The first of five parties on Thursday signed off on a new agreement critical to advancing a proposed downtown hotel and conference center project.
The Frederick Board of Aldermen voted 4-0 to give its blessing to the five-party memorandum of understanding. The nonbinding agreement was required for the project to receive a $1 million appropriation included in the state’s fiscal 2017 budget.
The other partners in the agreement are the Frederick County government, Plamondon Hospitality Partners, the Maryland Stadium Authority and the Maryland Economic Development Corp., or MEDCO.
The aldermen’s approval Thursday came after comments from about a dozen speakers who were for and against the project. Residents and business owners also weighed in on the agreement during two prior workshop sessions.
Much of the document echoes the terms of previously approved agreements for the funding, ownership and operations of the roughly $84 million project.
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.
Prior plans called for hotel developer Plamondon Hospitality Partners to own and operate the conference center.
Plamondon will still be responsible for covering any potential shortfall in anticipated revenue for both the hotel and the conference center.
The agreement also includes provisions that any party can terminate the memorandum at any time for any reason.
Plamondon will also foot the $53 million cost of the 200-room hotel and corresponding retail component, per a December 2015 agreement between the city and Plamondon.
The 20,000-plus-square-foot conference center, parking and related public improvements will come from a combination of city, county and state funds, the prior agreement stated. The total public contribution under the new agreement is listed at $31 million in one place and $30.35 million in a different place.
The city of Frederick’s costs are estimated at about $5.95 million: $2.2 million in tax-increment financing or a “similar funding mechanism,” $3.5 million in cash and bond revenue from the city parking fund; and $250,000 allocated in the city’s capital budget, according to the agreement.
The county will also use tax-increment financing or similar mechanism to provide $2.8 million in funding, according to the agreement. The TIF allows the city and county to use a portion of the anticipated taxes generated from the project toward funding the development.
The Maryland General Assembly has also preauthorized an additional $15 million in its fiscal 2018 and 2019 budgets.
The Frederick County Council is scheduled to hold a public hearing and vote on the agreement Tuesday. The two state agencies are expected to review and vote on the memorandum at meetings within the next month, according to Richard Griffin, the city’s economic development director.
Plamondon can approve the document at any time, Griffin said.
The agreement must be returned to the General Assembly’s budget committees for a 45-day comment period once it is signed by all parties.
Assuming a $7.5 million appropriation from the state in both its fiscal 2018 and 2019 capital budgets, as well as a host of other intermediary milestones, a 20-month construction period could begin by July 2018, according to a project schedule in the agreement. The document does not specify a completion or opening date.
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.