A chunk of state grant funding originally slated for Frederick’s proposed downtown hotel and conference center is going back to the agency it came from after a deadline passed to spend it.
In April 2014, the city announced that it was set to receive a $350,000 Smart Growth Impact Fund program award as part of the state’s PlanMaryland strategy to accelerate economic revitalization through coordinated investment of public resources and private investment. The Department of Housing and Community Development administers the grants and the city has received several for the hotel project.
The grant was for land acquisition and development of the project and city officials had a set amount of time to spend it. Richard Griffin, the city’s director of economic development, said Thursday the deadline has passed to spend the money and that it is no longer part of the project budget.
“We never received any of those dollars,” he said. “It was [an] FY 2014 grant. If you don’t spend it by a certain time you lose it, and the deadline has passed.”
Griffin added that developing the project has taken longer than officials originally planned and officials are moving on without that money in the budget.
“In our budgeting we anticipated the fact that this grant was coming to an end,” he said. “We made adjustments to address that. ... The process is taking a little longer than expected.”
The smart growth program provides grants and loans to local governments and nonprofit community development organizations working in conjunction with private entities to fund capital costs for redevelopment opportunities.
In January 2016, the city received an additional $500,000 from the department’s Smart Growth Impact Fund for the project.
The most recent one-page flier about the project indicates the city planned to steer an estimated $850,000 from the Department of Housing and Community Development to the project.
Sara C. Luell, director of communications for the Department of Housing and Community Development, said the city’s grant agreement expired June 30.
The department decided not to extend the city’s deadline after reviewing the large demand for smart growth funds by programs that could use the money right away.
"You can't expect to keep that stuff forever," Griffin said. "There are plenty of other counties in the state who have needs for that money."
He added that the city is not set to lose any other grant funds for this project in the near future.
The city has received an extension on the deadline for the $500,000 until the end of this fiscal year, June 30, 2018, Luell said.
Developers Plamondon Hospitality Partners are still working with city, county and state partners to develop a multimillion-dollar four-story, 180-room hotel and 20,000-square-foot conference center at 200-212 E. Patrick St. The plans include improved access from East Patrick Street, complete rehabilitation of the former Frederick News-Post building and demolition of the historic Birely Tannery building at the rear of the property.
Designers and architects revealed the project design in May and are working with the city’s Historic Preservation Commission to determine how to best preserve the historic elements of the site. Commissioners held a workshop Thursday and are set to hold another next week on the project plans and request to demolish the tannery building. They anticipate a vote sometime in the weeks after on whether to approve the demolition request.