Downtown hotel 1

An artist’s rendering of the downtown hotel and conference center project, as viewed from the northwest corner of Patrick and Carroll streets.

A new agreement with details of the proposed downtown hotel and conference center project cleared the Frederick County Council despite opposition from its three Republican members.

The council on Tuesday passed the nonbinding memorandum of understanding by a 4-3 vote, split along party lines.

Democratic council members Jerry Donald, Jessica Fitzwater and M.C. Keegan-Ayer, as well as Bud Otis, who is unaffiliated, supported the agreement. Republicans Tony Chmelik, Kirby Delauter and Billy Shreve voted against it.

Frederick County is one of five partners that must approve the agreement for the project to receive a $1 million capital appropriation included in the Maryland General Assembly’s fiscal 2017 budget. Other partners are the city of Frederick, Plamondon Hospitality Partners, the Maryland Stadium Authority and the Maryland Economic Development Corp., or MEDCO.

The city Board of Aldermen on Thursday unanimously passed the agreement. The other parties are expected to sign off on the document within the next month, according to Richard Griffin, the city’s economic development director.

The county’s contribution to the $84 million project, anticipated as a $2.8 million tax-increment financing (TIF) bond under the approved agreement, took center stage in debate among council members Tuesday.

Under the TIF, the county will pledge a portion of the taxes generated from the project toward funding the development. All public funds will be used only toward the public portions of the project: a 20,000-square-foot-plus conference center, on-site parking and other infrastructure improvements, according to the memorandum.

Council members who voted in favor of the agreement framed the county’s support as low risk with high return on investment. They named more parking and increased tax revenue once the TIF bonds are paid off as two specific benefits for the county.

“I couldn’t see any skin in the game for us,” Donald said. “It’s almost an all-win for the county.”

But Shreve and Delauter echoed prior statements about risk to the taxpayers among the reasons for their opposition. If the project “goes south,” the burden to make up the cost difference will ultimately fall to the taxpayer, Delauter said.

Language in the document specifically states that hotel developer Plamondon Hospitality Partners will be responsible for operations, including financial shortfalls and losses, for the hotel and conference center.

Chmelik acknowledged that the agreement names Plamondon as responsible for shortfalls, but he noted that bankruptcy would put the state taxpayer on the line.

The Maryland General Assembly included a $1 million appropriation in its fiscal 2017 capital budget. During the 2016 General Assembly session, state lawmakers also pre-authorized $15 million for the next two budgets.

The new memorandum was required as a condition for the project to receive the $1 million funding allocation.

Shreve and Delauter also reiterated philosophical opposition to a publicly subsidized project when other similar projects have not received the same financial support.

Randy Cohen, owner of the FSK Holiday Inn, plans to overhaul his hotel and conference center property. He has criticized the public funding for the downtown hotel project when his own is being entirely privately funded.

Delauter on Tuesday read aloud a letter sent from Cohen urging the council to vote down the agreement.

Much of the new memorandum echoes terms of previous agreements, including a 2014 document approved by the then-Board of County Commissioners. Shreve and Delauter were among the commissioners who at the time passed the agreement by a unanimous vote.

One major change under the new memorandum is the owner of the conference center, now proposed as the Maryland Economic Development Corp. MEDCO is a state agency that borrows money and issues bonds to help state and local economic development agencies and private companies with projects that benefit the public.

Plamondon was intended to own the conference center under previous discussions and nonbinding agreements.

Plamondon will foot the $53 million cost of the 200-room hotel and corresponding retail component, the agreement stated. A combination of city, county and state funds will cover the remaining $31 million cost for public parts of the project.

The agreement also includes provisions that any party can terminate the memorandum at any time for any reason. It must be returned to the General Assembly’s budget committees for a 45-day comment period once it is signed by all parties.

The property at 200 and 212 E. Patrick St. is currently owned by a business entity formed by members of the Randall family. The Randall family also owns the parent company of The Frederick News-Post.

Follow Nancy Lavin on Twitter: @NancyKLavin.

Nancy Lavin covers social services, demographics and religion for The Frederick News-Post.

