The Town of Poolesville’s Community and Economic Development Committee (CEDC) has released its findings of a market study of the Town’s economic climate and commercial opportunities.  An independent research company, Thomas Point Associates, performed the research.

The research data indicates that the top uses for open commercial space in the Poolesville market area, considering demographic data, are restaurants, certain specialty retail shops, and business services.  This matches what the residents and businesses desire according to surveys conducted by the CEDC last year, especially regarding restaurants.

“We have commercial space available for interested businesses,” said Wade Yost, Town Manager.  The vacancy rate as of March, 2007 was 9.7%.

The study also indicated that the Poolesville market area has several attractions worth promoting, including its many historic sites and the proximity to the Potomac River and Sugarloaf Mountain.  Hikers, bikers, equestrians, families, and senior citizens are frequent visitors.  Poolesville is quite accessible within a 1.5 hour drive to a metro population of five million people.

The Poolesville “market area” is described as being the geographic area within a 15 minute drive from the center of town.  Within that area, the population is 9,815 and expected to grow to 10,608 over the next five years, a growth rate higher than the average for Montgomery County.  The population is considered affluent, with a median household income of $87,500 compared to $72,138 for the rest of the county. Nearly three-fourths of the employed population holds white collar jobs.  Traffic counts on the major roads have slightly increased but are not enough for most major retail chains to open a location.

The study recommended that the town improve its marketing to attract more visitors and create a central place that is attractive to residential foot traffic.  Today, the town has four separate shopping areas plus Whalen Park loosely connected by sidewalk.

Overall, the study sees a bright future for the town as a close-in get away, especially as the region grows and the town remains rural.

The Community and Economic Development Committee was commissioned by the town of Poolesville government and consists of representatives from business, government, and residents. The CEDC is planning a summer concert and theater series in Whalen Commons. Other CEDC projects include branding and logo design, website development and the Holiday Lighting Ceremony.

Market Study

This report addresses commercial development opportunities in Poolesville, Maryland.  The Town is located in the center of a rural, agricultural area in the northwest part of Montgomery County.

The Poolesville market area (within a 15-minute drive of the center of Town) has a population estimated at 9,815 in 2006.  Over the next five years, it is projected to grow by 8.1%, to 10,608, slightly faster than the population in Montgomery County.  This is a generally affluent population:

• Median household income in the PMA was $87,500, while the comparable figure for Montgomery County was $72,138. 
• Median value of housing was estimated at $239,600, 13% higher than the County figure ($212,200).   
• Nearly three-fourths of the employed population hold white-collar jobs.

Poolesville itself has very low traffic volume on its major roads, Elgin Avenue and Fisher Avenue, although volumes have been increasing.  The Town is not a major tourism destination yet it has a significant range of important historic and recreational attractions and is located within a 1.5 hour drive of a metro population over 5 million.  

Since Poolesville is strong in household income and growing in population, there are opportunities for specific types of retail development.  The restaurant business is the most promising.  Some specialty stores have potential.  However, overall there is an excess of retail space in relation to need. 

There is also some opportunity for non-retail commercial uses, particularly as the population continues to grow.  Business services offer the best prospects, including professional services like appraising, auctioneering, fundraising, interior decorating and design, sign painting and lettering and translation service. 

Our recommendations fall under two general headings.

·        Marketing

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  • Promote retail and business service opportunities.
  • Create a marketing program and appropriate materials.
  • Expand tourism and recreational travel marketing.

·        Town Development

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  • Diversify opportunities so that residents can stay in the community as their life styles change.
  • Create business space.
  • Make physical improvements in the core area.
  • Create a central place.

Finally, we recommend that the Town take a long view on commercial development. As the region grows and Poolesville remains rural, its value as a close-in getaway can only increase for those dwelling in ever denser urban locations.  The opportunities for development and redevelopment will be excellent over the next decade or two.

1.0        Introduction

1.1          Purpose

This report addresses commercial development opportunities in the Town of Poolesville, Maryland. 

1.2          Location

The Town is located in the northwest part of Montgomery County near the Potomac River, 15 miles northwest of Rockville, the County seat, 9 miles west of Gaithersburg and 17 miles south of Frederick.  It is situated in a rural, agricultural part of the County and in the middle of a market area that extends 10-15 minutes from its center.

1.3          Research

In preparing this analysis we undertook the following research:

• Reviewed the Town Master Plan (adopted Feb. 22, 2005) and other relevant documents. 
• Obtained current demographic data on the Town and market area.
• Interviewed community and business leaders on issues and opportunities.
• Interviewed real estate brokers and developers familiar with the Town and the market area.

