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.

Frederick County Executive Jan Gardner’s support of a $2.8 million TIF for the proposed downtown hotel and conference center was called into question at last week’s County Council meeting.

Tax-increment financing, or TIF, bonds allow developments to borrow money based on anticipated future increases in tax revenue, part of which will be used to pay back the bond debt.

The downtown hotel and conference center project currently anticipates TIFs from both the city and the county to help pay for public investments at the project site, including the conference center, infrastructure improvements, land acquisition and parking.

Councilman Kirby Delauter (R) questioned Gardner’s support for the TIF, given that she previously testified publicly against other TIF proposals during his last term as a member of the former Board of County Commissioners, from 2010 to 2014.

So what changed for Gardner?

For one, she tightened the county’s policy on TIF approvals in 2015. The new changes would allow TIFs in more limited circumstances, and would not have allowed the funding mechanism for projects approved by the former board.

Past positions on TIFs

Delauter himself took heat at the most recent council meeting after backing away from the downtown hotel and conference center TIF, after he supported a similar proposal in 2014.

He said new facets to the downtown deal — including competition with another proposed conference center outside of the downtown core — have made him rethink his position.

Delauter also said he is “at a loss” to explain Gardner’s support for the proposed downtown hotel and conference center, given her past opposition to TIF agreements.

“Jan Gardner was losing her mind,” he said. “She thought that the world was coming to an end, the TIF was the worst thing out there, you can’t do that, the taxpayers are going to get totally screwed on this. Now, all the sudden, TIFs are a good thing.”

Gardner said she does disagree with the TIFs approved by former commissioners in Oakdale and for the Jefferson Tech Park development — because they are underpinned by mostly residential areas.

“It’s like every other financial tool,” Gardner said of TIFs. “It can be done well, or it can be done poorly.”

Residential properties don’t generate a community-wide economic benefit and also require expenditures on such services as police, fire, snowplowing and schools.

For the Jefferson Tech Park development, financial estimates provided by Gardner show that the county would direct about $70 million in tax revenues to the development through 2043, while only receiving about $17.5 million in tax receipts.

Delauter argued that the Tech Park and Oakdale TIFs funded important road projects, including interchanges on U.S. 340 and I-70.

Gardner said other financial arrangements should have been used.

Two TIFs she’s supported in the past were for a former Toys R Us distribution center (now used by a different company) that was issued in 1996 for $1.89 million and a MedImmune TIF issued in 1998 for $1.09 million. The MedImmune TIF was for 10 years and has been paid off. The Toys R Us TIF is expected to be paid off in September 2018.

“I support utilizing TIFs to create jobs and will always protect taxpayers by ensuring an immediate property tax benefit to the county,” Gardner said last week. “I do not support the use of TIF’s for residential development. We do not need to incentivize residential development and the county needs the property tax revenue to pay for services demanded by residential growth.”

New policy

The county has maintained a policy on when to allow TIFs since at least 2005.

In 2013, the Board of County Commissioners changed the policy to allow TIFs for “planned unit developments,” which are residential subdivisions that include commercial areas. TIFs in Oakdale and Jefferson Tech Park qualified under that change.

With Gardner’s re-write of the policy, TIFs are again limited to commercial, industrial or mixed-use developments.

Gardner also changed the policy to limit borrowing on anticipated future tax revenue. The 2014 policy allowed TIF borrowing when a project was expected to generate additional property taxes of at least 150 percent of the anticipated debt. Gardner raised that bar to 200 percent.

The city of Frederick has no formal policy on tax-increment financing, but has agreed to follow the county’s new policy, Gardner said.

“It’s one of our goals to develop, but the city hasn’t done a lot of TIFs,” said Katie Barkdoll, city budget director.

The one time the city used a TIF, to fund the bridge connecting Gas House Pike and Trading Lane, it followed the county’s policy.

Barkdoll in an interview Thursday said that TIF was successful, and called the county’s policy “strong.”

