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.”