NNN (psf), Q4 2019 10.44$ 9.48$ 9.60$ % Change - 0.0% -5.9%
Net AbsorptionNet Absorption, 2018 2,958 1,950 (38,445)Net Absorption, 2019 (4,240) 1,200 43,476
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Nevertheless, despite the strengths of Frostburg’s retail market, it is not without challenges.
Properties require upgrades, which can be difficult with the number of historic properties in the
city. In addition, with some property owners unwilling to lease or sell their properties, asking
rents may be inflated. Still, ambitious projects such as the upgrading and/or renovation of the
Gunter Hotel, the storefront occupied by J&S Pawn, the former National Bank Building, LG’s
Pizza and Pub building, and the Lyric Building are serving to raise the overall quality of retail in
the city, which may motivate similar development down the line.
It is notable that retail inventory in Frostburg did not increase between 2010 and 2019, so
new retail in the Center Street project would be the first such development in many years. It is
unclear what retail gap exists or if there is significant market demand for new retail space, but
reportedly there have been inquiries about leasing properties on Main Street that have been
refused by property owners, for whatever reason. This may be an indicator of demand for
retail space that is not being met. Ultimately, the demand for new retail in Frostburg will be
driven by regional employment growth and the success of Frostburg and FSU to capture new
employees as city residents. There may be existing unmet demand for retail space, but the
vision of retail for the Center Street development hinges on young professionals choosing to
live in Frostburg, and evidence of that is not found in the snapshot of the current retail market
in the city.
There is some indication that university-focused retail at the Center Street location could be
supported by students. One idea that has been floated is moving the FSU student bookstore
off campus into the potential new mixed-use development on Center Street.
There is also little evidence in the retail market data that Frostburg is competing with other
locations elsewhere in the Cumberland Metro to capture retail demand. The Cumberland
Metro retail inventory increased by 2.3 percent between 2010 and 2019, representing an
increase of 112,985 square feet. This is a relatively modest amount of development for the
two-county region, suggesting retail growth was limited region-wide.
SUMMARY OF FINDINGS
This market analysis for the City of Frostburg intends to evaluate the demand for new
multifamily and retail development at Center Street. Based on the methodologies employed in
this study, which include data analysis, stakeholder interviews, and a physical survey of the
city, current demand would support new development at Center Street. As detailed in the
summary of findings below, the demand is strongly supported by the active efforts of regional
economic development agencies and FSU to locate high-paying technology and engineering
jobs in the area, building on the assets that Rocket Center provides and the aerospace
technology ecosystem it has created.
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While the demand is regional and could theoretically be met in the city of Cumberland or in
Keyser, WV, Frostburg already has a larger base of younger population. FSU has the effect of
both providing the city a base of residents, as well as potentially generating demand for
increased and higher-end retail than in surrounding areas, and new development in Frostburg
is best-suited to capture increased demand from regional economic growth.
• Although the population of Frostburg and the Cumberland Metro is projected to decline
over next 10 to 15 years, specific economic development efforts from local
jurisdictions and organizations has led to the expansion of the aerospace supply chain
industry and have cultivated other jobs in technology and other higher-paying sectors.
• While the population of Frostburg declined over the past 10 years, the trend is
consistent with declining enrollment trends at FSU. On the other hand, the region is
declining overall, as indicated by the decline in the population of the Cumberland
Metro.
• The city of Frostburg has the youngest residents among Mineral County and the
Cumberland Metro, and the fastest growing cohort of residents aged 25 to 24, which
increased by 46.8 percent between 2010 and 2019. This corresponds to the
observation of stakeholders that young workers in the region are attracted to Frostburg
and that there is a pipeline of jobs in the region for FSU graduates.
• While Frostburg has a relatively low median household income, employers in Rocket
Center that hire young professionals pay starting salaries of $75,000, comparable to
other higher-end jobs that attract young professionals to the area, such as jobs in
software development and other jobs at the Western Maryland Medical Center.
• Frostburg has the highest share of residents working in Professional, Scientific, and
Technical jobs, and in Information jobs in the Cumberland Metro. The FSU official
interviewed suggests that a significant share of young graduates that stay in Frostburg,
as well as other young professionals, are employed at jobs in Rocket Center, the
Western Maryland Medical Center, and companies like Exclamation Labs and Berkeley
Springs Instruments (BSI), which is moving from Cumberland to a new headquarters in
Frostburg by 2021.
• Based on observed trends at specific employers and within specific sectors, such as
technology and aerospace, interviewed stakeholders suggest that there will be several
hundred and up to one thousand new jobs created over the next 10 years in the five-
county region that includes the combination of Allegany County and Garrett County in
Maryland, Mineral County in West Virginia, and Bedford and Somerset Counties in
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Pennsylvania. This includes an annual average of 40 to 50 net new hires at Rocket
Center’s IBM facility, alone.
• The for-sale residential real estate market in Frostburg is skewed by the presence of
student housing, as evidence by the very low price per square foot for duplex homes of
5 bedrooms or more. Notably, two-bedroom units sold in Frostburg have a relatively
high average price per square foot, which was the highest for these types of units in
Frostburg compared to Mineral County and the Cumberland Metro. This could suggest
that the demand for smaller units is higher in Frostburg than elsewhere in the region.
• Rent data for multifamily properties was unreliable, although discussions with real
estate brokers showed that Frostburg had higher average rents than Mineral County,
which in Cumberland Metro region, suggest desirability of these properties.
• Renovated apartments on Main Street that cater to young professionals and have
higher rents than student housing, reportedly have almost no vacancy and are the
kinds of units that human resources staff at IBM say are appealing to new hires, as
they often assist new hires with finding suitable housing.
• Frostburg has relatively dense development, particularly along Main Street, that
contrasts with Mineral County. In addition, although Cumberland is relatively densely
developed, it is not as walkable as Frostburg. In this sense, Frostburg is best suited for
a new apartment building to leverage the city’s assets to attract tenants.
• Retail rents in Frostburg in Frostburg, Mineral County and the Cumberland Metro are
relatively comparable, but they are lowest in Mineral County. Although this indicates
the relative strength of the Frostburg retail real estate market compared to Mineral
County, Frostburg has a higher than reported retail vacancy rate. While real estate
brokers suggest this is a function of property owners unwilling to manage their
properties, it is unclear what level of demand there is for existing retail space.
• Ultimately, the demand for new retail in Frostburg will be driven by regional
employment growth and the success of Frostburg and FSU to capture new employees
as city residents. There may be existing unmet demand for retail space, but the vision
of retail for the Center Street development hinges on young professionals choosing to
live in Frostburg.