Regional Ag Center At Risk
Originally Published: August 14, 2024
Commissioners Weigh Options
In 2014, the Southern Maryland Agricultural Development Commission (SMADC) began considering the concept for a Regional Agricultural Center (RAC). A decade later, the St. Mary’s County Commissioners are faced with a decision that could spell success or failure for the venture.
St. Mary’s County won the request for proposal issued by the SMADC to five SOMD counties. As a result, St. Mary’s received $1.5M in grant funds from the SMADC to aid in construction of the RAC, with an overall cost of several million at the time. County owned land adjacent to the New Market transfer station and Lettie Dent Elementary School was identified as the location.
The County Commissioners have attempted to secure funding from other sources, including state and federal funds. Around $423K in grant funds from the American Rescue Plan, passed by Congress in 2021, was allocated for water/sewer connections to the building. In November 2021, the Commissioners allocated approximately $1.6M to cover additional funding needed to complete the $4.7M budget. However, with continued delays the total project cost has ballooned to over $7M for new construction, leaving a significant budget gap. Further complicating the budget is the expiration of grant funds from the SMADC this October.
Undeterred, the SMADC, an arm of the Tri-County Council of Southern Maryland (TCCSMD), pivoted to a plan called “RAC 2.0.” The updated plan centers on cutting costs and time by using the vacant McKay’s grocery store in Charlotte Hall to house the RAC. Potential services include fresh cut produce, processed and packaged foods, meat products, bakery items, processing services, quality control/food safety, storage and distribution, marketing/sales support, educational/community programs, businesses development services, sustainability and environmental services, event hosting and collaboration.
“Shoppers vacated the building after 2 years into a 10 year lease,” according to the plan, and “the owners are motivated by the local aspect [of the project]...and are offering generous tenant improvements.” The location already houses kitchen equipment, display coolers, shelving, and more items that would further reduce costs. The current owner has “committed to replacing the compressors and compressor racks, HVAC system, and propane generator,” saving the project at least $400K. At 50K SF the space is larger than needed, so 25K SF would be subleased by Shaso Consulting, with “potential tenants such as a fitness center or dollar store” discussed.
For this plan to move forward, the St. Mary’s County Commissioners must consider purchasing the building. Part of the original deal was that the TCC would assume a property management role over the RAC. To accomplish that, the old McKay’s must be purchased outright by St. Mary’s County, or in partnership with other SOMD counties, with the ability to designate the TCC as property manager. This requirement is tied to state law, which also obligates St. Mary’s County as the location due to the award of startup funding. Northgate Plaza LLC, owned by Sean Earley, has suggested a purchase price around $6-7M, an amount unlikely to receive Commissioner agreement.
The Commissioners could see the issue on an upcoming August meeting agenda, when they will need to decide on filing an extension for the grant fund expiration. County Administrator David Weiskopf, quoted in an article from American Farm Publications, called the condition of the store “decrepit” and said the $700K per year needed for yearly rent and utility expenses “just seems like a lot of money to me, but we’re happy to hear the proposal in detail.”
Craig Sewell, SMADC Marketing & Livestock Specialist, provided a conservative estimate of expenses in the RAC 2.0 proposal. Across the first three years, $3M is needed to cover operating expenses. Should the RAC 1.0 plan terminate, the SMADC would have $3.5M in funds available to cover the costs.
To date, no other SOMD county (Charles, Calvert, Prince George’s, Anne Arundel) has contributed to the cost of the project. As of January 31st, over $4.8M remained unspent of a total $5.29M included in the St. Mary’s County budget.
The Southern Maryland Shellfish Growers Association and Smuckers Meats have submitted letters of support for RAC 2.0.
