Every time Richard Griffin talks about the hotel and conference center coming to downtown Frederick, he makes sure to reiterate one thing: The city’s contribution to the project will be limited.

The city will use some of the property tax the hotel generates once it is operating to pay for the construction of parts of the hotel that will serve the public, said Griffin, the city of Frederick’s deputy director of economic development. It won’t use other city revenue, and it won’t pay for parts of the project that aren’t to the public benefit, he said again Wednesday as the Board of Aldermen discussed financing for the project.

That means the city will contribute to building the hotel’s parking garage and streetscape, which will be used by the public.

The city may also contribute to the portions of the conference center that the developer wouldn’t have constructed if it weren’t for the city’s request, but that is being debated by the city’s elected officials. The city has asked in its request for qualifications for the project that the developer build a 200-room hotel with 20,000 square feet of meeting space. Studies have shown that the model leaves a funding gap of about $10 million that will be filled by the city, local and state government grants.

A few of the city aldermen asked if the conference center portion of the project would truly serve the public.

Alderwoman Donna Kuzemchak said she wasn’t sure.

Griffin reminded the aldermen a few times that the business community has indicated that a conference center of that size is a crucial piece of the project. By developing the conference center, the city will attract a business and events crowd downtown it does not currently have, ultimately generating more revenue for the city, he said.

Planning commission makes way for school, fire station

The city’s Planning Commission is recommending to the mayor and board two rezonings that will make way for two future Frederick County projects — a firehouse and a school.

The fire station will eventually be built on the east side of Walter Martz Road, just south of the Tuscarora community. The station won’t be built in the near future, said Matt Davis, city planner. It isn’t yet listed in the county’s Capital Improvement Program, which includes programs to receive funding by 2020.

The school will be built on the Hargett Farm, on Butterfly Lane, to serve west Frederick. The Board of Education plans to construct the school in a few years.

Officials to talk Sharpe’s Flowers, electronic ads at bus stations

The aldermen will review a plan from a developer at their workshop at 3 p.m. Wednesday at City Hall that will replace Sharpe’s Flowers on Motter Avenue with a four-story building with senior living apartments and commercial space.

Some people living in the area are upset with certain elements of the project, such as the building height, design, setback and parking. The Planning Commission placed conditions on the project to try to ease the concerns when recommending the plan to the mayor and board.

But that’s not all. The officials will also talk about allowing electronic advertisements on the inside of bus shelters.

Send notes about your city government to Jen Fifield at jfifield@newspost.com.

(53) comments

Sallyforth

Since the blackbook scandal has the "escort" service rebounded enough to support a convention center? Politicians seem to calculate costs differently than ordinary citizens. They seem to have no concept of the fact that money they offer up as an inducement to private companies comes out of our pockets. It really is a ridiculous plan they have come up with and it really does not make any sense. It is nonsense.

jerseygrl42

tax money should support the hotel ONLY if a proportionate amount of the profit enjoyed by the owners is returned to the taxpayers annually...otherwise this makes NO sense/cents

averagejoe33

whatever happened to private business

OFMV

Heck, Let's just build it out at Crumland Farms. Any one have four tickets I can score to take my family to go sit inside the giant Garcia Circus tent within 20 feet of Hwy 15 with absolutely no guardrail protection from oncoming traffic? [unsure]

steven09

lol.....Technically, Crumland is now zoned residential. Although, across the highway, on the east side of 15, is now zoned industrial and would probably be okay zoning for a hotel.

I always wondered about Beckley's though. Not enough room there for a convention hotel, but it could be a prime commercial spot for a smaller hotel, or similar.

Comment deleted.
dr-wayne

Spammer. Block them

garden whimsey

We had a hotel in downtown Frederick and it went out of business because no one wanted to stay in downtown Frederick. I am a Frederick City homeowner and I don't want my City taxes used to fund a private business. If the Plamondons or Cohens want a hotel downtown, let them use their own money to fund it, not mine.

OFMV

[thumbup]

mayorofhagerstown

True, but that was 40 years ago when it was sold. Times have changed and so has downtown Frederick.

elymus43

The Pole Dancer would probably in MORE REVENUE than the new hotel and convention center????