1.4 Organization of This Report

The following sections of this report address different aspects of the issue of commercial development:

• Section 2 presents information about population, traffic and tourism in the market area.
• Section 3 describes market conditions and opportunities in the Town.
• Section 4 presents recommendations on development opportunities.
• The Appendix provides detailed information on demographics and retail sales that the Town may use to package specific opportunities.

2.  Market Area Background and Demographics

2.1 Demographics and Economics

2.1.1 Overview:  Market Area Background

We define a market area as a place in which people shop for goods and services.  Many physical and cultural factors determine the shape of a market area:  roads and travel times, terrain and other geographic features, political and institutional associations (e.g., school districts) and other features.  Market area boundaries change over time and market areas often overlap.  The extent of a market area varies by the specific product or service as the distance that people will travel varies depending on their need.

Note that Poolesville is in the middle of a rural area in which residents are accustomed to driving some distance to shop, and the average drive time to work is almost 40 minutes (Exhibit A-1).

Since many retailers, brokers and developers use distances rather than drive time as a basis for comparing locations in terms of population and buying power, we have included the full data set on distances as well as drive time (Appendix) in order to facilitate comparisons. 

2.1.2 Demographics

The demographic information that follows provides a framework for evaluating shopping patterns and commercial development potentials.  In addition to the summary information below, Appendix A provides the complete set of data by both drive time and distance.  This information establishes the basis for estimates of development potential later in this analysis.

The population in the PMA, 8,844 in 2000, is estimated to have increased to 9,815 in 2006.  Over the next five years, this population is projected to grow by 8.1%, to 10,608.  In contrast, the population in Montgomery County grew by 7.1% from 2000 to 2006 and is expected to grow by 5.3% over the next five years.

The Town of Poolesville is limited in its growth potential.  The Poolesville Master Plan

states that the population could grow up to 6,500 in the foreseeable future.

The median household income in the PMA was estimated to be $87,500 in 2000, while the comparable figure for Montgomery County was $72,138. 

The income data suggest an important fact about the market area. Approximately 40.9% of the households in the PMA had incomes greater than $100,000. 

The average household income in the area is projected to increase 11.7% over the next five years; the County projection is for an 11.0% increase.

Figure 2-2 shows that the highest incomes are most heavily represented in the northwest portion of the defined market area; this is also the fastest growing part of the area, and probably the weakest in terms of connection to commercial activity in Poolesville. However, this area is easily accessible to the center of Poolesville and travel time is not prohibitive.

Of this area's year 2000 estimated PMA population:

• 90% are white, 6% are black or African American and 1.7% is Asian.

The estimated Hispanic or Latino population is 2.9% of the total, while the County figure is 13.6%, slightly lower than the national estimate (14.5%).

Currently, it is estimated that 18% of the population age 25 and over in the PMA had earned a Master's, Professional, or Doctorate Degree and 26.4% had earned a Bachelor's Degree.  By comparison, in the US population over age 25, 8.9% had earned and advanced degree, while 15.7% had earned a Bachelor's Degree.

A majority of the dwellings in the PMA (86%) are owner-occupied, single-family detached homes.  The largest proportion (34.4%) was built in 1970’s. 

The median value of housing was estimated at $239,600, 12.9% higher than the County figure ($212,200).   

For the PMA, 73.6% of population is estimated to be employed and age 16 and over. The occupational classifications are as follows:

• 12.6% are blue collar workers, 73.6% are white collar, and 13.8% are service and farm workers.

By occupational categories:

• 23.4% are in "Management, Business, and Financial Operations", 28.8% are in "Professional and Related Occupations", 12% are in "Service", and 22.3% are in "Sales and Office".    7.9% are in "Construction, Extraction, and Maintenance", and 4.6% are in "Production, Transportation, and Material Moving". 

In summary the primary market area population is growing faster than the County population.  Household income is higher and increasing at a faster rate in this area than in the County and in the US as a whole.

2.2 Traffic

Traffic flow patterns and trends are important in evaluating commercial development potentials.  Here we look at average daily traffic over the period 1996-2006 using State DOT data.  Exhibit 2-4 describes the traffic in and around Poolesville (Figure 2-3 shows traffic count locations).

The principal conclusions that one can draw on traffic patterns are the following:

• Poolesville itself has very low traffic volume (under 7,500 vehicles per day) on both of the two major roads, White’s Ferry (Fisher Avenue) and Bealesville Road (Elgin Avenue), although volumes on these thoroughfares have been increasing.