TIFs for downtown

There are still questions about tax-increment financing for the downtown project. For instance, officials could not say for certain last week that the conference center will absolutely become a taxable property. Under the most recent plans, the center would be owned by MEDCO, a state entity. Once the center is leased to the hotel developer, a for-profit company, it will likely become assessable, officials said.

The exact size of the bonds for the downtown hotel project — and final determinations about the assessability of the conference center — will be calculated by MuniCap Inc., a public finance consulting firm based in Columbia, said Richard Griffin, the city’s economic development director.

Project plans call for a 200-room hotel with 24,000 square feet of conference center space at the site of the old Frederick News-Post building. The property at 200 and 212 E. Patrick St. is 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.

Staff writer Nancy Lavin contributed to this report.

Follow Danielle E. Gaines on Twitter: @danielleegaines.

Danielle E. Gaines covers politics and government in Frederick County, splitting her time between Winchester Hall and The State House. Having grown up in Illinois, she lived in New York and California before settling in Maryland.

(58) comments

gary4books

Kelly writes: "Yes Gary, because we always need a hotel to crash at after eating a sandwich .." And I remind that many also try a craft beer or two (or more) and seriously need a nap.

francesca_easa

Funding issues aside. The majority of residents don't want this unsightly and mammoth building in the downtown area.

Nothing is sacred anymore. Change the ambiance of the historic downtown and bring in big box businesses. Build roads, houses and businesses along the scenic Route 15 byway and take away the beautiful scenery and footsteps of the Civil War soldiers. Plow over farm lands to create more buildings and schools instead of repurposing vacant buildings.

It is a shame that the only thing that matters is cement and builders. Soon this place will be a sterile, crowded and rundown city like everywhere around us.

sofanna

Agree 100%. This entire project has been a blunder from the start. The facts have changed too many times. The citizens of Frederick County do not want this project done at all. We were originally told our taxes would NOT be used for any portion related to this deal. If the original investors cannot support the entire funding of this project, it must be put on hold so the taxpayers are not FORCED to contribute monetarily to something we do not agree with. Add two questions to the upcoming election ballot;
1. Do you want this project completed?
2. Do you want your taxes to increase every year to contribute monetarily to this project?

francesca_easa

I agree. This issue should be on a ballot for the residents to decide.

threecents

Sorry Jan. I know Kirby is only against this because you are for it, but his reasoning is sound. The hotel is likely to make a lot of money, but it should be able to do so on its own. We don't need to be assuming any risk for a private hotel that we don't need and that will be competing with private hotels that did not get special favors.

shiftless88

Hey Kirby, How much "tech" has been developed at the Tech Park? What? You mean you all just wanted to jam more houses in while pretending jobs would be created? Say it ain't so!

KellyAlzan

If Plamondon wants it, let them spend their money, not ours.

DickD

If Plamondon wants it, let them spend their money, not ours.

DickD

If they use their own money, I am not against it, I am against it if County and State tax money is used.

bicep42

This is a blatant misuse of taxpayers ' money. We should NOT be funding a private business. Let this hotel and unneeded conference center sink or swim on its own merits. The taxpayers assume all the risk and private business owners reap the profits. It's beyond shady.
The people I know who own downtown businesses would love to be funded by the taxpayers but they don't get that opportunity because they are not part of the right crowd.

FrederickFan

Perhaps you overlooked the FNPs previous article on the project, which does not support your comments.

KellyAlzan

If Plamondon wants it, let them spend their money, not ours.

MAVRICKinc7

BUT how would anyone know the difference? You are aware the FNP does not allow commentators to PRINT their remarks from one blog site to the next. It's not about overlooking the FNP. It's all about CENSORSHIP of a kind that doesn't allow recall of what has been said by commentators or a rebuttal by informed Frederick citizens.

Look at the reasoning the FNP uses to thwart commentors from remembering what they said last week. What is it about the FNP editorial staff and their penchant for USING "REPORT" status as a moderator of public opinion and what comes or is allowed to exist under the terms and conditions of THEIR "+ Add Reply?"

