With a clear separation along party lines, members of Frederick County’s delegation have disagreed for years over using state money for a planned multimillion-dollar hotel and conference center in downtown Frederick.

But now, as three new delegates prepare to take office — one of whom has voiced clear support for the project — the group may enter the 2019 session with a different stance.

“I’m optimistic,” Frederick Mayor Michael O’Connor said of the potential for a more united front on the planned public-private-funded downtown hotel and conference center.

“We are trying to address what we think are the concerns — the separation of the sources of funds and the uses of funds — and make it really clear what the state money is going to support,” O’Connor explained. “We can articulate that the state money will be used to support public infrastructure. We want to lay that out in front of the delegation and see where they stand.”

Clearing up the funding breakdown

The funding breakdown O’Connor is referring to is a change in the project plans that developers Plamondon Hospitality Partners revealed in the spring of 2017 that ensured money from the city, Frederick County and the state will not fund construction of the physical hotel or conference center. Initially, public money was set to help fund construction of the conference center.

While the developer is set to contribute the lion’s share of the estimated $79.5 million cost, a total $16.5 million is set to come from the city of Frederick, Frederick County and the state for construction of public infrastructure, including land and on-site public parking, as well as related off-site road, utility, streetscape and creek area improvements. The revenue sources include tax increment financing, hotel tax revenue generated from the hotel itself, the city’s parking fund, and state grants.

Broken down, various city and county bonds and cash are set to provide $10.75 million, with the remaining $5.75 million slated to derive from state sources, which includes a $500,000 grant from the Department of Housing and Community Development and $5.25 million in state capital grants from the General Assembly.

Throwing a wrench in the plans, the money from the General Assembly is hung up with the Board of Public Works. The three-member group, which Gov. Larry Hogan heads, is required to release the funds and has not taken it up. Hogan has publicly voiced opposition to the state contributing money to the project, which has made the approval tricky.

O’Connor said he believes that state officials, including Hogan, may not have been properly versed on the current funding breakdown, or have doubts about the details, thus spurring the concerns.

“Because it doesn’t say that explicitly [the state money is not going to construction], there is some concern that the money could be used for other purposes,” he said. “We’re hoping to and are willing to work with the delegation to make application of the state funds more specifically.”

O’Connor also said that the funding set to come from the city and county is tapped out, and thus the state funding is needed to support the project in its current form.

“If we thought we could do it on our own, we would do it on our own,” he said.

Chance for more support from three new delegates

For years, the Democratic members of the city’s delegation have supported the state’s contribution to the project, while the Republicans have voiced opposition.

During the 2018 election, three new delegates-elect — Jesse Pippy (R-District 4), Dan Cox (R-District 4) and Ken Kerr (D-District 3B) — replaced three of the GOP members who were against providing the funding, thus giving some hope to the project proponents.

Last week, Pippy and Cox both said that they had not yet taken stances, while Kerr voiced support.

“Yes I support funding for the downtown hotel and conference center,” Kerr said. “It’s a piece of tourism in Frederick that’s missing.”

He added that he has not had discussions with the other legislators, though, and as a freshman delegate will not introduce legislation about it himself.

Cox said he has “obviously” heard about the project but had not discussed it enough to form a solid opinion on whether state money should be used. He said he wants to hear from the other legislators, especially Delegate Carol Krimm (D-District 3A), who was elected chairwoman of the delegation, as well as his fellow district representatives, Barrie Ciliberti (R-District 4) and Pippy.

“I appreciate the opportunity and I’m looking forward to working with everyone for the improvement of Frederick in every way,” Cox said. “I’m waiting for the delegation. I’ll wait to hear from [them] about [it]. I wasn’t part of any discussions that the delegation had prior. I don’t think I’m ready to speak on it.”

Pippy had a similar take.

“As far as the project is concerned overall, I think that is up to the city of Frederick and other businesses that are involved or want to be involved in that. As far as the public debt, I want to do what’s best for the taxpayer,” he said. “Ultimately I’m going to have to learn more. I haven’t been involved in any previous role. I am looking forward to learning more about it.”

Pippy also pointed out, like Cox, Ciliberti and Kerr, his district does not include the city of Frederick. He understands, however, that the project would have an impact on the county overall.

Veteran Republicans not budging on opposition

Ciliberti and Sen. Michael Hough (R-District 4) said last week that despite the new funding breakdown of the project, they still do not support state money going toward it.

Hough pointed out that while the public money is not set to technically go to the construction of the buildings, it is slated to fund parking, which in the current plan is to serve as the foundation of the hotel.

