Subject
title
Approve and authorize the City Manager to execute The Square at Rockville City Center Memorandum of Understanding (MOU) between the Mayor and Council and Morguard Commercial Retail Owner and Morguard Commercial Residential Owner.
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Department
City Manager's Office (CMO)
Recommendation
Staff recommends that the Mayor and Council approve The Square at Rockville City Center MOU between the Mayor and Council and Morguard Commercial Retail Owner and Morguard Commercial Residential Owner and authorize the City Manager to execute it.
Change in Law or Policy
If approved, the MOU replaces the previously approved Interim Management Agreement.
Discussion
The attached MOU has been developed by both parties as a framework for Morguard and the City of Rockville to work together expeditiously, and in good faith, to help ensure that The Square at Rockville City Center is a vibrant, safe and well-managed neighborhood that offers residents and visitors a healthy, active and environmentally friendly amenities and entertainment.
Key components of the agreement, among others, include:
A. In exchange for the improvements noted in the agreement, the City agrees not to levy a Town Square Commercial District tax or the Street and Area Lighting District tax for a period of five years.
B. The parties agree to work collaboratively on several signage improvements, including new murals, wayfinding, and banners in and around The Square and Rockville Town Center, including signs on the WAMATA pedestrian bridge and CSX railroad bridge.
C. The parties agree to work collaboratively to amend the Parking Garage Lease Agreement and develop a detailed parking garage lease agreement that includes the release of many city-designated spaces, the continued provision of ninety (90) minutes of free public parking, and the potential subleasing of some spaces for private use.
D. The parties agree to install and maintain Wi-Fi services for public use in and around the city plaza.
E. Morguard agrees to install security cameras in and around The Square and provide the Rockville City Police Department with access to the footage.
F. The parties agree to continue providing public events and concerts at the city plaza.
G. Morguard commits to providing the City of Rockville with the use of vacant retail space of sufficient size such that the Department of Recreation and Parks may offer programming.
H. The parties agree that the city may offer leasing incentives to significant retail tenants in The Square, on the condition that those tenants will generate enhanced employment opportunities, sales tax revenue, business multipliers, and space improvements, and that any incentives provided will contain claw-back provisions.
Impact Statements
Equity
The provision of free Wi-Fi at The Square will assist in bridging the digital divide. Residents and members of the public who may not have reliable internet or lack access will be able to use the publicly available Wi-Fi at The Square.
Environment
The MOU has a provision that requires ongoing maintenance of the streetscape and streetscape amenities and critical infrastructure, such as grease traps in The Square. All these contribute positively to the sustainability of the environment.
Economy
The commitment by both parties increases investment in the downtown area, thus promoting business retention and attraction. The potential activation of vacant retail spaces with recreational programs may enhance the economic activities in the area and attract more people to the area who would have otherwise not been able to visit The Square and, as a result, visit the businesses.
Mayor and Council History
This is the first time the Mayor and Council is considering this Memorandum of Understanding (MOU).
Fiscal Impact
Sufficient funding is available in the FY 2026 adopted budget to cover the items listed under Mayor and Council Commitments. However, funding for wayfinding and placemaking described under Signage Improvements will be included in the August 4, 2025, budget amendment. Future budget amendments may be needed for binding agreements for items such as leasing incentives and programming associated with the use of vacant retail space.
Next Steps
Following the approval and execution of the MOU staff will proceed with implementation including the development of future binding agreements as necessary to fulfill the commitments of the agreement.