Since you have this information about FNP's PREVIOUS article on this project, why not give us the heading of this past article and let US make up our own minds on which way the FNP took, not on this scripted messaging but the one you are referring to, that does not support the comments and conclusions of the previous commentator.

No motive on my part. Just asking to see what you have stored away on the rebuttal side of this discussion and see if we can open this door of information a little wider.

bicep42

The FNP stands to unload their toxic site at 3X market value. They cannot possibly present a fair assessment of this issue. They refuse to print letters to the editor written by opponents of the project. Not the least bit objective or balanced.

sofanna

The FNP does not report the entire facts, yet they don't want the Amendments to the Charter to pass. The FNP is hypocritical in my opinion. They do 'creative' editing.

armillary


Developers Kirby defends
build houses with TIFs he misspends
and support he'll declare
for a bridge to nowhere
his TIFs are To Influence Friends.

BlueDawn666

You can say this same exact thing about Jan

KellyAlzan

Armillary only supports this cause Jan supports it. If Jan was against, armillary would be gang busters dead set against.

armillary

Kirby was lining the pockets of his developer friends in hopes of gaining personal business. CE Gardner is supporting economic development along the Carroll Creek. I was with you and others when you hated the obviously corrupt former BOCC. Unfortunately you seem to think all government is corrupt, a view I don't share. I believe economic development is a valid function of government. I'm willing to trust our leaders based upon their track record, and Ron Young and CE Gardner have earned my trust over the years.

KellyAlzan

If Plamondon wants it, let them spend their money, not ours.

BlueDawn666

CE Gardner is supporting economic development along the Carroll Creek..but isn't that how all TIF's are touted? With this deal it is lining the pockets of the Randall's and the Plamondon's and MEDCO, which in the end will be on the taxpayers to support and forever, why a does a company with 20 million dollars in annual revenues need TIF's? What they forgot how to run a successful business or is it because they know this business won't be successful?

...also there are other ways to pay people that leave no trace. This isn't economic development, because none of the economics add up with this project, this project will not economically develop Frederick. If they did I would be all for it...but they don't.

threecents

Good point Armilary. They have earned a lot of trust. I trust they believe this is a good thing, and it may very well be. Both sides have valid points.

glenkrc

Ron Young has pretty much been about feathering the nests of the Downtown/ Baker Park/Hood College crowd at the expense of the rest of the city. Within the D/BP/HC echo chamber, subsidizing development on Carroll Creek is axiomatic. Not so for many others throughout the city. This initiative is a key stepping stone to the complete gentrification of the downtown - if it's to be done, let it be done on the backs of the D/BP/HC crowd. Despite the recent publicity about the "desegregation" of the downtown, the fact remains that the 2010 census showed the 3 least-integrated census tracts in the City of Frederick were: 1.) downtown from Carroll Creek to 4th Street; 2.) Hood College/Baker Park; 3.) downtown 4th Street to 7th Street.

http://www.nytimes.com/projects/census/2010/map.html

BlueDawn666

Swamping the City's Office of Economic Development (with copies to Mayor & Aldermen and media) with questions from City Taxpayers asking "Am I eligible for a TIF if I make an addition to my home? If not why not?" When someone provides the knee-jerk response: "law doesn't permit it", ask for a citation to the specific law that purportedly prohibits it. The Maryland Tax Increment Financing Act (that authorizes local governments to issue TIFs) makes issuing a TIF pretty much a pure political decision by the local govt. Stated differently, the only rules concerning who gets a TIF is that there ain't no rules.

The proponents of the City & County TIFs for the DH&CC sound like a broken record: no risk to taxpayers, no use of existing taxpayer dollars, etc. Those kind of statements contain enough grains of truth in them to avoid being outright lies. Hence it is difficult to draw the attention of the average taxpayer to the disadvantages of TIFs.


As an alternative, approach the problem from the other direction, i.e, "Whats good for the goose is god for the gander."

In effect, TIFs are a roundabout way of allowing a taxpayer to use a portion of their real property taxes to finance improvements to their property. Allowing a homeowner to earmark a portion of their real property taxes to pay a home improvement loan is substantively no different than a TIF.