• The Darnestown Road (Route 28) corridor is the most heavily traveled road in the study area, and the heaviest traffic is in the southeast sector, around Darnestown.  This corridor becomes more rural as one travels northwest from Germantown.

• Traffic falls off significantly as one travels northwest on Route 28.  The City of Frederick 18 miles north of Poolesville is a far weaker draw than Germantown for traffic coming through this area.

• In general there has been increasing traffic throughout the area except to the south and southwest of Poolesville where there is little land suitable and no infrastructure to support development.
  
  
• Germantown to the east and Gaithersburg to the northeast are the major centers, just outside the area shown in Figure 2-3.  The I-270 corridor (not shown) is one of the most heavily traveled roads in the state, with 172,000 vehicles daily at a Germantown interchange in 2005).

Figure 2-2 shows locations of estimated traffic, for the places summarized in Exhibit 2-4.

One other important piece of the transportation system in the area is the privately-owned ferry that crosses the Potomac River at White’s Ferry, just three miles east of the intersection of Elgin and Fisher Avenues.  This is the last of the ferries on the River.  It runs continuously, year-round, from 5 a.m. to 11 p.m.; cost is $4 one-way or $6 round-trip.  According to the Washington Post it handles about 600 cars per day.  In addition to commuters the ferry attracts tourists who may be visiting rural attractions in Maryland and Virginia.

2.3 Tourism

While Poolesville is not a major tourism destination it has a significant range of important features and attractions: 

• A variety of historic sites open to the public includes the John Poole House (1793), the Old Town Hall (1908), the Warren Historic Site and the Seneca School House.  The Monocacy Chapel (1747) and Confederate Cemetery is in Bealesville just north of Poolesville.  The Historic Medley District estimates annual visitation at the Poole House at 1,500, a figure that has been steady in recent years. It reports that most visitors are couples and small groups including seniors from retirement homes.  They report that some visitors “will go out to eat at Bassetts afterwards.”
• Access to the Potomac River and fishing and boating opportunities are excellent from several locations.  Dickerson Conservation Park occupies a large stretch of the River in the northwest of the Town. Seneca Creek State Park, to the south, is an historic district and the site of several locks, a dam and an aqueduct.  The full length of the River is part of the C&O Canal National Park, which stretches 184.5 miles from Georgetown, Washington, D.C. to Cumberland, Maryland.  Whites Ferry is the last ferry service still operating on the Potomac.  Nearby is White’s Ford where J.E.B. Stuart’s cavalry crossed the River during the Civil War.
• Sugarloaf Mountain Park and Stronghold is a national landmark that attracts approximately 250,000 visitors yearly.  The site, located about ten miles north of Poolesville, served as a lookout point during the Civil War.
• The equestrian culture and heritage are evident in large farms and riding trails in and around the Town. The Woodstock Equestrian Park is located just three miles north of Poolesville.  The Arabian Horse Museum is in Bealesville, a few miles north on Route 109.  The scenic highways and rolling terrain also attract cyclists from all over the region.

Most important, while residents perceive it as rural and somewhat remote, Poolesville is actually quite accessible (within a 1.5 hour drive) to a metro population that surpassed 5 million in 2007. 

In general Poolesville offers a very diverse collection of attractions that seem to have very little noticeable impact on the Town’s economy.

2.4 Conclusions

The Poolesville market area has a population estimated at 9,815 in 2006.  Over the next five years, it is projected to grow by 8.1%, to 10,608, slightly faster than the population in Montgomery County.  This is a generally affluent population:

• The median household income in the PMA was estimated to be $87,500, while the comparable figure for Montgomery County was $72,138. 

• The median value of housing in this area was estimated at $239,600, 13% higher than the County figure ($212,200).   

• Nearly three-fourths of the employed population is in white collar jobs.

Poolesville itself has very low traffic volume on both of the two major roads, Elgin Avenue and Fisher Avenue, although volumes on these thoroughfares have been increasing.  The Town is not a major tourism destination yet it has a significant range of important historic and recreational attractions and is located within a 1.5 hour drive of a metro population over 5 million.  

4. Recommendations

There are commercial development opportunities in Poolesville, in spite of the relatively large amount of space that is already there.  Our findings and recommendations fall under two general headings.

