MCPS Responds on the Gaithersburg Warehouse Lease

Montgomery County Public Schools says it has renegotiated its Gaithersburg warehouse lease from ten years down to two, a change the school system had not previously announced.

MCPS made the statement in a comment on our Facebook page, responding to a post we shared from the Parents’ Coalition of Montgomery County, which published the lease this week and asked whether the school system was still paying roughly $246,000 a month for a building it cannot use.

The school system’s full statement appears below, unedited.

How the warehouse got here

In October 2025, the Board of Education approved a ten-year lease for about 161,500 square feet at 750 Progress Way in Gaithersburg, intended to replace aging storage space and consolidate several departments. Montgomery Community Media reported the lease at $245,614.58 a month, or roughly $29.5 million over the term.

MCPS also asked the County Council for $13.1 million in capital funding to renovate the building so it could be used. The Council did not provide it. Bethesda Today reported in June that MCPS would “evaluate options,” with a spokesperson saying the school system was “extremely disappointed and frustrated that funds were ultimately not provided to fulfill this lease agreement.”

Rent on the building began July 1, 2026.

What the lease says about walking away

MCPS says in its statement that breaking the lease “would have resulted in substantial financial penalties.” The lease supports that.

The copy published by the Parents’ Coalition, obtained through a Maryland Public Information Act request, contains an article titled “Annual Appropriations (Termination Option).” It lets the school system end the lease early if funding falls through, but only on conditions, and only for a price: an early termination fee equal to seven monthly rent payments, due in a single lump sum, on top of rent owed through the exit date.

The clause is also narrower than it first appears. It is triggered by a shortfall in the money appropriated for the lease itself. What the Council declined to fund was the separate capital request to renovate the building. The lease’s rent schedule is redacted in the published copy.

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MCPS’s full statement

The following is the complete text of the comment posted by the MCPS official account on our Facebook page. It is reproduced in full and unedited.

Let’s set the record straight.

The Montgomery County Parents Coalition’s post about MCPS warehouse lease misrepresents the current situation.

Here are the facts:

The County Council eliminated funding for the full renovation and buildout of a centralized MCPS warehouse. However, the lease obligations remained.

Breaking the lease would have resulted in substantial financial penalties, and still left MCPS without the warehouse space it urgently needs.

Rather than pay penalties and receive nothing in return, MCPS negotiated a revised two-year lease that reduces renovation costs, stays within available funding and provides usable, modern warehouse space.

MCPS is making all appropriate payments.

MCPS also uses other leased facilities and Board-owned properties because its existing warehouse is outdated, undersized and insufficient to meet the school system’s needs. We need space for a variety of operational needs and this warehouse serves part of that need.

We want to recognize and thank the property owner for working collaboratively with MCPS to find a solution. When funding circumstances changed, the owner demonstrated flexibility, good faith and a willingness to renegotiate an existing agreement. That partnership helped us avoid substantial financial penalties, reduce costs and secure space our schools need. We genuinely appreciate the owner’s commitment to reaching a practical, mutually beneficial outcome that ultimately serves Montgomery County taxpayers.

The bottom line: MCPS faced a difficult situation when funding was eliminated after lease commitments had been made. Rather than walk away at substantial taxpayer expense, we worked with a cooperative property owner to make the best of a challenging situation.

That’s the full story.

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The property owner MCPS thanks is listed in the lease as MFV 700 NFA, LLC and DNIP4 700 NFA, LLC, two Maryland limited liability companies. The landlord’s broker is Matan Companies, LLLP.

MCPS has not released the terms of the revised two-year lease, including its rent or the reduced renovation cost. We will report them when they become available.

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