The proposed hotel and conference center in downtown Frederick projects to create $1.5 billion in new spending in Frederick County over the course of 25 years, according to a new study released Thursday.
Rick Weldon, chief executive officer of the Frederick County Chamber of Commerce, presented the study to chamber members and posted the report on the chamber’s website. He said he plans to present it to both the city and county governing bodies in the next month, calling the hotel the “most important economic opportunity we have seen in a long time in the city of Frederick.”
The last study on the hotel project was done in 2012, but many factors of both the project and Frederick County have changed since then. The number of rooms planned for the hotel increased from 200 to 230, and inflation has risen 22 to 28 percent in the Washington metropolitan region, making the project more expensive, the report states.
Totaling $93 million in cost, the hotel would also have 115 underground parking spaces, a rooftop restaurant and bar, and several meeting spaces, which Weldon said the county is sorely lacking.
Now, large meetings and events that could happen in downtown Frederick often happen in places such as Bethesda and Gaithersburg, Weldon said. This hotel, which will be serviced by Marriott, would be the only hotel and conference center in downtown Frederick.
Linda Morgan, president and owner of Support Unlimited, said that she has many clients who travel to Frederick and want to stay somewhere downtown.
“Our downtown needs this,” she said. “We are missing out on a tremendous amount of opportunity.”
In the Frederick market, there are 23 hotels, which have a combined 2,462 rooms. On average, those hotels are 25 years old, according to the study. The study found that the downtown hotel would not compete with those hotels. In other words, it would not take any customers away from them.
The impact study, completed by Hunden Strategic Partners, a real estate development advisory firm, also said that the city and county would collect a combined $61 million in taxes as a result of the hotel over the 25-year period, and the hotel would support 391 new jobs.
The aforementioned $1.5 billion in new spending in Frederick County includes indirect and induced spending. Indirect spending is money that the hotel itself spends in the community, such as purchasing local linens. Induced spending is money spent by people in the community who might have a higher income as a result of the hotel, such as a waitress who earns more in tips. The direct spending, by those of visitors at the hotel themselves, is estimated to account for the remaining $882 million over 25 years.
In the first year, the hotel is projected to generate more than $17 million in gross revenue, and over $22 million by its fifth year, according to the report.
While he acknowledged that many people have been and will be opposed to the project, Weldon said he has the full support of the Chamber of Commerce, especially its 38 largest employers that have put their support in writing, including AstraZeneca, Frederick Community College and Wells Fargo.
The hotel is slated to be built along Carroll Creek, at the former site of The Frederick News-Post at 200 E. Patrick St.
The project has had drastically different levels of support and has been an uncertainty in recent years. Last legislative session, the Board of Public Works failed to vote to release $5 million slated for the project, which caused the city, county and private sectors to explore new solutions.
Still, Weldon remains optimistic.
Weldon said the project has been a long time coming, and the city has long been preparing for it, with projects such as the creekside condos, the amphitheater and the C. Burr Artz Public Library. These projects have paved the way for a downtown hotel with a large event space.
“This is the largest economic development project in Frederick County,” Weldon said.