4.1  Marketing

The best retail prospects are specialty stores and restaurants.  A furniture store could feature historic lines of specialty home items and antiques that reflect Poolesville’s heritage (Civil War, canal history, etc.).  A clothing or accessory store could compete in a specific line such as biking, horseback riding or other sports clothing.  There is a limited opportunity in the broad category of office supplies, stationary and gift stores with the right mix of goods and services that address different business and personal needs. The best prospect is in the restaurant category in which there is an opportunity for two more restaurants, one full-service and one limited-service.

The strongest business prospects are professional businesses that serve the metro area population or that support an important urban function but are less location sensitive and are scalable from home to a small office or office/flex situation.  That is they can grow fairly quickly from a staff of 1 up to 5 or 10.  The business is often the work of an individual who values flexibility and a family-oriented lifestyle over the “downtown” business environment and wants to spend workdays close to a suburban home. This type of business is one of the fastest growing subsectors of the fast-growing service sector and includes a variety of potential targets: appraising, auctioneering service, fundraising, interior decorating and design, sign painting and lettering and translation service. 

As part of this effort the Town may turn the information in this report into a marketing brochure.  It would then:

• Identify restaurant operators and brokers in desired categories and send it to them.
• Organize a retail merchants association to hold more events and lead other marketing activities, although we recognize the there is just a small group of merchants and it may be best that the existing Chamber of Commerce take the lead.
• Create a Poolesville “brand” in the DC metro area that makes Poolesville a go-to getaway place for a rural day trip.

There is very little outward sign of business activity related to tourism and recreation.  While Poolesville is not a major tourism destination it has a significant range of important features and attractions:  access to the river and good fishing, large farms and preserved land, a golf course, rolling terrain suitable for bike riding, historic sites open to the public and a national landmark mountain nearby.  Most important, while perceived to be rural and remote, it is actually quite accessible (within a 1.5 hour drive) to a metro population that surpassed 5 million in 2007.  However, there is little indication that local businesses are reaching out to this tourism and recreational traffic, by means of signage, special promotions or other efforts.  The recent creation of a brochure, “Montgomery County Rural Heritage Byway Tour,” is an important step. The Town should identify opportunities to market itself even more extensively in this target niche.

4.2 Town Development

• Promote in-town living:  create opportunities for singles and small families to live in apartments above stores and in granny flats.
• Create more opportunities for small businesses in town through incubator space or special working arrangements.

There are just a few places where one could locate a new business in Poolesville.  There may be some renovation opportunities in older structures near the center of Town (e.g., the old Town Hall).  There are also vacancies in the retail centers on Fisher Avenue east of Elgin Avenue.

One idea is that the Town takes over the former CVS space in the shopping center and creates an incubator for small businesses.  It could offer incentives for small and growing businesses to move from home to this commercial location.  It does seem unlikely that the Town would want to be in the position of managing commercial space, but there may be alternatives under which it could arrange to work with the owner to manage the space.

Physical changes coming out of the town planning effort should include the following:

• Make things seem to be closer together: the greatest deficiency from a retail perspective is the lack of a central place.  This is followed closely by the lack of historic feeling or connection in any recent development.
• Create strong biking and pedestrian connections, with walkways, signage and pedestrian connections.
• Expand the use of Whalen Commons, the open recreation area in the center of Town, for community events such as the holiday lighting ceremony, summer concerts and movies.

The Town has, after much deliberation, reached a decision to build a new Town Hall on property on the north side of Fisher Avenue that it purchased for this purpose.  Bidders have been requested to prepare proposals as this report is being prepared.  If for some reason this plan does not go ahead, the Town should reconsider its alternatives.

• Purchase the shopping center in which Town Hall is presently located, and expand town use into the former CVS space.
• Work with the County to relocate the library into this complex.
• Redesign the façade and exterior so that it reflects the public use.  Create a good coffee shop/meeting space at the front where residents, bikers, antiquers and tourists and congregate at the town’s “front door.”
• Create a community center as space becomes available.

4.3 Conclusion

Poolesville grew as an “agricultural service center” before the Civil War.  Businesses in the Town then included a tinsmith, several livery stables, a barber shop, general store, two taverns, a hotel, a carpenter and a blacksmith shop (Poolesville, Raymond L. Hoewing, 2003).  As the region grows and Poolesville remains rural, the value of the Town as a close-in getaway can only increase.  So, in the next 10-20 years, the B&B’s, restaurants, spas, bike trails and specialty shops will become much more attractive to those dwelling in ever denser urban locations. If possible the Town should take a long view on commercial development with the understanding that there will be excellent opportunities for development and redevelopment over the next decade or two.