GEICO and Montgomery County Planning Continue Debate Over Headquarters Redevelopment

Image Courtesy of Montgomery County Planning

GEICO, the large insurance company based in the Friendship Heights section of Chevy Chase, MD, once again, presented its case for an extension request in front of the Montgomery County Planning Board.

Since last November, the planning staff has been in disagreement with GEICO over the request that would allow the company to delay redevelopment of its headquarters through June 13, 2020. The review for approval or denial was pushed back and finally settled today. The 26.5 acre property would be developed into 810,000 square feet of office space and 500 residential units (300 multifamily and 200 townhomes). The last extension was approved on April 1, 2011; the Montgomery County Council approved both the redevelopment plan extension and the Adequate Public Facilities (APF) validity period that were set to expire June 13, 2014, and June 13, 2015 respectively. The APF makes sure building plans adding growth fall into the capacity of schools, roads and sewer systems.

GEICO requested the extension because it believes that it does not have the ability to go forward with building a new headquarters at this point in time. The company cited hardship and events beyond its control including the recent recession, but planning staff didn't buy that argument and recommended denial of an extension to the planning board. The staff took the position noting other developments that have been recently completed including Wisconsin Place which includes a Bloomingdale's department store and the regional headquarters of Microsoft. The staff believes GEICO simply doesn't want to build a new headquarters due to numerous extensions.

Attorney Robert Harris of Lerch, Early & Brewer, was joined with Terry Perkins, Assistant Vice President, Real Estate & Facilities Management of GEICO and Steve Silverman, Director of Montgomery County Dept of Business and Economic Development to convince the planning board for an approval of the extension.

Harris said the plan was a special case. He reminded the board that 1974 sector plan for the area essentially banned further development of GEICO's headquarters site until the current Friendship Heights sector plan was adopted in 1999. The company said this forced them build a large facility in Stafford County, Virginia. That location has 3,015 employees in a 530,000 square foot office complex. While the headquarters location in Maryland, employees approximately 2,240 people.

Silverman pointed out that in Montgomery County the current state of depressed business activity was amplified by the lengthy recession and wasn't going to end anytime soon. He also stated Montgomery County has 8 million square feet (out of an approximate total of 64,000,000) vacant office space while Fairfax County has 11 million square feet of vacant space (out of an approximate total of 113,000,000), therefore it was critical to keep a large employer like GEICO in the county.

The planning board has the ability to grant waivers and while it has made exceptions in the past including for FINRA in Rockville and a 12 year extension for Johns Hopkins University Belward Farm Campus, those were due to the applicants not being able to meet APF requirements. But with one of the largest employers in the D.C. area at stake that could make a possible relocation decision the planning board decided to grant a waiver for and approve GEICO's redevelopment plans extension request.

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