“Whether it goes to pay for floors one through two or the foundation and the garage on the ground, it’s not like we’re paying for a parking deck across the street and have a regular city parking deck. This is the foundation of the hotel that we’re building,” he said. “It’s the same. My position hasn’t changed, that the state government shouldn’t be in the business of funding the construction of privately owned and operated hotels. It’s the job of privately owned and operated hotels to operate their own hotels.”

He also pointed out that he is not against the project per se, and does not mind if city and county leaders want to use local measures to fund the project, but he does not believe state money should be involved.

And although he has made his position clear, he encouraged the new delegates to verse themselves on the matter and make their own decisions.

“The new members, I encourage them to talk to opponents and proponents and make their minds up,” Hough said.

Ciliberti pointed out that hoteliers such as Randy Cohen, who built the Hampton Inn & Suites on Opossumtown Pike and is constructing another neighboring hotel, are developing projects with no public funding assistance.

“Why should he fit the bill 100 percent, when others aren’t? I don’t care if they put a hotel downtown ... but not with taxpayer money, no,” Ciliberti said. “For me it’s no deal, no dice, no dollar.”

As chairwoman of the delegation, Krimm is responsible for corralling the other legislators on local matters. She has historically supported state funding for the hotel and conference center project and said last week that she has not yet contacted the new delegates about the matter, but plans to do so soon.

“I look forward to discussing it with them,” she said. “We just haven’t had the opportunity yet.”

She added that she does not know the stances of Pippy, Cox and Kerr, but that she knows Ciliberti and Hough have not been in favor of the state contribution. But like O’Connor, Krimm hopes some education and further discussions will help sway their opinions.

“Their previous positions did not support the previous structure. But there’s been a restructuring. I think that brings a new perspective and maybe new discussions on that,” she said. “As far as I’m concerned, I’ve been very consistent in supporting the hotel and state funding for the project. The money would not be going to the hotel it would be going to the infrastructure.”

The other members of the delegation, Sen. Ron Young (D-District 3) and Delegate Karen Lewis Young (D-District 3A), have both historically and consistently voted in favor of providing state funds for the project.

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(44) comments

jerseygrl42

Mr. Mayor, you are still" trying to address what we think are the concerns", how silly, this is real simple no matter how you break it down....the concern is TAXPAYER money being funneled to private business w/o asking the taxpayers in the city, county and state how they feel about that ...I for one do not think it is appropriate to give taxpayer money to a family in order to enrich them. If the hotel doesn't make fiscal sense w/o the taxpayers chipping in, ( for zero return I might add) then it should not be built....and this is really not hard to understand...other hotel operators in Frederick county don't seem to have the problem the Plamondons have.

KellyAlzan

The hotel is at the moment stalled. It’s stalled because the city refuses to let a private investor develop, build, and operate the hotel. If the city would have let a private investor in on the deal, construction would be no less than 50% complete today

mrnatural1

Kelly,

Are you saying there was one or more private investors who were willing and able to put up the add'l $16.5M and the city would not allow it?

I would think the city would welcome private investment. What am I missing?

mrnatural1

Some people continue to cling to the preposterous claim that our tax dollars ("our" = city/county/state residents) would not be used to build the proposed hotel.

That is demonstrably false. Quote from the article:

"....a total $16.5 million is set to come from the city of Frederick, Frederick County and the state for construction of public infrastructure, including land and on-site public parking, as well as related off-site road, utility, streetscape and creek area improvements. The revenue sources include tax increment financing, hotel tax revenue generated from the hotel itself, the city’s parking fund, and state grants.

Broken down, various city and county bonds and cash are set to provide $10.75 million, with the remaining $5.75 million slated to derive from state sources, which includes a $500,000 grant from the Department of Housing and Community Development and $5.25 million in state capital grants from the General Assembly."

*** "$16.5 million is set to come from the city of Frederick, Frederick County and the state..." *** That's all we need to know.

The source of the public money (TIF, hotel tax, parking fund) does not matter. It is completely irrelevant. Any and all funds collected by a state or local gov't belong to the people -- NOT private businesses and corporations.

The "hotel visitor tax"; "city parking garage fees"; "TIF tax revenue from the hotel"; and "state income and sales tax revenue generated by the hotel" is all money that a) absolutely DOES belong to us taxpayers, and b) would be generated regardless of how the hotel is funded.

IOW, the amount of business this hypothetical hotel generates will be the same regardless of whether it is 100% privately financed; 100% paid for with public funds (the source of those funds is irrelevant, it's gov't money -- OUR money); or some combination of the two. Potential hotel guests are not going to know or care.

This proposed deal reminds me of drug addicts who ask for money to "pay rent" or "put gas in the car":


Plamondon & the Randalls holding tin cups: "Excuse me mister, can you spare a couple dollars for the parking garage I want to build?"

