Whether $5 million promised to the city of Frederick for a downtown hotel and conference center has a chance of being spent this year, depends on whether you’re talking to an optimist or a pessimist.
After 12 years of negotiation, Rick Weldon, president of the Frederick County Chamber of Commerce, tends to believe that movement on the hotel has to be coming.
“I’m forever the optimist when it comes to this project, so, yes, 2019 is the year,” Weldon said in a recent interview.
For years, elected officials have debated and battled the topic of investing state money in the construction of a private hotel and conference center near Carroll Creek Linear Park, which has included a hotel component in its master plan since the 1980s. A recent rebranding of the project as an infrastructure investment — where the city, county and state would finance the parking, road, utility, streetscape and creek area improvements — rather than a private development, sought to finally move the funding forward, but so far has not.
As state grants begin to expire and another budget cycle looms ahead, there is concern the city may never claim the money it has worked to secure.
Frederick County has accumulated $5 million in the state coffers for the downtown hotel and conference center project, but the Board of Public Works has never voted on whether the money can be spent.
The state’s top three budget officials — Gov. Larry Hogan (R), Comptroller Peter Franchot (D) and Treasurer Nancy Kopp (D) — comprise the Board of Public Works. They are the gatekeeper between the money the General Assembly approves in the state budget and what is ultimately spent.
In the last year alone, the Board of Public Works oversaw the release of more than $7 billion.
Hogan has broad authority over the projects placed on the board’s agenda. This has become a source of frustration for city of Frederick Mayor Michael O’Connor (D), who has never been able to sit down with Hogan to explain the infrastructure project and instead has been left to guess what changes are needed for construction of the hotel to begin, he said.
“We believe that we are responding to the concerns that we’re hearing. ... Until someone actually does something at the state level to take forward progress, we’re trying to be responsive to concerns we’ve heard,” O’Connor said.
The city clarified language attached to the $5 million to make it clear the state’s money would only go toward public infrastructure and not the private development of the hotel or conference center slated for 200-212 E. Patrick St.
In June 2018, the city also drew a distinct line between the developer — Plamondon Hospitality Partners — and the city, county and state’s investments in the project by re-writing a Memorandum of Understanding and removing any public money from the conference center. This reduced the public share in the project from $31 million to $17.5 million, The News-Post previously reported.
Still, the Board of Public Works has not put the project to a vote.
A spokeswoman for Kopp said the treasurer did not set the agenda and could not provide insight on why the downtown hotel and conference center had not yet been considered for a vote. A spokesman for the comptroller similarly declined to comment, and said, as a matter of practice, Franchot does not comment on items before they arrive at the board.
The Office of the Governor was also tight-lipped on what needed to be done to put the project to a vote.
Shareese Churchill, a spokeswoman for the governor, said, “This item is currently under review and the timing for inclusion on the Board of Public Works agenda has not been determined at this point.”
Receiving no formal commitment to consider the project at the Board of Public Works this year, however, was not concerning to Richard Griffin, who has served as the director of economic development for the city of Frederick for the past 17 years.
Griffin said it was neither atypical nor out of character for the board members to not provide specific information on when they may act on a project.
“We’ve done a lot of things to be certain we’re checking all the boxes and satisfying the needs of the administration and Board of Public Works to support the project,” Griffin said.
The red veto
One unchecked box may be putting an “R” behind the name of one of the project’s supporters.
The Frederick County state delegation is split down party lines on the use of public funds in the project. More of them support the downtown hotel — and the economic benefits it could have for tourism — in a concept, but the sticking point for Republicans are how and to whom the state’s money will ultimately be distributed.
“We have been told that the failure to get at least one Republican represents a mark against us, but I can only explain the project so much,” O’Connor said.
Some of the opponents still had questions of who would control the parking infrastructure and the schedule to collect fees from it. With none of the Republicans representing the city of Frederick, however, it seems to give a lot of veto power to one party, O’Connor said.
Sen. Michael Hough (R-Frederick & Carroll) has been one of the most vocal opponents of the downtown hotel project.
Hough tried in the 2019 legislative session to defund the state’s existing $5 million commitment by striking the money from a bill dealing with the prior authorization of state debt. His amendment was rejected by the state Senate.
“There’s no doubt in my mind that he would not now, or ever, support state funds going to this project,” Weldon said.
There was hope, however, that the city could persuade its newest members of the delegation to support the project. Freshman Republican Delegates Jesse Pippy and Dan Cox each said separately in interviews that they support a hotel being built in downtown Frederick, but not with state funding.
“I love the idea of a downtown hotel, but we have to make sure it can stand on its own, financially, with developer funds,” Cox said.
Transparency of how and to whom the $5 million is distributed and establishing a way to guarantee that the money would be used for the public infrastructure, are important to Cox. He also needed assurance that taxpayers would be protected in the long-term, if the project somehow failed.
Pippy said he was still having a hard time understanding how the developer needed $10 million to $15 million to complete the project. His understanding also wasn’t aided by the city decision not to bring the project to the full delegation for a vote of support in the 2019 session, he said.
“I have a responsibility to the taxpayers before signing off or supporting public debt. There has to be public need or public good,” Pippy said.
“The bigger issue is whether the governor, comptroller or treasurer feel it’s a good enough project that they release it,” he said.
A ticking clock
The city of Frederick would like to begin design and construction of the infrastructure for the downtown hotel and conference center.
The project remains a regular topic of interest for other downtown developers with a pipeline of $150 million of economic development for the east side of the city, Griffin said.
Frederick County has until June 2021 to show it can match the $5 million already approved by the state, and the state cannot terminate the grant for another five years, until June 2026.
The city has missed other grant opportunities. It lost a half million dollars from the Department of Housing and Community Development in 2018 and another $350,000 grant in 2017 due to funding delays.
The city could reapply for those funds, but it is a competitive grant process, Griffin said. If the city of Frederick continues to sit on the money, because it cannot access the larger pool of state money, its application may not be competitive.
If the city could get the Board of Public Works to release the $5 million and the General Assembly to approve an additional $2.5 million pre-authorized in the next fiscal year’s budget — bringing the total funding up to $7.5 million — then the project would have “almost enough to put shovels in the ground,” Weldon said.
Even $7.5 million, however, may not be enough.
The city would like $10.5 million from the state to facilitate two layers of parking infrastructure and a greater return on investment, O’Connor said. The $5 million will cover a single layer of parking beneath the hotel, which the city of Frederick will own, operate and collect revenue from as it does from the other downtown parking infrastructure.
“If we could only get a total of $7.5 million, we have to go back to the project and say, ‘Do we think we can get the $3 million we need?’ or re-scope the project,” O’Connor said.
Any adjustments made to the scope of the project will affect the amount of revenue the city will get back in parking, hotel tax and the subsequent tax increases from improvements to the area, O’Connor said.
Time, Weldon says, is just as important of an issue.
“I think there is a clock. I think that clock is ticking loudly, and I think that clock could run out on us,” Weldon said.