(70) comments

KellyAlzan

Why don't we table the idea of doing this with a developer that simply doesn't have the funds and set forth the effort and spend a year looking for a self funding developer?

elymus43

This should be left up the VOTERS of Frederick city and city. Why should a few elected officials be able to decide on matters like this. The "Tech. Park" looks like nothing but homes going up a fast pace. Where is all the TECH. promised??? The voters should stop following sports and etc., instead start focusing on where their tax money is spent?

KellyAlzan

there ain't gonna be no "tech park".

The developer is going to come back to the county cryin the blues that the market for his tech park has diminished and he'll present the county with new plans for more houses.

petersamuel

Yes this is the weakness of the planning and zoning. The developer wants to sell his development at a profit. At present you can do that with housing so housing gets developed. But we have vast amounts of empty commercial space so it doesn't pay to develop more. By contrast demand for housing, rental and purchase is v strong. Also if Frederick doesn't zone land for new housing it will get built in Brunswick or some place else.

Tanstaafl

There is big money all over this!

sofanna

Who decided that Frederick County taxpayers would be part of this "partnership"? Sure, the people of Frederick City will benefit, but the County residents will not, yet we will be paying the majority of the taxes supporting this project. I do not want my taxes to support this project. But, "what difference does it make?". I would like a waiver to not have to pay the "incremental tax increases" charged to my property. Anybody else want a waiver? Contact the County Executive.

public-redux

"Who decided that Frederick County taxpayers would be part of this "partnership"? "

That would be the elected representatives who run the county government. And, FWIW, every resident of Frederick City is a also a resident of Frederick County. We get to pay twice.

KellyAlzan

State money is also involved. So taxpayers from all of MD are paying for this.

KellyAlzan

Where r our delegates and senators to help us stop this???

joelp77440

Uh, a majority voted for it . I support the hotel, so in a way, my taxes dollars and representation is working for me. People have a real hard time understanding democracy.

petersamuel

Slim majority 4 to 3 in Winchester Hall. In Annapolis in the spring the vote of the state delegation was 5 to 3 against the hotel, and a majority of the house and senate appropriations committees declined to advance the hotel support bills. In the City so far the hotel maintains a majority, so it's a mixed picture. Regardless democracy allows dissent from majority decisions. I hope City officials will come around to giving up on this project which is so slow and chaotic it is set up for vote after vote after vote. Meanwhile of course nothing actually gets built, or even seems to get close to construction.

KellyAlzan

So joel, what was it you were saying again?

MAVRICKinc7

A majority of which cross section of ordinary folks voted on this project? In most cases a majority can be as small as 4 people, or up to 20 politicians, representing thousands and their party line affiliations who represent only half of the vote, if it were taken. Isn't this what "majorities" are all about and winning by a single vote?

AND what DEMOCRACY are you referring to? Isn't that what we continue to obsess about: market share by stealth and by DEFAULT? What you are saying is the same thing Trump keeps lying about. He's ALWAYS winning somewhere in the United States, through POLLING results, but remains far back in the hunt, as with hunting to hounds and coming up with less than the MAJORITY it will take to win a national elerction.

This project was not voted in by a MAJORITY of its citizens, but rather the few who are more about unjustified enrichment of FAMILY that continues to rule from the General Assembly representatives to locally elected representatives who nurse off FAMILY values that claim to be a MAJORITY when in FACT they are not. How could we possibly know anything about DEMOCRACY when it has for decades, been distorted and mangled beyond recognition.

Take look at Due Process and how it is used as nothing more than filling in the blanks followed by a Check-Off box.

petersamuel

Votes so far by our elected reps have been: City Bd of Aldermen 5/0 in favor, CountyCouncil 4/3 in favor, state delegation to Annapolis 5 to 3 against. I agree there's a case for a referendum of the people.

MAVRICKinc7

Out and about looking for money to finance their next election results. What is it about "BOUGHT and PAID FOR in advance of a decision that was already made long before the public even caught wind of this sell-off and fire sale that you fail understand or comprehend? What is it about FAMILY values and rules of conducting business in Frederick City/ County, Maryland that would come as a surprise to you and your own postured positions? Why are most things in local elected governance the same as they are in National Politics?