Taxpayers: "Wouldn't that garage serve as a foundation for your proposed hotel and provide parking primarily for hotel guests?"

P & R: "Oh, that's completely unrelated. Don't pay any attention to that -- we just want to build a parking garage for the public good. We don't *need* to build a hotel. We can stop building hotels anytime we want. The money is for the garage..."


petersamuel

Mayor O’Connor thinks that “addressing concerns” will win support for the City hotel project. Fine. If he’s serious about this he should:

1. Explain how the City came to appoint as its “point man” for the hotel project none other than Mark Gaver, probably the biggest conman in the history of Frederick County now serving a well-deserved 17 years jail for his six year $50 million fraud.

2. Tell us why Gaver’s closed door mode of operation of the City’s Hotel Advisory Committee (HAC) in flagrant violation of state open meetings law was tolerated by the City for eight years.

3. Investigate the HAC’s shenanigans in the so-called ‘competed procurement’ of developer Plamondon under the previous Mayor. How come the HAC quietly dumped the site first, developer second or 2-stage procurement recommended by the City consultant and endorsed by the Board of Aldermen? How come Plamondon’s proposal was received by the City even before the RFP was issued? How come there’s a reference in emails to the City working off draft RFP written by none other than Plamondon? Why was the City Purchasing Department bypassed in violation of City rules?

4. Explain why the City after proclaiming the old Frederick News-Post lot as the best available site for the hotel it now finds it necessary to buy the neighboring Eagles property next door. Explain why Plamondon has been negotiating with the Eagles for land which the City plans to buy and own.

5. Make the case for the City building and giving the hotel developer an expensive engineered ‘podium’ slab for his hotel atop a basement City garage. Show why the taxpayer should assume the risks and costs of building in the dump that is the remains of two centuries of industry creekside. Spell out what this will mean for the finances of the City parking fund.

6. Give us a detailed capital budget for this project.

7. Get answers to the 25 issues raised by City planning staff in their letter “Re: Sketch Plan STF17-992SP for4 200 East Patrick Street” signed by Pam Reppert, City Planner dated December 18, 2017.

8. Explain why he keeps project managers who have obtained state grants, then have them expire because they we’re unable to get their act together…. project managers who love to generate project ‘milestone’ schedules and then disregard and discard those same schedules with impunity. Why not new project management?
Peter Samuel

mrnatural1

Quote:

"Hough pointed out that while the public money is not set to technically go to the construction of the buildings, it is slated to fund parking, which in the current plan is to serve as the foundation of the hotel.

“Whether it goes to pay for floors one through two or the foundation and the garage on the ground, it’s not like we’re paying for a parking deck across the street and have a regular city parking deck. This is the foundation of the hotel that we’re building,” he said. “It’s the same. My position hasn’t changed, that the state government shouldn’t be in the business of funding the construction of privately owned and operated hotels. It’s the job of privately owned and operated hotels to operate their own hotels.”

Quote:

"Ciliberti pointed out that hoteliers such as Randy Cohen, who built the Hampton Inn & Suites on Opossumtown Pike and is constructing another neighboring hotel, are developing projects with no public funding assistance.

“Why should he fit the bill 100 percent, when others aren’t? I don’t care if they put a hotel downtown ... but not with taxpayer money, no,” Ciliberti said. “For me it’s no deal, no dice, no dollar.”

~

I agree with Hough and Ciliberti. There is no good reason for taxpayers to help build a hotel.

If we did contribute, then as investors, would we be paid back with interest? Would we own a percentage of the hotel and share in the profits?

If the people promoting the hotel cannot convince banks and private investors to loan them enough money, why should we help fund it?


shiftless88

What do you know, there IS public tax dollars being spent no matter what burgess tries to keep claiming. And speaking of payback by TIF, how is the Jefferson Tech Park working out?

Burgessdr

Shiftless. None of your measly city or county taxes will be used. $3.0 million from hotel visitor tax (not YOUR taxes). $3.5 million from city parking garage fees (not YOUR taxes).   $4.0 million from city/county TIF tax revenue from the hotel (not YOUR taxes). $5.0 million from state grant paid for by state income and sales tax revenue generated by the hotel (not YOUR taxes).  $63 million in private and mortgage by the developer (not YOUR taxes)  It's not so hard to understand.

