EDA debates viability of 'virtual shell' and other strategies; members ask for targeted industry research

Montgomery County Economic Development Authority members discussed multiple approaches to attract industry to Falling Branch and the broader county, and asked staff to research targeted industry needs and finance models.

Brian (staff member) reviewed a “virtual shell” idea — a fully engineered site and building plans developed in advance to shorten construction schedules — and said the approach could shorten delivery by roughly six months but is costly. He said historical assumptions no longer hold: a building once estimated at about $60 per square foot would now cost “about $200 a square foot,” and material-price volatility and environmental rules make speculative building expensive.

Several board members urged more-targeted research before committing to an incubator or accelerator model. Ellie (EDA member) suggested examining specific industry targets and gaps in the region to decide whether an accelerator (industry-specific, equipment-capable facility) rather than a general incubator would better serve local strengths. Angie (EDA member) said biomedical-focused accelerators are consolidating near Virginia Tech and suggested the county focus on software, light electronics, materials and non-biomedical manufacturing.

Staff provided examples and pro-forma numbers: a fully conditioned, 20,000-square-foot, 35-foot-clear building was estimated by staff at about $8 million to construct; amortized over 20 years at current interest rates that produced an example cost near $20 per square foot per year in staff calculations, which some existing local firms said would not be affordable. Staff noted existing inventory constraints — the largest available local building listed is about 16,780 square feet — and that many prospects request 20,000 to 63,000 square feet or larger pads of roughly 20–23 acres.

Board members discussed possible county participation to improve affordability: some members suggested a county contribution could lower tenant rates; others said the EDA historically has not pursued speculative buildings and that any financing model should be vetted with the Board of Supervisors. Staff proposed follow-ups: review prospect files and VEDP inventory, survey local firms (including CRC tenants) for specific space needs (e.g., clean rooms, R&D bays, high-bay light-manufacturing space of 4,000–10,000 square feet), and present options and pro formas to the supervisors.

No formal vote was taken; the discussion produced direction for staff to gather data and to return with targeted analysis and cost estimates.