City resident Andy Stout raised some questions recently with Frederick Mayor Michael O’Connor and the Board of Aldermen regarding the land slated for construction of the proposed downtown hotel and conference center. This week, after a second email prompting a response, he received some answers.

On Feb. 15, Stout attended a Board of Aldermen workshop, where he first publicly addressed the elected officials about the 200-212 E. Patrick St. site where developers Plamondon Hospitality Partners are planning construction of a 180-room hotel, 20,000-square-foot conference center, and neighboring retail building and courtyard. He followed up the next day with an email to the mayor, board members and others summarizing his comments and specifically asking four questions about the property.

Plamondon representatives were initially set to purchase the property from an entity owned by the Randall family, which owns the land where the former News-Post headquarters building and historic Birely Tannery building sit, and privately negotiated a price. Through evolution of the hotel project, the real estate deal became public, with the city set to own the land and lease it to Plamondon, prompting the questions from Stout. After nearly a month, Stout sent another email on Tuesday seeking answers to the questions, which he said remained unanswered at the time. The next day, O’Connor provided the answers.

The questions and answers are as follows:

1. How was the price for the hotel property determined?

Answer: The Plamondons have a purchase agreement with the Randall family. That is a private real estate transaction. The current MOU has the city assuming the purchase agreement, with ground rent being paid to the City, which would recover the purchase price over some term. The intent behind the City owning the land is the construction of public parking on the site, which the City owns throughout Frederick. The exact footprint of the parking is not yet known.

2. Why can’t anyone produce an appraisal to justify this purchase price?

Answer: An appraisal is being performed, and has always been anticipated.

3. Why is the hotel real estate being acquired in apparent contradiction to the the city’s own best practices for real estate acquisition?

Answer: Also anticipated through the RFP process was the unique nature of the partnership on the project and the relationship between the City and the hotel developer. As a result, this is not a typical real estate acquisition. Our purchasing rules have been followed.

4. Knowing that the development of the property will have substantial mitigation costs, will the city now go back and renegotiate the purchase price of the property so that the acquisition can be done in accordance with the city’s own best practices?

Answer: We do not know what the mitigation costs will be until a mitigation plan is finalized with MHT, and then that work is priced. It is our intent to have the equitable distribution of those mitigation costs shared between the public and private sectors, but it’s too early to say what that will look like or its impact on other elements of the project.

O’Connor also included the following statement in Wednesday’s email:

“We are currently redrafting the [memorandum of understanding] with the [Plamondons] to account for a number of changes in the structure of the project, but still within the intent of the original [request for proposal]. That revised document will be made public as its adoption requires Board of Aldermen approval. It is however still in active negotiation.

“As this is an active negotiation, there are clearly details that cannot be disclosed until both parties have concurred. At that point the public will have an opportunity to weigh in and the decision will rest with the Aldermen. I can only assure you that my interest is in drafting a document that best protects the interests of the City, while fulfilling the intent to attract a full service hotel and conference facility to downtown. I believe the framework currently being discussed will ensure public dollars support parking and public improvements, while the private investment will support the hotel and conference center and assume that risk.”

Follow Mallory Panuska on Twitter: @MalloryPanuska.

(14) comments

gary4books

This is like a reunion, When the Hotel opens they can all get rooms and party.

"Captain Renault: Major Strasser has been shot... round up the usual suspects."

KellyAlzan

"That is a private real estate transaction. The current MOU has the city assuming the purchase agreement, with ground rent being paid to the City, which would recover the purchase price over some term."

I thought with government the only things private are personel matters and pending / active legal cases.....

elymus43

This thing takes more turns than a squirrel in the road????? It seems they do not what the people to know the facts. The voters were not thinking in the last city election......

sofanna

The muddier they deal becomes, the less truth we will be told. So much for transparency and the truth.

jerseygrl42

so here is the deal in a nutshell; the taxpayers pay for the land, the taxpayers pay to abate the arsenic and other"substantial" mitigation costs and improvements, the taxpayers pay for a parking garage without which their would be no hotel, and its too early to know any of these costs ...because its only been 4 years or so and guess who pockets all the profit in this partnership...no its not the taxpayers !...and isn't this just a grand "partnership"... ...and Jan told us we already have a half billion dollar infra-structure debt...disgusting!

DickD

How much of this did Ron Young know when he got State tax money for the Plamondons and the Randalls?

jerseygrl42

take a guess

DickD

Is this for real?  The Randall's and the Plamondons have a real estate transaction, which is private and not revealed; yet the City has an MOU to assume this private transaction.  So, you want taxes to pay for a secret negotiation?  This seems like it would violate the laws, if not it should.  It is definitely a conflict of interest!
"That is a private real estate transaction. The current MOU has the city assuming the purchase agreement, with ground rent being paid to the City, which would recover the purchase price over some term."

They have an MOU before an appraisal?  This too is hard to believe.  It is called. "buying a pig in a poke".  
"An appraisal is being performed, and has always been anticipated."

Was there ever an RFP?  What unique partnership existed between the City and the Plamondons?  If an RFP was not issued, how can it be said that the City purchase rules were followed?  Not being a typical real estate transaction is an understatement.

"Also anticipated through the RFP process was the unique nature of the partnership on the project and the relationship between the City and the hotel developer. As a result, this is not a typical real estate acquisition. Our purchasing rules have been followed."

If the mitigation costs are unknown, how can all of the previous statements on price and what the State of Maryland has agreed to pay be right?
"We do not know what the mitigation costs will be until a mitigation plan is finalized with MHT, and then that work is priced. It is our intent to have the equitable distribution of those mitigation costs shared between the public and private sectors, but it’s too early to say what that will look like or its impact on other elements of the project."

This whole deal smacks of fraud and underhanded dealing.

Burgessdr

An RFP was issued. How can you comment when ignorant of basics?

DickD

ignorant? Can you show the RFP and who it was sent to, along with any and all responses? This article states one was anticipated; not that one was actually sent out. So, before castigating anyone please present your evidence not just nasty remarks.

sofanna

I totally agree! If an audit was completed from the very beginning of the proposed project until now, I wonder how much fraud or underhanded dealings would be found.

KellyAlzan

Look City. You’re playing rich uncle to rich people (the plamandoons ) who doesn’t have the money

Dwasserba

Chronic hotel dysphoria (CHD)

KellyAlzan

no responses from ANYONE?????

Welcome to the discussion.

Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Engage ideas. This forum is for the exchange of ideas, insights and experiences, not personal attacks. Ad hominen criticisms are not allowed. Focus on ideas instead.
TURN OFF CAPS LOCK.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
No trolls. Off-topic comments and comments that bait others are not allowed.
No spamming. This is not the place to sell miracle cures.
Say it once. No repeat or repetitive posts, please.
Help us. Use the 'Report' link on each comment to let us know of abusive posts.