The Maryland Stadium Authority — long planned to be the conduit for bond funding for a planned hotel and conference center in downtown Frederick — voted unanimously against an agreement with the city and county.
Supporters of the $84 million project, which includes $31 million in public funding, sought bond funding through the Maryland Stadium Authority during the 2016 General Assembly session.
A five-party memorandum of understanding passed by a majority of the city Board of Aldermen and County Council last month laid out financing plans and a schedule for the project. The agreement still required approval from the stadium authority and Maryland Economic Development Corp., or MEDCO.
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 Hospitality Partners, the private hotel developer expected to foot the $53 million cost of the hotel, is the fifth party to the agreement.
Thomas Kelso, chairman of the Maryland Stadium Authority, issued a statement Tuesday about the board’s vote a day earlier not to sign the MOU.
“The Board and staff leadership expressed concern that its role in the project had changed significantly from when we first became involved,” Kelso wrote.
“MSA was not involved in either site selection or other crucial decisions in which we usually participate in project development,” the written statement continued.
“There is no owner for this project, and no financing. Even if there were, the current MOU has no clear role for MSA,” the statement said.
Pete Plamondon Jr., co-president of Plamondon Hospitality Partners, disagreed with this part of the statement. The memorandum clearly outlined a financing strategy and ownership, he said in a Tuesday phone interview.
Plamondon described the stadium authority’s decision as a potential “detour” but not one that would ultimately hurt the project’s outcome.
“I remain optimistic we’re going to find a path to success,” Plamondon said. “It’s just something we have to deal with.”
Plamondon said he could not elaborate when asked for more detail about exactly how project partners will deal with the change.
During the 2016 General Assembly session, state lawmakers pre-authorized $15 million from the state — bond funding from either the Maryland Stadium Authority or MEDCO — for the next two budgets. But funding must be in Gov. Larry Hogan’s proposed 2018 and 2019 budgets or added by the General Assembly.
MEDCO’s board in an October meeting tabled a vote on the memorandum amid questions about funding and feasibility, according to Bob Brennan, executive director of the state agency. Brennan said the organization at the time asked project partners for the latest feasibility study and more information about funding sources.
MEDCO had not received information on either topic as of Tuesday, Brennan said in a phone interview. A vote on the memorandum had not been scheduled for a future board meeting.
“If I don’t receive the information, we won’t be doing anything,” he said. “We’re just in wait and hold mode right now.”
Brennan did not want to comment on the stadium authority’s decision until he had more information about its rationale, he said.
Kelso said the stadium authority’s resources are stretched, given the number of projects and studies it is currently managing.
“The MSA Board believes it is best now, and in the future, to involve MSA in projects only where we have a clearly defined, lead role. This is the best application of our resources,” Kelso wrote.
He added that while the board voted unanimously against the MOU, it did not weigh the merits of the project.
“The Board was concerned solely with MSA's role,” Kelso’s statement said.
The new memorandum was required as a condition for the project to receive the $1 million appropriation included in the state’s fiscal 2017 budget. 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.
A tentative schedule included in the agreement when it was approved by the city and county expected that all parties would approve the agreement by Nov. 1. The state’s review was then to start Nov. 15, under that schedule.
The proposed hotel and conference center 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.
City, county leaders react
Richard Griffin, the city economic development director and key project organizer, referred all comment to the mayor’s office.
Comments from Mayor Randy McClement were included in a city statement Tuesday.
“The vote in no way changes our commitment to moving this plan forward,” he was quoted as saying in the release. “We’ve known from the beginning that this is a complex project, involving agreements between many different entities. We will adjust to this latest development.”
County Executive Jan Gardner was also quoted in the city statement.
“The county will continue to support the city in advancing this transformational project to support jobs, economic development and the vibrancy of downtown Frederick,” Gardner was quoted as saying.
State lawmakers react
On Tuesday morning, Delegate Carol Krimm, D-District 3A, Delegate Karen Lewis Young, D-District 3A, and Sen. Ron Young, D-District 3, said they were working on plans for alternate funding for the project.
“We are not wasting any time to rethink alternative strategies,” Lewis Young said.
She blamed the stadium authority’s decision on influence from a lobbyist who worked on behalf of Randy Cohen, who owns the FSK Holiday Inn and has opposed public financing for the proposed downtown project.
“I’m not totally surprised, because there is a lobbyist. A very powerful, influential and persistent lobbyist who has not represented the facts of this project correctly,” Lewis Young said.
Among other things, Lewis Young said the lobbyist, Bruce Bereano, misconstrues the level of public support for the project and whether it would compete with the Holiday Inn.
Bereano — who also represents Brad Kline, developer of a proposed hotel and conference center at Jefferson Tech Park — said the heart of the issue is whether private businesses should be forced to compete with other projects that receive significant public funding.
“That’s wrong. And I think the Maryland Stadium Authority thought it was wrong as well,” Bereano said.
Sen. Michael Hough, R-District 4, said he agreed with the stadium authority’s decision and hopes consideration of public funding for the project doesn’t come back before the county’s General Assembly delegation.
While he previously supported funding for infrastructure downtown near the hotel, including an additional parking deck, Hough said the most recent versions of the funding plans had become too unclear and details kept changing.
“It just seems like this whole thing was jammed through,” said Hough, who didn’t feel that state lawmakers were involved enough in discussions about the MOU.
Across the aisle, Sen. Young said he was also frustrated that the delegation hasn’t been more involved in discussions between the city, county and developer.
“The city seems to shut us out. They want us to get them money, but they don’t want us involved,” Young said, referring to the city’s elected members of the General Assembly. “... The three of us just can’t react every time something goes wrong. Maybe if we’re involved, we can keep it from going wrong.”
Nevertheless, he and the other members of the city delegation plan to continue pursuing funding options, he said.
“We’re going to try to come back with a plan to save this,” Young said. “If it doesn’t go now, it could be years.”