OFMV

ROFL. The Donald Called. Says when his jet lands our airport he's planning on suing the city and Plamondon for failing to give him a chance to take advantage of the taxpayer backed TIF bonds. Better to cancel the plans now as I heard he declares bankruptcy on a hotel or casino property at least once a year. [beam]

Extra Ignored

I don't think they've finished the longer runway at Frederick Airport.

Is The Donald going to be able to land his 747 there.

OFMV

Uncomfortable as it may be, The Donald must have a smaller plane as he actually does fly in to Frederick airport where his driver takes him to his new golf course in nearby VA.

Extra Ignored

Are you saying Frederick city spent millions of dollars to build a control tower and the FCC is spending hundreds of thousands of dollars a year to staff that control tower so The Donald could land is Learjet and take a car to play golf in Virginia.

Why should anyone even be a bit surprised.

I hope The Donald buys at least a few gallons of fuel while his plane waits at the airport.

sue1955

OFMV, great comments today. You hit the nail on the head with solid analyses and facts. You and I think alike.

I commented on this downtown hotel issue when it was the subject of previous FNP articles. I do not think that there is enough of a requirement for conference space as the city government likes to present. The Federal Government stopped most conferences in the last few years. Also; as I previously stated, Frederick is not far enough away from a lot of employees' workplaces (e.g., Rockville) where official travel would be allowable. Any VIP conferences (not necessarily Fed related) and galas are only going to involve the top luxury hotels in the District (D.C.) itself. Celebrities involved with anything there are not interested in coming to Frederick. In addition, conferences that for medical doctors, for example, are held in Europe or other glamorous locations.

Hotel guests are not interested in dealing with parking garages themselves, either. At top hotels in city settings, hotel staff go get your car for you and take it back to the garage. There are also bellman to take your luggage. You are not schlepping a heavy suitcase (or more) from a parking garage to the checking-in desk.

I really think that if this hotel becomes reality, it will not be successful. I think that it's being pushed by the city government to please the mayor since he wants it. It could be that the employees have to prove that they are being "proactive," "creative," and "forward-thinking" to the satisfaction of the mayor. The fact that the Frederick citizens should come first, etc. is not cared about.

OFMV

Sue, Thank you. Your descriptions of travel and conferences and hotels are spot on. Trying to be serious and share what you and I know to be true and get others to listen is a challenge. I'm willing to stand on my head and make joke if that's what it takes. It's no laughing matter to taxpayers. This is a huge gamble with taxpayer monies and it has FAILURE written all over it. [sad]

sue1955

Thank you for your kind words, OFMV. I was a Federal Government employee for 37 years and retired in 2010. I participated in many conferences, was involved in reviewing conference plans, and audited many such actions. I traveled for fourteen years, nine months a year. I traveled with one or two Special Agents in Charge (SAIC), depending upon the trip. I have known and, still do, people in the private sector and know what their expectations are of hotels and competent service. I saw, first hand, what Government people at all levels expected and got. It was a real education and a lot of fun, too, traveling with SAIC. In retirement, I still keep up with the subject.

Your humor is great. I look forward to more of your commentary.

steven09

First, I agree with the concept of a downtown hotel. It will perpetuate tourism downtown and thus add to the MPC economic multiplier that I've mentioned before.

The area is woefully short on quality meeting space. Hagerstown, for instance, has more. It also brings tourism within the City itself. All other hotels in the area are outside City limits.

That being said, this is an issue between two local families, and a few hotel owners on the sideline. The Plamondons, who we all know and appreciate, have made a play to put a full service Marriott downtown. This is almost assuredly the winning bid and has the backing of the FNP, because the Plamondons would be buying the former FNP site for the hotel, as well as many politicians and business leaders who have long worked with the Plamondons.

The other, lesser known but perhaps wealthier, family is the Cohens. The Cohens are less visible in Frederick, but they are still major league players. They own the Hampton on Opossumtown Pike and now the FSK Holiday Inn, as well as several hotels in Hagerstown.