If TIFs are so wonderful, without risk to the taxpayers, don't involve existing taxpayer dollars, will create jobs, etc., CAN EVERY TAXPAYER (NOT JUST THOSE WITH POLITICAL CONNECTIONS) HAVE A TIF? IF NOT, WHY NOT?....anyone need to do some home improvements, then ask for a TIF, you should be able to get a TIF, IF NOT WHY NOT?

tgrace

Excellent point Blue, I will be submitting my application Monday morning..

DickD

tgrace is right, let's all of us submit a TIF. We qualify as much as the Randalls and the Plamomdons.

FrederickFan

This is why Kirby Delauter is such a horrifying failure for Frederick County taxpayers. He is attacking County Executive Gardner who continues to demonstrate disciplined financial management. Yet it was Delauter, Blaine Young, and Billy Shreve who completely destroyed $53,000,000 of taxpayer revenue with their Jefferson "Tech" Park residential development TIF, undoubtedly one of the greatest financial disasters in Frederick County history.

BlueDawn666

Kirby is right a TIF is a TIF..why was Jan so against one TIF but for the TIF that would support the Downtown Hotel and Conference Center? She continues to demonstrate disciplined financial management...LOL, now that's funny that you think that. What will it take for you to realize the corruption still runs deep in Winchester Hall? The DH&CC will be the greatest financial disasters in Frederick County history, it will make the Jefferson "Tech" Park and it's $53,000,000 seem like peanuts.

See what I don't understand is how a someone can be a disciplined financial manager and support TIF's..makes no sense to me? Maybe you FrederickFan can make sense of it and explain it to the rest of us?

gary4books

The results are the key to evaluating a spending project, more than even the cost. Some investments are productive and some are not. I suggest that the use of TIF money and the final product is the best way to evaluate the expenditure.
A hotel downtown will help local merchants with more customers. The project needs some help. If it did not need help we would already have the hotel.

kimberlymellon

This assumption is one most of us make until a little fact digging is done. The reality is that there have been proposed hotels and locations by privately funded hoteliers (reported in the FNP) that have been summarily turned away by the City's Director of Economic Development and cronies in the Downtown Frederick Partnership on behalf of their favored Chamber of Commerce MEG member, Plamondon Hospitality. Who knew such steering was occurring or that City officials would do such a terrible thing? I certainly didn't. We would not be having this manufactured debate over a TIF and a 31 million dollar public conference center that leaders refuse to address on its merits separately were it not for this outrageous and bold act of 'good ol boy ism' at both the City and County level. Jan is in two MEG member's pockets. She should rethink this, as they are making a fool of her for the second and now third time for all to see. IMHO.

FrederickFan

kimberlymellon - I love a conspiracy fairy tale as much as the next guy. But I 've searched the campaign records and found absolutely no evidence of Plamondin ever giving one cent to CE Gardner. Who are these megs you are referring to, and what proof do you have that she is acting in any way except the benefit of the taxpayers? Perhaps she just disagrees with you on the merits of a downtown Conference Center.

tgrace

If there was a sound economic basis for the hotel and conference center private investors would build it. The reason it has not happened, humm... You seem to think our government knows more about running a business than, well, business.

public-redux

By MEG, I think Mellon is referring to the Major Employers Group within the Chamber of Commerce. If that is incorrect, I hope she will clarify.

KellyAlzan

If Plamondon wants it, let them spend their money, not ours.

MAVRICKinc7

Aren't you ASSUMING, SPECULATING and GUESSING the value of a product, after it's built? What is it about putting the cart before the horse that deserves to be explored and not just guesstimating the end result, which at best remains an UNKNOWN? If you're looking at RESULTS as the common denominator to selling this project why not tell us how many PARTNERS does the Randall FAMILY have in this scam for public monies, that get changed around from one quarter of time to the next. When you use and address "EXPENDITURES" what does that say about using TIFs that are in perpetual motion and DEVELOPMENTS best friend while USING tax payer money to offset what developers can't even afford in the fiscal open markets?

sofanna

I disagree that local merchants will benefit. All the businesses in the way of this project will lose. Some of the local merchants no longer exist or are barely holding on.