Put elected government in a single room, behind closed doors, and point out who the best LIARS are. If there were of showing of hands it would include all present at such a meeting of minds.

bicep42

This is a BAD DEAL for city, county and state taxpayers. We should not be contributing a dime to this poorly thought out, ever changing money pit.

Jane and Ed

Apparently the special interest group of the Downtown Frederick Partnership, the Chamber of Commerce, the Tourism council, all of whome feed off the government, have far more voice than private citizens. These entitled folks, who see themselves as tge movers and shakers in this little pond called Frederick, want US to buy them a conference center. Reverse Robin Hood. Take from the poor to give to the rich. Major Employers, including Liedos and a handful of biotechs, have a great deal of power over local politicians, so since they demand the public pay for a conference center, our representatives do not even want to hear from us residents and citizen taxpayers. My local Democratic party has sold us out!

FrederickFan

Have you taken a stroll along the Carroll Creek Linear Park in downtown Frederick recently (that was paid for largely from public funds, i.e, your tax dollars)?

Too bad you weren't around back then. Perhaps you could have prevented public money from having been wasted on that magnificent anchor to our beautiful downtown.

The next time you ponder a walk, or attending a festival, or wedding, or business grand opening along Carroll Creek, be careful to avoid the appearance of "feeding off the government."

gary4books

[thumbup][thumbup][thumbup][thumbup]

petersamuel

The Carrol Creek Park is an excellent governmental project and a commendable use of public funds. It does a great utilitarian job of averting flood waters underneath while serving as a beautiful public amenity above. As pure public works it is the polar opposite of the City sponsored hotel project that is a dirty mix of business and government and is wasteful and damaging to the City. Plus I doubt it will ever get built, though I'm sure in the meantime it is preventing us getting rightsized investor funded hotels downtown. Actually I came to Frederick when the first stages of the mighty flood control conduits were under construction, and I've always been a fan.

shiftless88

Exactly correct. The difference is benefiting many businesses and benefiting one or two

Burgessdr

The hundreds of businesses that make up the Downtown Partnership and Chamber of Commerce and support the hotel pay millions in taxes each year to the city and provide jobs for thousands. You pay zero, notta, zip, nothing in city taxes and provide no, none, zilch jobs. Your only contribution is impotent trash talking

petersamuel

Donald: Paying taxes creates government jobs certainly. Actually I do pay City taxes and because quite a chunk of my income goes on those taxes I have that chunk of $s less to spend on groceries, house maintenance, telecom, books and other regular non-government goods and services, and so any jobs my taxes support are offset by jobs NOT created via the grocery store, and in home maintenance, telecom, computer etc. After-tax spending creates non-government jobs. The more you pay in taxes and the less you have to spend after tax, the more government jobs you generate and the fewer non-government jobs. "Impotent trash talk" you say. I'll leave it to others to judge who does that.

MAVRICKinc7

Wouldn't being a "oligarchy government" be closer to what continues to go on, from behind closed doors?"

Tanstaafl

Thank you! Well said!

jerseygrl42

no surprise here, and this is a disgrace with two families standing to gain $$$ at the expense of the taxpayers in this ridiculous "DEAL"...4 of the 5 so-called entities represent taxpayer money "invested" so that Randall can sell the tainted property to the City of Frederick taxpayers and Plamondon can reap the profits from millions of taxpayer dollars... and we still do not see the reporters including the cost of the parking deck in this projects TOTAL cost...wonder why

DickD

We are screwed!

Comment deleted.
petersamuel

Seven years have passed since the City's Incompetents and Hangers-on started this project and they have a lousy site, a hotel plan that doesn't fit the site, no parking plans, no historic preservation review, no traffic study. A state agency, MSA has bailed on them. They are years away from construction. Killing this idiocy of a City 'project' is needed in order to clear the way for some practical entrepreneurs to design and build a hotel, or preferably hotels plural without tens of millions of taxpayer $s. It we the citizens who are being screwed under the present scheming and we are NOT getting a hotel.