Here is where it gets a bit muddled. Although the Cohens own the Hampton and their hotels in Hagerstown, they are actually managed by the Plamondons, except for the FSK Holiday Inn. That hotel is far to close to the Plamondons' properties on Rt 85, and thus is managed by a different hotel management company.

But there's two more levels of complexity here. First, a downtown convention hotel will directly compete with the FSK Holiday Inn, which has long had the best meeting space in the Frederick area and its only full-service hotel, and its only convention hotel.....till now.

Each hotel will have advantages. For instance, the Marriott will be within walking distance to the downtown and all it offers. The Holiday Inn, if it remains a Holiday Inn after the renovation, will offer price points like free parking, and probably more affordable rates.

So.......and here's the kicker, there has been talk of using a portion of the County's hotel occupancy tax, currently at 3%, to help fund building portions of the downtown hotel. Is this right?

Here, you would be asking hotel owners like the Cohens, and other smaller hotel owners, to send a portion of their room rates to fund building their new, biggest competing hotel.

Really?

Then, after the new downtown hotel is built, the other hotels in town, after paying for a portion of the new hotel, would conceivably have to reduce their rates in order to compete with the hotel that their funds help built.

That is not a free market system. Not at all.

On Saturday, I overheard two women gawking at downtown Frederick during the High Wheel Bike Race. Their question went exactly like this. "But would you really want to live downtown?"

Answer, "No. I wouldn't want to pay the taxes."

And anyone that lives downtown knows that is true.

So here is the issue. A downtown hotel would be great for the downtown economy. It should not be built, not even a portion, with the hotel occupancy tax. Nor should it be built with an increase in City taxes or user fees, like parking tickets or trash fees. (Richard Griffin is only partially correct, BTW. As a new hotel would increase services like trash disposal. Our current County hotels do not do a very good job of recycling.)

Can City officials afford to build it without these revenue streams? If so, I'm fine with it. If not..........

Extra Ignored

You can't move Frederick to Hagerstown.

A Hagerstown location would be more convenient for people coming from West Virginia and far Western Maryland.

A new venue would make no difference.

steven09

West Virginia is not a big convention destination.

Neither is Hagerstown for that matter.

Frederick should do better than either of those, in theory. Trouble is......with the economic models.......Frederick should demand a higher price. But will it?

rbtdt5

A hotel will be great downtown.

Comment deleted.
Extra Ignored

The king is just dating so a malt shop is all that is needed.

jls1843

For those saying that Marriott & Hilton are going to build this hotel, you are mistaken. The hotel will be a franchise property and will be run by a hotel management company. So just to correct all of you it's not Marriott or Hilton asking for the public/private partnership.

I would also urge you to do more research about the Tourism industry and the kind of money and tax dollars it can bring to the community before you go ranting about how bad this will be for Frederick.

This is needed and it will be successful.

Extra Ignored

Then you should pick up the tab, not the tax payers.

Extra Ignored

A small hotel to accommodate tourists is one thing, a conference center another.

Las Vegas was one of the hardest hit areas during the recession because recreation and training are some of the first spending that is cut.

Now the feds are reducing office space per employee.

Also no more $16 muffin & coffee meetings for feds.

OFMV

There's nada. Nothing. Everyone throws a dollar in the hat for coffee and cookies. Retreats and meetings are held in house. Right or wrong, the tea party, the press and sequestration have prevailed.

alovelyplace

Global corporations like Marriott and Paris Hilton do not need a taxpayer TIF bond to build a new hotel. Snap out of it Frederick City Leaders. Please erase that glazed over look in your eyes and get back to making the citizens your number one priority. Lease the pad site and be done with it.

OFMV

Just off the phone with Paris Hilton from her Yacht in Monte Carlo. Says she doesn't need our piddly tax dollars or Richard Griffin telling her how big a hotel to build and where but noted she generally locates them next to corporate headquarters and Institutions like NIH and Hospitals. Are there any of these downtown?

steven09

lol......Cute, but it's much more about the Plamondons than Paris Hilton.