We don't want this project so why are we FORCED to help?

FrederickFan

Because the increase in tax revenue from commercial and industrial TIFs repays the taxpayers in a just a few years, and then may CONTINUE to pay incremental taxes for decades after that. The end result is more revenue, jobs and actual economic growth, that lowers the burden on taxpayers.

Residential TIFs NEVER pay back the taxpayers, because every incremental dollar they bring in must go to increased costs to support thise new residents. In fact, since you asked, the real loss to the taxpayers thirty years from now on the "Tech" Park is really closer to $70 million, because it will cost the County $17 million to support the new residents (school, public safety, etc.)!

dtwigg

WHEN has the "taxpayer's burden" EVER been lowered?

BlueDawn666

BUT...there will be no increase in tax revenue from commercial and industrial because of the DH&CC...the DH&CC will not create that, it will not bring more business it will suck business from the existing hotels, hotels that never received TIF's, so how is that going increase revenues?, There is no Conference Center out there that makes money, the taxpayers always end up supporting them..that you know. Also the there is no way this hotel can ever fill enough rooms enough of the time to turn a profit and increase tax revenue..so your argument is flawed. It contains no logic..you see right

jthompson

In 2006 County Commissioners Cady, Lovell & Moi) of the "Thompson" BOCC (Cady, Lovell, Garder, Reeder & Moi) decreased the County's real property tax from $1 per $100 of assessed value to 93.6 cents per $100 of assessed value.

sofanna

Who has gotten a check with the notation, "repayment of taxes used toward a TIF?

public-redux

No, not all uses of a TIF are the same. Some TIF financed projects are more likely to fail than others. The JTP appears to be a disaster; the conference center merely dubious.

gary4books

Even if the hotel breaks even in profits it will provide more visitors and more customers to the neighboring businesses and be a benefit to the community. That is were help with financing helps the community and not the investors. Still a win for Frederick.

KellyAlzan

Yes Gary, because we always need a hotel to crash at after eating a sandwich

BlueDawn666

Agreed Public..dubious is not far from a disaster...a disaster becomes dubious only after the fact..then it's too late

BlueDawn666

Let me say this again
Agreed Public..dubious is not far from a disaster... dubious becomes disaster only after the fact..then it's too late

public-redux

Gary, don't know if you noticed but you changed the subject from the conference center to the hotel.

Second, your argument seems to consider two possibilities: breaking even or making money. There's a third possible outcome that we should not ignore.

threecents

I don't think Gary changed the subject.

public-redux

I don't think a conference center is a hotel. It appears we disagree.

threecents

Hello, the article and the discussion are about TIFs for the conf ctr and the hotel.

public-redux

So what? I said I was dubious about the conference center.

threecents

Oh, sorry. I did not realize Gary's comments were in response to yours. My bad.

MAVRICKinc7

ONLY IF he can share BOTH sides of this story instead of LYING to US by OMISSION of the dirt and details that the Frederick citizen population want to get but are DENIED by those in charge of the conversation; the FNP.

sofanna

Agree

KellyAlzan

Jan is in the wrong.

Just because kirbie has some anger problems, does not mean he can actually be right once in a while, in this case, kirbie is right.

I'm no kirbie supporter. But with Jan supporting this cluster f, like kirbie or not, her support is aiding kirbie a strong shot for the county executive seat.

DickD

And don't think he doesn't know it.

MAVRICKinc7

Based on the LIMITED FACTS provided so far, through the FNP, who can say what is WRONG or RIGHT? Why can't anyone define TIF with all its subtle and multiple ramifications instead of glossing over this financial scheme to unjustly ENRICH its FAMILY, FRIENDS and makers of monied interest? There can't be a wrong or right side to this story line. WE don't have enough information from which to make an INFORMED decision, one way or the other.

sofanna

Agree, again.

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