Comment deleted.
gary4books

How it works? I think not. My undergraduate degree was Political Science.

gary4books

"Ciliberti pointed out that hoteliers such as Randy Cohen, who built the Hampton Inn & Suites on Opossumtown Pike and is constructing another neighboring hotel, are developing projects with no public funding assistance." I think the Christopher's Crossing link to Monocacy Blvd that cost forty two million Dollars. is significant enhancement to Byte Drive and enhances its value as a location for a Hotel. If we can make it easier for a hotel in North Frederick with public state money, why not help downtown businesses?

gabrielshorn2013

You have it backwards Gary. The road wasn't built for the hotel, the hotel is being built because the owners saw a business opportunity because the road was being built. Quite a big difference between taking advantage of an opportunity, and having one specifically created for you. The former is fair, the latter is not.

gary4books

I do disagree. Help is help and that overpass is a significant contribution and is from state funds. Why be so opposed to state funds?

shiftless88

The point being, Gary, that the money wasn't spent to benefit a single developer.

pappyjoe

To hell with the room to room crime spree they want to build. We need our road infrastructure updated first with a simple task such as repainting lines on the road. County roads this year have idiots running you off for the lack of the idiots not repainting the lines. Thank you!!

gary4books

Why not both? And not "either / or."

jagman

The Plamondons and the Randalls want their payback NOW! It is the least the county, city and state taxpayers owe them for all their years of serving the public.

Of course, none of the stories printed the last several years have debated the traffic problem (in and out of the city) such a hotel project would create...if it were even mildly successful.

Lets hope the state drags their feet long enough for this project to either die naturally or find enough private money to proceed.

Comment deleted.
KellyAlzan

The story doesn’t mention Kelly or dick. But please vote for us in 2022 for council of the county.

Frayou

Just a place for local elite politians, government and business leaders to meet, eat and conference.

KellyAlzan

And to cheat on their spouses

Frayou

Feel its more about having an Social Club for the downtown elites to meet than anything else. Downtown Frederick is not the historical magnet which politicians & business leaders are suggesting as a potential cause to build a hotel & conference center. Overpriced restaurants, bars, and breweries are going to reach a points of saturation downtown , eventually, I’m afraid.

Crusty Frederick Man 64

Well, well, well, a updated article on the Hotel Project our City officials want so bad. How about a updated article on Cycle Fit and how that worked out for the City.

KellyAlzan

Let’s not forget the $89mil hotel in harpers ferry is all privately funded. And keep in mind, harpers ferry is beautiful. It’s breath taking. And easy access. And, it’s close enough in proximity to be a competitor to the downtown hotel

public-redux

I’ve looked at that stunning view for entire minutes.

KellyAlzan

Same

KellyAlzan

This hotel could be 50% through the construction phase by now if they had just found a private investor. And......there would be no need for competing hotels to have to support their competition through that silly proposed hotel tax.

politicians and people of Maryland: SAY NO TO THIS HOTEL USING PUBLIC MONEY

DickD

Hard to believe, but I totally agree with Hough. I just might have to change my opinion about him.

gary4books

I suggest that people new to the issue read both sides and decide. I have yet to be convinced that public support will not "prime the pump" and get the hotel running. I have been told that bed bugs will run over the are with a hotel. Also some say that other places are better for visitors. The visitors are here in Frederick. A hotel would be a courtesy and not just for the rich. It is no accident that most if not all who represent the city want a Hotel. And slander that they are "paid off" is hardly the best way to answer their support.

public-redux

" I have been told that bed bugs will run over the are[a] with a hotel."

Funny, KelllyAhlzan told me that a hotel would cause the city to spend a lot more on snow removal.

KellyAlzan

No. The hotel will cause stress to the sewer and water lines that are under the streets, from the increase in heavy truck traffic. Demolition and construction. As well as weekly vendor deliveries to the hotel.

public-redux

KelllyAhlzan also mentioned a big increase in the cost of picking up litter around the hotel.

KellyAlzan

Hotels are known for drug activity and sex crimes

public-redux

Sex criminals are litterbugs? Wow, the things I learn reading the FNP comments.

KellyAlzan

Amazing isn’t it!

public-redux

That factoid is almost as scintillating as your claim a while back that sewers would be damaged if, but only if, public funds were used in the construction of the hotel.

KellyAlzan

Thanks for following me. Glad you enjoyed.

public-redux

I'm still pointing and laughing.

jagman

If building this monstrosity would "prime the pump", private equity would be all over it. The very fact that is not the case should serve as a huge red flag. Lovers of big government, of course, would never be able to see those flags.

mrnatural1

Good point jagman. [thumbup][thumbup]

public-redux

I have to disagree if only because “priming the pump” specifically refers to government spending and/or tax expenditures. That term does not encompass private equity. That being said, “priming the pump” is generally something done during a recession, which we are not in now nor have we been since 2009.

MD1756

There are opportunity costs with this investment. I suspect taxpayer dollars would be better spent on other investments with a higher rate of return or how about fully funding core governmental responsibilities at all levels of state/local governments. Just a thought.

mrnatural1

Excellent point MD1756. [thumbup]

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