BTW, now that there will be no hotel on base, Ft. Detrick could be a major client.

Which is ironic because, as stated above, it would take away from the Cohen-owned, Plamondon-managed, hotel on Opossumtown Pike.

OFMV

Here's a bigger picture idea. Having lived along Carroll Creek in Baker Park, my son and I strolled nightly up the creek walk and one block along Patrick to the Fair. It's a short walk with much to see in between (imagining businesses) and the 'end' of the stroll. Given this, why haven't our City leaders approached the investors of the Frederick Fair to add a small convention center building near the front entrance of the property, thus encouraging year-round use of the grounds and parking? And what if City leaders approached Morning Star with a tax incentive to relocate this last industrial company out of the immediate downtown area as Dairy Maid on 7th street now has? Would this not be the perfect location for bright shiney new hotel? Great traffic approach in and out, parking and multiple venues next door? A stroll into town and stops at restuarants and businesses along the way for tourists and business travelers. Why invest millions in TIF bonds and ongoing subsidies to build a hotel and conference center and parking to compete with what enterprising investors may ultimately build (before those bonds are ever paid) just two blocks away?

OFMV

If you build it, who will come? I keep asking this question. I have yet to visit a new government building (ex. ATRF -Riverside) or corporation that does not have multiple accommodations for 'in-house' conferences. To put it simply, there's no place cheaper than home. Who does the Mayor and Alderman KNOW for certain that their conference center consumers will be?

steven09

You are asking for guarantees here, and there are no guarantees in the business world. All the numbers they are crunching are based on economic forecasts that may or may not be correct.

This is a plan that originally started out as a 10,000 square feet ballroom at the location where the Hovnanian condos are now. It has since morphed into a 20,000 sq ft. space that is more suited for small conventions.

A 20,000 sq ft facility would be meant to accommodate statewide and regional meetings, events and trade shows. In short, it would compete with places like Hager Hall in Hagerstown.

While I applaud the suggestion, the Dairy Maid location is simply too far from the highway, from a major hotel chain's perspective, and a bit far from the Ever Ready Square, Patrick St, Carroll Creek corridor that would most benefit the City.

Extra Ignored

There is space at the Tally Rec Center. There are meeting rooms on the second floor, a commercial kitchen, and a large "gymnasium". Weddings are held there. See page 38.

The city still hasn't paid for the golf course that was constructed in 1991. They are in debt on the stadium, Hargett Farms, and Carroll Linear Park. Enough is enough.

http://md-frederick.civicplus.com/DocumentCenter/Home/View/367

steven09

Surely you jest.

Not about the golf course.

But the Rec Center? SMH Extra just lost all my respect on this subject.

trashboat

I still don't know if the City of Frederick is doing this for the so called "money", or actually because they want a hotel in downtown.

Extra Ignored

When I had meetings at hotels the room was free but you paid for the food.

Holiday Inn has a conference center. What is the demand for its use.

Just building another white elephant.

jls1843

Have you been into the Holiday Inn recently??

Extra Ignored

Nobody has. That is why a conference center is not needed in Frederick.

Extra Ignored

The improvements to the Carroll Creek Linear Parkway, city golf course, the baseball stadium, and the parking deck on Carroll Street will all benefit the hotel.

When you go to the National Aquarium in Baltimore you have to park many blocks away, this parking deck is plenty close and convenient.

The city doesn't need to provide any other assistance.

soule1061

But don't you see? This is how socialism works. Enterprises are not intended to be financially viable or solvent. The mere idea of "profit" is anathema. The important thing is that a hotel/convention center would provide jobs for people (very few, actually). It is expected that the hotel's losses would be covered by the City -- and ultimately the taxpayers. Of course, anybody with taxable income is considered to be "rich".

MCEDDE21

This is not "socialism" under which the state owns the principal means of production. It is not even vaguely "socialist", in the sense that this limited enterprise fails to share the profits and losses equally among the parties. This is a public/private "partnership" in which one side is always guaranteed to absorb the losses, while the other side is guaranteed to make all the money (if successful).

