Frederick's aldermen have no problem with extending an agreement with Plamondon Hospitality Partners while they examine the impact of the novel coronavirus pandemic on the hospitality industry and how it impacts plans to build a hotel downtown.
But several members of the board are balking at giving Plamondon more than $200,000 to help cover the costs to the company of maintaining parcels that make up the development site.
The aldermen were supportive of a request from city staff to extend an agreement with Plamondon to negotiate and finalize documents for the project to build the hotel along Carroll Creek. That agreement was set to expire on June 30.
The city and Plamondon fully intended to complete an updated memorandum of understanding and financing plan for the project before the June 30 deadline, according to a staff report.
But the coronavirus and the resulting states of emergency by the state, county and city have seriously disrupted the public and private financing sectors and the hospitality industry.
Now, the city and Plamondon are looking to extend the existing MOU through June 30, 2021 to let both sides sort out the situation.
The aldermen seemed supportive of the extension during a discussion at a workshop Wednesday.
Plamondon has spent $281,856 through the end of March to gain control of the development site, and expects another $130,957 through June to keep necessary purchase agreements in effect, Economic Development Director Richard Griffin told the mayor and aldermen.
Both sides want to keep the agreements intact, he said.
“In order for us to have a project, we have to have a development site,” he said.
Plamondon remains committed to the project, and is asking for the extension based on the pandemic's impact, which no one knew would be an issue 90 days ago, said Pete Plamondon, co-president of Plamondon Hospitality Partners.
“We've always taken the long view in terms of this project in downtown Frederick,” he said.
But several aldermen questioned a request to pay Plamondon more than $206,000 to help with the costs of keeping the agreements intact.
Alderman Derek Shackelford said he's hesitant for the city to put up money that it might not get back if something happens with the project, given the current state of the market and the hospitality business.
Aldermen Ben MacShane and Donna Kuzemchak also expressed concern about the money.
The city shouldn't take on a liability at this point, if they don't know they'll get the money back, Kuzemchak said.
Alderwoman Kelly Russell asked if there was a way to structure the deal so the city could get its money back if the project doesn't happen.
That would require new language to be put into the agreement, said City Attorney Saundra Nickols.
If a $70 million project needs $200,000 to make sure it happens, MacShane said he's not that confident that it will happen.
Plamondon objected to his argument, saying that the company needs the money to get the project to the point where they can get the private equity together to fund it.
Mayor Michael O'Connor asked the aldermen to think about whether there's any way to revise the agreement to make them more comfortable.
Alderman Roger Wilson asked his colleagues to reconsider their objections, and to consider adding a provision in the memorandum to provide for reimbursement to the city.
While he supports the proposal in its current form, he's willing to consider a reimbursement clause if it would make them more comfortable, he said.
“We're right at the edge of making this a reality,” he said.
Kuzemchak said she's open to other options.
“But it would have to be a heck of an argument,” she said.
O'Connor said the extension of the MOU with Plamondon will come up for a vote at a future meeting, but he doesn't want to bring the cost sharing proposal to a vote until there's more agreement from the board.