Interim Meeting #2 CUMBERLAND ECONOMIC DEVELOPMENT STRATEGY

1. Interim Meeting #2CUMBERLANDECONOMIC DEVELOPMENT STRATEGY August 5, 2014 Presented By: Kyle Talente, Vice President and Principal Lauren Callaghan, Market Analyst/Planner RKG Associates, Inc.

2. Work Completed To Date • Kickoff meeting and first round of stakeholder interviews • Review of background materials • Demographic conditions and trends • Economic conditions and trends • Preliminary quality of life metrics • Preliminary strengths, challenges, issues and opportunities • Preliminary project goals • Interim Meeting #1 • Real Estate Market Analysis • Target Industry Analysis

3. Goals • To create jobs that pay above median income for Allegany County • To add wealth that grows the middle class • To create new image for Cumberland that can be marketed • To encourage entrepreneurship and small business development • To define a tangible, multi-year plan that can garner support • To identify a strategic approach to addressing blight and redevelopment • To reverse negative attitude in community • To educate decision makers and community stakeholders on the purpose and value of economic development • To create a business case for moving past the “the way it was” mentality • Continued development and growth of the Arts and Tourism

4. Real Estate Market AnalysisDevelopment Profile/Trends

9. Development Trends • Majority of development occurred prior to 2005 • 689 of 703 properties • 14 non-residential properties developed since 2005 • Properties scattered throughout Cumberland – no concentrations of development • Most properties are Retail/Service or Office • Majority are along one of the Allegany County Trails System and well-traveled roads • Notable Non-Residential Development: • Western Maryland Health Systems Hospital (2009) • Fairfield Inn & Suites (2009) • CareFirst Blue Cross Blue Shield (2011) • Pattern suggests development is seeking available properties

10. Implications • Retail development steadily been developed outside of Downtown • Land available for development • Proximity/access to well traveled roads • Close to I-68 • Limited available land for green-field development • Places emphasis on infill and redevelopment • Economics More challenging • Focus needs to be flexibility (form based code?) • Recent development has been institutional or corporate • Market conditions risky for smaller developers to invest • Over speculation in building investment stalled market • Challenge until market conditions return to pre-downturn levels • Strategic investment paramount

11. Real Estate Market AnalysisNon-Residential Assets

13. Cumberland Job Inflow/Outflow, 2011

14. Allegany County Job Inflow/Outflow, 2011

18. Non-Residential Broker Interviews • What we have heard thus far: • The non-residential market has seen little activity since the 2008 Recession. • There is no single type of non-residential property that is strong in the Cumberland market. • Recent inquiries about properties Downtown and near the GAP Trail indicate an increase in interest in Cumberland by visitors/potential investors. • Regional/National chains are willing to invest near Cumberland, but only if market criteria is met. • Adding demand for goods and services generated by tourists to local demand may increase Cumberland’s attractiveness for some retailers and service providers.

19. Implications • Cumberland’s non-residential market has not recovered yet • Properties are available for lease and sale but current supply is exceeding demand (particularly for retail/service property) • Much of this supply is concentrated within the Central Business District and along Virginia Avenue in South Cumberland • If buyers/investors become more seriously interested in Cumberland, there is a supply of available properties that are well-located within the Central Business District and along major thoroughfares. • A better understanding of the Cumberland market and what type of retail and services it can support is needed.

20. Target Industry Analysis

21. Target Industry Methodology • Is it a local specialization? • Is it adding jobs locally? • Is it gaining a competitive share relative to the nation? • Does it capitalize on Cumberland’s strengths? • Is it consistent with the goals of the community?

22. Target Industry Methodology [1] Performance Classification Codes: SP = Strong Performer; LP = Lagging Performer; CP = Constrained Performer; PP = Poor Performer [2] Target Potential Codes: CS = Current Strength; HP RT = Higher Priority Retention Target; LP RT = Lower Priority Retention Target; ES = Emerging Strength; PL = Prospects Limited

23. Statewide Competitive Assets • Financial Assets & Income • Income Poverty Rate (3rd) • Bankruptcy Rate (9th) • Businesses & Jobs • Low Wage Jobs (14th) • Employers Offering Health Insurance (6th) • Retirement Plan Participation (5th) • Housing • High Cost Mortgage Loans (3rd) • Healthcare • Uninsured Rate (12th) • Education • Two-Year Degree (8th) • Four-Year Degree (5th) • 8th Grade Reading Proficiency (6th) Rankings part of 2014 Development Report Card for the States by the Corporation for Enterprise Development

