Independent Market Analysis on Lakeforest Mall Redevelopment Has Been Released

Earlier this month, WRS, Inc. submitted its Schematic Development Plan application SDP-9736-2024 proposing to redevelop the existing Lakeforest Mall property with 1,600 residential units, 750,000 square feet of employment uses, 250,000 square feet of large format retail, and 220,000 square feet of commercial uses. WRS hired real estate consultant RCLCO to conduct an independent market analysis, which was released this past week.

According to RCLCO, “To inform the strategy for redevelopment at the subject site, WRS engaged RCLCO to conduct an independent market analysis, which RCLCO completed in August 2022 and updated in January 2024. As part of that exercise, RCLCO identified a supportable program and phasing strategy, based on an analysis of supply and demand in the market.

Following the completion of the market analysis, WRS engaged RCLCO to conduct a fiscal and economic impact analysis on the supportable program, with the goal of demonstrating the impacts that the redevelopment of the subject site would have on the City of Gaithersburg and surrounding community. Specifically, this analysis is intended to respond to the following key questions:

What tax revenues will the subject site generate to the City of Gaithersburg through redevelopment, and what expenditures will be necessary for the City to serve it? What will be the resulting net fiscal impact to the City of Gaithersburg?

In addition to this net fiscal impact, what other economic impacts will the subject site yield to the City of Gaithersburg and broader Montgomery County?

To answer this question, RCLCO used the IMPLAN model that many public agencies employ to estimate the economic impacts of new investment. In the model, impacts are broken down as “direct” (e.g., construction investment, household spending at buildout, retail sales at buildout, etc.) and “indirect / induced” (i.e., the circulation of these direct effects within the local economy).

For the purpose of this analysis, RCLCO examined the fiscal and economic impact of the most recent development plans for the subject site, which closely align with the supportable program and phasing strategy that RCLCO identified as part of its updated market analysis.” The full analysis can be seen here.