“I was curious about how the city was looking to proceed in the area of economic development,” said Knapp after the meeting. “In particular, I was curious to see what the city was thinking regarding strategy for life sciences and technology development.”

Knapp announced in June that he is not seeking reelection to a third term on the Montgomery County Council. When his term ends this year, Knapp, a biotechnology consultant and former business development executive at Celera, plans to work with the region’s leading biotechnology firms, academic and research institutions, and the finance sector to develop strategies to increase life science activities in the community.

The Gaithersburg work session is the first meeting focused on economic development since city leaders designated $2 million for the top priority in the 2011 fiscal year budget. The city’s strategy is still unfolding but includes a new city staff position focused on economic development and an increased web presence.

Other ideas for spending the economic development fund include marketing and promotion, prospecting and incentives.

“I think it is important for the city and county to leverage each others’ efforts and strategies in life sciences and technology development,” said Knapp.

At the July 12 meeting, the city’s economic development update followed a lengthy discussion about the merits of expanding the city’s Enterprise Zone in Olde Towne.

“I think the concept of expanding the Enterprise Zone is worth considering,” said Knapp. “I believe there are two issues,” he said. “Incenting development within underutilized areas in the city and increasing economic competitiveness for the city within the county. I think each has merit and was very interested in the points raised by the Council members.”

At press time, the Council was split on the subject with Council member Henry Marraffa leading the charge for expansion and Council member Cathy Drzyzgula questioning the possible adverse effect on the current core. Several people testified on behalf of trying to expand the zone, including two developers and a resident. Deputy City Manager Tony Tomasello said staff did not have a formal position on the topic.

“Staff did not come in with a recommendation because we felt that both sides had merit — doing everything reasonably possible to facilitate development in Olde Towne versus focusing incentives on the core of the area,” Tomasello said. “In the end, the Council discussions really mirrored our own.”

The enterprise zone is a local program established by the Maryland General Assembly that provides state and local tax incentives such as real property tax credits, income tax credits and enhanced job creation tax credits to eligible businesses within the zone.

Tomasello said the city needs to decide soon if it will pursue expansion of the zone because of timing issues with the state. He said a formal application must be submitted by October 15, and the expansion request requires prior approval per resolution of both the city and county councils.

A joint work session on economic development and the city’s enterprise zone is scheduled for July 12 at City Hall.

Deputy City Manager Tony Tomasello said the enterprise zone discussion will focus on the status of current projects and prospects for expansion in Olde Towne. He said the economic development work session will focus on expanding the city’s tool box and improving the city’s economic development web presence, etc. He is also expected to discuss expanding the city’s contract with CoStar so officials can be alerted to office leases that may be expiring in the city limits, etc. At press time, Tomasello said the office vacancy rate was somewhere between 12 and 13 percent, which he said is lower than it has been recently but higher than it had been when the rate hovered near 5 or 6 percent.

Although he is not predicting a big turnout, he said, local merchants should attend this meeting because decisions will be made that affect the city’s business community.

“Traditionally, the business community is fairly silent on policy issues,” Tomasello said.

Kentlands Downtown Partnership (KDP) President Paula Ross will be there, and she encourages other business owners to attend. Ross wants some of the money in this year’s economic development fund to be earmarked for implementing Kentlands charrette initiatives.

“There is a $2 million fund … without any parameters on it. We need to hold them accountable to spend that money wisely and not to forget about the charrette here that they spent a quarter of a million [dollars] to conduct but next to nothing so far in implementation,” Ross said. “Some of the $2 million fund needs to address the charrette and marketing all commercial districts in the city, including ours, and some needs to address the city’s larger need for a real economic development authority.”

The July 12 work session begins at 7:30 p.m. in the Council chambers at Gaithersburg City Hall. Look for background information for the discussion to be uploaded on the city’s website at www.gaithersburgmd.gov.