From your comment, though, I think you'll agree that the likelihood of success with this project is remote.

OFMV

[thumbup]

OFMV

Who's payroll is Richard Griffin on? Which Aldermen, Mayor or BoCC member wants to be remembered annually at budget time of the debt service on a sinking downtown enterprise that was built long before needed or must be converted to a casino to make ends meet? Voters certainly won't forget you. Now is not the time for building big shiny buildings to make us feel good about ourselves. There are too many of our citizens in need of jobs and basic services, government and contracts are cut too slim, outside meetings and retreats ended. Celebrate all that's good about Frederick and wait and save for the future instead of gambling it on risk. [sad]

OFMV

Cheaper isn't better, It's destructive when it comes to attracting conferences. A higher tax rate is like a high tide. It prompts a higher regular nightly rate by the hotel which prompts a review and higher GSA rate, which attracts conference organizers for government, academia and contractors who adhere to those rates.
In Frederick County/City the GSA rate for lodging is $95.00 + 3% hotel tax.
In neighboring Montgomery County the GSA rate for lodging is $225 + 7% county and 2% Municipal.
I just booked a GSA rate room in Philadelphia for $163.00 + 8% + 7% tax. Taxes had no impact what so ever on upon the decision to attend and participate in the conference.
Compare the rates: http://www.gsa.gov/portal/category/100120

OFMV


Insights from Industry Experts:
3. Meeting Facilities Lose Money

It is hard to be absolute, because there are real-world exceptions to virtually every rule; however, even in the rare cases where revenues cover operating costs in meeting facilities, they never cover debt service. For example, in San Francisco the Moscone Center brings in about $10 million per year in revenue. Operating expenses, on the other hand, are currently running at about $13 million per year. Thus, there is a "planned deficit" of about $3 million annually. On top of that, this year's debt service will be about $20 million, creating a structured deal that is designed to lose $23 million per year for the City of San Francisco.

The profits from a convention or conference complex come from renting hotel sleeping rooms. What may not be observable in an integrated private conference center is that there is an internal subsidy occurring between the meeting facilities and the overnight accommodations. In a large-scale public convention center in a community of hotels and other tourism-supported businesses, a more complicated means of subsidization must be created. This is typically accomplished by a tax on the hotel sleeping rooms, variously referred to as the "bed tax", the
"transient occupancy tax (or TOT)" or simply the "hotel tax".
http://www.hotel-online.com/Trends/ERA/ERAImpactConventionCenters.html

Dwasserba

Thank you for this practical and lucid comment.
They're hellbent.

MCEDDE21

From the article you quoted: ""The profits from a convention or conference complex come from renting hotel sleeping rooms. What may not be observable in an integrated private conference center is that there is an internal subsidy occurring between the meeting facilities and the overnight accommodations."
Of course! This is ALWAYS the way: The corporation takes the profits and the taxpayer covers the losses. Why is it so hard for people to grasp this simple fact?
I could throw up every time I hear a politician advocate public/private "partnerships".

steven09

The Moscone Center is a publicly owned facility. A nice one, I might add, that has been enlarged over the years and, as you mention, helps to drive the San Fran hotel industry.

That wouldn't be the case here. In this case we would be using public funds to help a private development.

The difference is that there would not be an operating loss each year, just an initial investment. That investment would pay off, but it might take years and it might do it on the backs of other local hotels.

OFMV

And, like LA, I believe the surrounding hotels affiliated with it in the district collect a piggyback tax onto the state and muni tax to help support it. Is that in the 'plan' here?

steven09

LA is a totally different matter. They also gain from USC and the stadium.

OFMV

Buy tax, I mean the per night room rate tax collected from the guest/conference organizer.

steven09

Conference organizers make revenue from registration and trade show fees. Only the largest get a kick back from hotels. That is not the case for the smaller, regional conferences that Frederick attracts.

Not even events in DC or Baltimore rate that. Only a very few of the largest, in cities that depend on that revenue, like Chicago, Las Vegas and Atlanta, and even then, only the largest events in the country.

OFMV

By not buy.

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