24. Statewide Competitive Constraints • Financial Assets & Income • Average Credit Card Debt (45th) • Borrowers over 90 Days Overdue (42nd) • Businesses & Jobs • Small business ownership rate (44th) • Private Loans to Small Businesses (41st) • Business Ownership by Race (46th) • Business Ownership by Gender (43rd) • Housing • Foreclosure Rate (43rd) • Healthcare • Uninsured Rate by Race (45th) • Uninsured Rate by Gender (40nd) • Education • None Rankings part of 2014 Development Report Card for the States by the Corporation for Enterprise Development

25. Site Selection Criteria • Cumberland Specializations • Labor costs (3rd) • Training programs (23rd) • Proximity of technical university (22nd) • Housing costs (3rd) • Ratings of Public Schools (4th) • Recreational opportunities (6th) • Cumberland Strengths • Highway accessibility (2nd) • Proximity to Major Markets (15th) • Railroad Service (25th) • Healthcare facilities (2nd) • Climate (7th) Rankings part of 2013 Area Development Corporate Survey by Area Development Magazine

26. Site Selection Criteria • Cumberland Weaknesses • Availability of skilled labor (1st) • Highway accessibility (2nd) • Occupancy or construction costs (4th) • Corporate tax rate (7th) • Tax exemptions (11th) • Availability of land (13th) • Cumberland Opportunities • Availability of advanced ICT services (5th) • Availability of buildings (6th) • State and local incentives (8th) • Availability of Long-Term Financing (16th) Rankings part of 2013 Area Development Corporate Survey by Area Development Magazine

27. Site Selection Asset: Higher Education • Degree programs applicable to local industries/small business • Accounting • Advanced Manufacturing • Business Administration • Biotechnology • Chemistry • Culinary Arts • Cyber Security/Secure Computing • Economics • Engineering • Information Technology • Mass Communications • Multimedia Technology • Nanotechnology • Non-credit continuing education courses • Small Business Center (ACM)

28. Site Selection Asset: Recreation, Culture & Tourism • Historic points of interest • Natural recreational resources • Entertainment destinations

29. Target Industry Methodology Industry Strength (Location Quotient)

30. Target Industry Methodology Industry Strength (Location Quotient)

31. Employment Trends

32. Employment Trends

33. Target Industry Clusters • Administrative and Support Services • Data Processing, Hosting and Related Services • Inbound and Outbound Telemarketing • Direct Mail Advertising • Translation and Transcription Services • Process, Physical Distribution and Logistics Consulting Services • Financial Transaction Hosting and Processing • Internet and Virtual Services • Software Publishing • Motion Picture and Video Processing • Telecommunication Support Services • Internet Publishing • Cyber Security Services

34. Target Industry Clusters • Healthcare and Social Assistance • Healthcare • Specialty Hospitals/Hospital Services • Outpatient Care Centers • Offices of Physicians • Offices of Dentists • Offices of Other Health Practitioners • Social Assistance • Home Health Care Services • Child Day Care Services • Community Care Facilities for the Elderly • Research and Support Facilities • Medical and Diagnostic Laboratories • Diagnostic Imaging Centers

35. Target Industry Clusters • Technical, Research, and Consulting Operations • Professional Services • Management, Scientific, and Technical Consulting Services • Architectural, Engineering, and Related Services • Advertising and Related Services • Legal Support and Research Services • Accounting, Tax Preparation, Bookkeeping and Payroll Services • Technical Research and Modeling • Computer Systems Design and Related Services • Scientific Research and Development Services • Agriculture and Biological Research/Consulting Services • Other Professional, Scientific, and Technical Services

36. Target Industry Clusters • Entertainment and Recreation • Complementary Sports/Exercise Venues And Events • Conducting Scenic and Sightseeing Tours • Providing Guide Services • Archeological • Canoeing/Kayaking • Cycling • Hunting./Fishing • Full Service Restaurants • Augment Destination Activities and Events • Night Life/Activity Cluster • Bed & Breakfasts • Camping/Non-Permanent Lodging Venues

37. Small Professional/Service Firms by MSA(Under 20 employees)