MAVRICKinc7

In more ways than you could possibly imagine.

petersamuel

Mr Burgess: this project is highly speculative, meaning it could well be very successful for Plamondon or it could go belly up. Either way it will take business, jobs and tax revenues away from investor-financed competitors, and cost $31 million of upfront public money. My complaint has never been that Plamondon owned the conference center but that it was being financed with taxpayer money. That remains the case. ’Ownership’ is a legal technicality when longterm contracts allow the conference center property to be operated by the hotelier as an integral part of his business at a token rent. It remains a $16m gift by taxpayers to Plamondon's business.

Burgessdr

Samuel. You are changing your story again and again. You have repeatedly ad nauseum claimed there is no market for the hotel and conference center and that it is guaranteed to fail. You say MSA bailed because they are convinced it will fail. You say MEDCO involvement guarantees it will fail. Oh what a tangled web you weave when first you practice to deceive.

DickD

Better look in the mirror, Burgess!

petersamuel

Burgess: I have said we should be concerned about possible failure because $31m of public funds are going to the project and because City sponsorship and City ownership of the land puts City ‘on the hook’ to keep it open with ongoing subsidies if it is failing. As to MEDCO it has a two for two failure rate (Rocky Gap and Chesapeake) with hotel conference centers. Why handicap the project further with them as project managers and owners representatives? It’s crazy. I’ve never presumed to know the future sufficiently to “guarantee” any outcome… heck no, I’ll guarantee this is going to cost taxpayers more the longer the downtown hotel farce goes on.

Burgessdr

Samuel. You are either confused or are being deceptive. The only financial liabilities will be on Plamondon and bond holders. Zero of your property taxes, sales taxes, income taxes will be involved. In the very unlikey event that Plamondon doesnt pay taxes the bondholders get screwed. No taxpayer dollars invloved. Enough of your nonsense

gary4books

If it did not need a "push" from available sources, it would already be there. The benefit is to the community and perhaps to the investors and that makes it a perfect place to put public money. All the local business will have more customers to pass by.

petersamuel

Burgessdr
Samuel. You are either confused or are being deceptive. The only financial liabilities will be on Plamondon and bond holders. Zero of your property taxes, sales taxes, income taxes will be involved. In the very unlikey event that Plamondon doesnt pay taxes the bondholders get screwed. No taxpayer dollars invloved. Enough of your nonsense.

Samuel: Burgess, taxpayer dollars are certainly involved. The project has already spent to the tune of several million $s of City and state spending on the many consultant companies, their studies and reports, lobbying and the salaries of City DED employees promoting the project. The City is presently going for more state grants and setting aside City CIP and parking fund $s. More taxpayer $s. The ‘preauthorization’ of two state capital grants of $7.5m is state taxpayer $s. As to the hotel tax rebates and TIFs they are proposed to create county and city debt — taxpayer debt. Property tax increments and rebated hotel tax revenues from DH&CC used for debt service will bet at least partly offset by tax decrements elsewhere as business moves from existing establishments to the DHCC. This is a City designed, City sponsored project, with a City selected developer on City owned land. That puts City taxpayers firmly 'on the hook' when it loses money and Plamondon tells us he can't keep it going without 'some support' from the City or state. The City is threatened with a huge empty deteriorating space if it gets foreclosed on. And to the extent bondholders get screwed the City and the County’s reputation is tarnished, and borrowing for schools, utilities and the like made that much more difficult and costly. Anyone who denies City costs and liabilities is living in la-la land.

MAVRICKinc7

Can we conclude you are reading from a scripted message that has no room for details, from a public point of view? You are a COMPANY MAN, so why would we expect you to be unbiased in your business acumen that defaults to speculation and more guess work?

gary4books

Good for Frederick business. Even if it does not make a ton of money all the locals will have more customers. Great news!

MAVRICKinc7

More SPECULATION or just guesswork?

