Subject
title
Adoption of a Resolution to Approve the allocation of 143 multifamily dwelling units to the existing Sheraton Hotel at 920 King Farm Boulevard, including the density shift of 16 units, to the Irvington Center office designated area within the King Farm Planned Development.
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Department
CPDS - Development Review
Recommendation
Staff recommends that the Mayor and Council adopt the proposed Resolution, which authorizes the allocation of 143 multifamily dwelling units within the Irvington Centre office area of the King Farm Planned Development.
Discussion
Refer to the September 9, 2026, Public Hearing Staff Report for background, project request, and findings.
Impact Statements
Equity
The proposed project will provide 143 new dwelling units to King Farm, which will be priced at or below market rate. In accordance with the city’s MPDU requirements, the project will yield approximately 22 units below market rate. The applicant has indicated the project may exceed the 15% minimum MPDU units. The exact specifications of these units will be determined at the time of site plan approval. The creation of these net new affordable units will enable a wider breadth of individuals and families to call Rockville home, despite their income. As such, this project is projected to have a positive impact on equity.
Environment
Adopting the proposed resolution is not expected to impact the environment. The proposed project seeks to adaptively reuse an existing structure from a hotel to an apartment building of 143 dwelling units. Due to the nature of an adaptive reuse project, impact on the environment is minimal. Nothing within the Climate Action Plan either supports or discourages projects such as this.
Economy
The proposed action has an uncertain impact on the city’s economy. This determination is based on the following economic indicators. Staff acknowledges many of these indicators are bound to be impacted by the proposal, but the extent to which the impact is positive or negative is largely unknown.
Workforce: The conversion of the hotel into apartment units will likely reduce the workforce and number of permanent jobs associated with the property. While a small number of hotel units are proposed to remain, the staff associated with that component of the structure is almost certainly less than the staff required to operate the hotel at its existing 155 room capacity. That said, temporary jobs will be created throughout the conversion/renovation process, and some permanent jobs are likely to be created through management of the apartment building. At this point staff do not have enough information to determine if the conversion will be a net increase or net decrease in jobs.
Property Values: Staff anticipate the conversion of this property from commercial to residential will impact property values and associated real property tax assessment. It is not known if the change will result in a higher or lower assessment and therefore how the change will impact Rockville’s tax revenue.
Taxation: With the proposed change of use, tax revenues to the city stemming from the parcel will be altered. City revenues from hotel taxes are likely to diminish with the removal of 143 hotel units; however, the city will be collecting income tax from the residents who will be occupying the building. Without a more robust financial analysis, the net impact of taxes stemming from this proposal is to be determined.
Private Sector Capital Investment: In order for the conversion to take place, significant investment will need to be made into the existing structure prior to occupancy of the building.
Economic Development: The proposed conversion is likely to have a positive impact on economic development in the city. With an average household size in the city of 2.53, the creation of 143 housing units is anticipated to yield ~361 Rockville residents. These are individuals that will likely shop, do business and contribute to the local economy as a part of their daily life. While hotel visitors do contribute to the local economy, full-time residents have a much greater economic impact.
Public Notification and Engagement
Notifications of the request have been made consistent with City Code requirements. The Affidavit of Public Notice is included as the “Affidavit of Public Notice” attachment.
Boards and Commissions Review
Refer to the September 9, 2026, Public Hearing Staff Report for the request for a summary of the Planning Commission’s review.
Next Steps
If the application is approved, the applicant must seek approval of either a Change of Use or Level 1 Site Plan Application depending on the scope of the project.