FrederickFan

In 2014, when Blaine Young took $1,000,000 in campaign bribes from the residential development industry, Kirby Delauter and Billy Shreve and no problem voting for TWO $70,000,000 residential TIFs for two residential developers; one at the Jefferson "Tech" Park (where the "tech" seems to have mysteriously disappeared), and one for the Oakdale Linganore residential development. In both these situations, Delauter and Shreve forced Frederick County taxpayers to foot the bill for $70,000,000 of developer infrastructure WITH NO PAYBACK, EVER. Taxpayers will be paying off the debt for these two huge disasters for a generation. Apparently that was OK, but $2.8 million that will be paid back in less than ten years, that will help downtown Frederick City businesses is not a good idea. What hypocrites!

Lets see if Delauter, Shreve, and Chmelik run for public office again claiming to be "small business friendly." They voted against small business last night.

KellyAlzan

I disagree. They voted like a tax payer.

2014 was 2014. This is today. New government. New day.

BlueDawn666

Yep Kirby is actually governing like a taxpayer and I agree with you Kelly, Kirby does stand a good chance at being elected CE, we are still a strong Republican County, Jan barely beat Blaine, which the dems seemed to have forgotten and Jerry forgot how narrowly he won against Ellen, not sure why they didn't think this through and vote NO, but hey I guess they don't plan on running a second time for County Council.. Kirby for CE and a Council full of Republicans..that will be the future in Frederick County..and we will have the dems to thank for that.

BlueDawn666

Not that Republicans are that bad...there are some Republicans I would vote for..

KellyAlzan

Yep. We embarrassingly watched ba'lane create his own demise.

Jan was not voted into office, ba'lane, a republican, WAS VOTED OUT OF OFFICE in a primarily republican county.

Kirbie has so far, a 100% success rate in his election candidacy results.

Jan is spending all this time undoing everything from the previous BOCC. Yet - the council's support for this criminal project is aiding kirbie'S way to county executive. Extremely foolish and short sighted thinking.

FrederickFan

Wow, you are very forgiving for past sins. Exactly $140,000,000 worth of past sins. I have higher standards. Please tell your boy Delauter that I would be more than pleased to see him run against CE Gardner should they both chose to run in two years. I'd be near the front of the very long line of Gardner supporters waiting to pay his filing fee!

KellyAlzan

Frederickfan I am pointing out facts. I never said I support delaughter, nor do I.

In journalism one must present facts as they are. My comments are nothing more. Nothing less. The sun rises in the east and sets in the west.

DickD

Some of my favorite people would lose, but it is quite possible they have gone too far with this. Jerry Donald has been one of my favorite people too.

public-redux

"Jan barely beat Blaine,"

No, she stomped him 54% to 46% in a Republican wave election year. You might remember that we even elected a Republican governor that year. I've wondered how much lower BY's percentage might have been in a neutral year. Low 40s, I'd guess. It was a rout, a trouncing, a blowout. She whupped him but good.

BlueDawn666

The only reason she won was because so many Republicans crossed the party line and voted against Blaine but they were not necessarily voting for Jan. Don't count on that happening again...after this vote don't count on those same Republicans to be voting the same way. Your idea of whooping is far different than mine.

public-redux

Blue, if Clinton beats Trump by 8 percentage points, will you say she barely beat him?

BlueDawn666

You could say the same exact thing now about the Dems...the dems did exactly what they were always calling Kirby and Billy out for..Taxpayers will be paying off the debt for the DH&CC for GENERATIONS...

DickD

Unfortunately, you are right, Blue.

DickD

You aren't trying to justify this travesty with the bad actions of the Blaine gang are you?

jerseygrl42

I will tell you it wasn't ok with many of the voters and it is unfortunate that only BY suffered the consequences of these two travesties and almost a 3rd one, the incinerator which would be brought lotsa $$$ to those in power along with the wasteful authority

KellyAlzan

And the democrats have just secured the county executive seat for Kirbie Delaughter. We shall now become accustomed to hearing "county executive kirbie delaughter (r)"..........

gary4books

Got to wait and see.

Fredmd21704

You do not speak for the majority.

petersamuel

I think a majority oppose taxpayer subsidies for a business. I think a majority want to see a revival of the downtown including hotels and would prefer those hotels to better scaled than the City project to fit into the existing downtown without demolition of historic buildings. I think a majority would like to see hotels that fit different budgets as opposed to a single 'upscale' hotel catering to the rich at $160/night room rates as the City project does. I could be wrong about the majority of course in which case I am happy to express a minority opinion. Majorities are sometimes wrong.

Fredmd21704

you would actually be surprised. When you look at the tax revenue that will be coming into the city, it pays for itself.

Dwasserba

I think you are right. Boutique hotels and "air b&b" opportunities don't shift focus from the spires and attract people already charmed by what's quaint. I never shopped locally after visiting a convention center. Lots of options in the hotel too. Enjoy the view from the rooftop restaurant where you can wave at the shop owners below.

KellyAlzan

Tax revenue that will be used to pay money back to the state.

Whereas with a private investor - the tax revenue could go to schools, roads, fire/rescue, police, etc.

Jane and Ed

We have spent a year talking to all the people involved and the public citizens who oppose this monstrousity. Its not just about the corporate welfare, it's also about the loss of historical buildings, the massive big box Marriott dominating the cityscape, the lack of principles used by the city when paying Jones Lang LaSalle to work 80 hours plus for Plamondon on his proposal before during and after this supposedly fair and open procurement was happening...they only worked 4.5 for Wormald the only other developer who bid, but the city and county look the other way. This is WRONG. It is dirty, ugly wrong that harms all of us. We love Frederick. We want a fantastic downtown hotel project which has not been redertemined by the few big shots who think they should take money from the rest of us. So many of us are out here in Frederick. People who feel so hopeless about the direction the city and county are taking. Please take action. You are not represented here by any of the local Dems. it kills me. i am a life long Dem. They accuse me of being "used" by republicans. Well, I say, if you don't represent our interests, I will speak my truth and continue to work to replace you with others who will support the citizens. If that turns out to be republicans, so be it. This isn't about party politics. its about having open honest and clean government which represents ALL of us. Not just the campaign donors.

DickD

You might be right, but that would be terrible. It really disappoints me what the Democrats have done.

petersamuel

It is seriously misleading to say that $31 million of state, county and city funds will cover “public parts of the project.” About $16m of this $31m in fact goes to the conference center which is to be an integral part of the hotel, controlled, managed and operated by the hotel owner at the hotel owner’s expense but with the hotel owner booking events and pocketing all event fees. The hotelier will also have a monopoly on catering services. The only ‘public’ aspect is a City entitlement to a few free days use and 10 percent of any net conference center profits. There is to be a condominium-type agreement to have the state financier MEDCO ‘own’ the conference center and lease to the hotel owner for a peppercorn rent, but for all intents and purposes the $16m will be taxpayers gifting a private conference center to the hotelier as an adjunct to the hotel. Plans are still vague on parking but about $10m of public money is set aside for parking space onsite. Much of that will apparently go for a parking basement under the hotel so public money will be building all the pilings, the foundation slab and the columns supporting the hotel. If this was a financially viable project public expenses would be limited to about $5 million offsite work on upgrading utilities and the adjacent streets, sidewalks and connections to the Carroll Creek promenades. P Samuel

gary4books

Way too pessimistic.

Burgessdr

As usual your comments are terribly confused. On one hand you say Plamondon will have a monopoly and get rich pocketing all the money. On the other hand, you also say there is no demand for the hotel and conference center and it will go belly up. So which is it? Will it be highly successful, or fail miserably? You say it will be a traffic nightmare, but also say it will fail. Huh huh huh? If it fails there will be no traffic. You complained when Plamondon would own conference center, now you are complaing that they will not own it. Your silly arguments are like ping pong balls randomly bouncing all over the place.

Dwasserba

Interesting. I relate to his "silly" posts because I don't know which to fear more, that it succeeds, or that it fails....I do know the word "non binding" is scary. What's the point, then.

DickD

Please provide us with a reason that we need to subsidize the Plamondons and Randalls, I don't accept theirs.

gary4books

Give me a reason to care what they get.

DickD

Gary, don't pretend to be so naive', it is all about our tax money and you know it!

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