Downtown hotel 1

An artist’s rendering of the downtown hotel and conference center project, as viewed from the northwest corner of Patrick and Carroll streets.

ANNAPOLIS — As the cost and scale of the downtown hotel and conference center project are decreasing, more questions were raised in Annapolis by Frederick County lawmakers who are slated to vote for or against a bond to support the proposal on Friday.

The Frederick County General Assembly delegation met Wednesday morning with representatives from the city and county, and an economist hired by the city to conduct an analysis of the project, in an effort to answer any remaining questions before Friday’s vote.

“I don’t think anyone in this room is against a downtown conference center. Let’s make that clear,” said Delegate Kathy Afzali, R-District 4. “We’ve all voiced some concerns and voiced some questions that we want answered today.”

Some members of the delegation have said pegging local leaders to specific numbers and concepts in the proposal has been difficult, and they wanted all the information possible before Friday’s scheduled vote.

The county lawmakers are considering whether to throw their support behind a bill being drafted by Delegate Carol Krimm, D-District 3A, that would grant $17.8 million in bond funding from the Maryland Stadium Authority to help finance the proposed project, which would be built at the former Frederick News-Post site in the 200 block of East Patrick Street.

The bond bill represents the largest chunk of public funding for the proposal, which is now projected to cost about $69.8 million after an updated budget was created by the city late last week.

About $44 million of that cost will be paid by the hotel’s developer, Plamondon Hospitality Partners. The rest would be a combination of city, county and state funding.

The plan contemplates $14.8 million in bond funding from the Stadium Authority, which found that the project would be sustainable with up to $17.8 million in financing, the figure in the proposed legislation.

The decrease in project cost came after the city and other partners made the decision to strip the funding and costs of a sixth downtown parking garage, which will move forward separately, said Richard Griffin, the city’s director of economic development.

Other questions remain in the budget, including a $3.3 million hole where the city and county hoped to use 1 percent of a 2 percent increase in the county’s hotel tax to create a capital projects fund at the Tourism Council of Frederick County, which receives most of those tax dollars. Initial deposits to the fund would have supported the downtown hotel and conference center, said John Fieseler, executive director of the council.

The five Republican members of the delegation voted last month to cap the tax at the current rate, 3 percent, to keep the money from being diverted to the downtown hotel. Charging other hotels’ customers to help build a competing business wasn’t fair, the lawmakers said.

Wednesday morning’s meeting was intended as a worksession for lawmakers, but a handful of invited attendees were also allowed to speak and ask questions.

Sage Policy Group CEO Anirban Basu, who wrote an economic analysis of Frederick County real estate that supports the hotel project, fielded questions.

While downtown Frederick is widely viewed as an economic development success story, Basu said lawmakers should consider it still “a work in progress.”

Delegate William Folden, R-District 3B, asked why the project couldn’t be successful solely through private investment, and asked other questions about the hotel’s viability.

Basu said he believes the scale of public-sector involvement in the project is appropriate, and such bonds are attractive because they are essentially a less-expensive form of financing.

One of the most vocal critics of the project, Randy Cohen, spoke about fairness.

Cohen said he had been interested in pursuing the downtown hotel project himself, but after years of failed proposals from the city, he chose instead to invest in his current hotel and conference center, the FSK Holiday Inn.

The debate has highlighted rifts between county lawmakers and business owners. Cohen and the Plamondons are partners on a different project, and Cohen’s family has a long history with lawmakers who now support the downtown hotel despite his objections.

Afzali asked delegation members to try to see eye-to-eye on the issues, without sniping at one another.

“I think everyone is on board with a downtown hotel. I think everyone wants to see something wonderful happen in that spot,” she said. “There are some of us who have concerns about using public money for the conference center piece of it. ... Maybe we could all give a little and come up with a plan that we can get everybody on board with.”

In a last-minute wrinkle, Delegate Karen Lewis Young, D-District 3A, said she may consider brokering a compromise version of the bill, but wanted to speak with municipal lawmakers first.

Delegation members have said they would vote on the Stadium Authority bond bill on Friday at their weekly meeting.

The proposed hotel would be on the property at 200 and 212 E. Patrick St., which is currently owned by a business entity formed by members of the Randall family. The Randall family also owns the parent company of The Frederick News-Post.

Follow Danielle E. Gaines on Twitter: @danielleegaines.

Downtown Frederick Hotel and Conference Center Project funding sources

Details from a Feb. 4, 2016 revised budget for the downtown Frederick hotel and conference center. The revised budget removes funding and costs of a sixth parking deck downtown, which will be constructed separately. All cost estimates include a 5.5 percent contingency.

Downtown hotel funding sources Contributions
Private funding sources
Plamondon Hospitality Partners $44,120,241
Public funding sources
Maryland Stadium Authority bond $14,985,723
City Tax Increment Financing (TIF) bonds $2,200,699
County Tax Increment Financing (TIF) bonds $2,799,301
City of Frederick parking fund $1,066,250
MD Smart Growth Impact Fund grant $850,000
2012 State of Maryland bond bill $250,000
City of Frederick CIP matching funds $250,000
Frederick County hotel tax• $3,300,000
Frederick County capital parking fund•• $0
Total private funding $44,120,241
Total public funding $25,701,973
Total estimated project cost $69,822,214
•A bill pending in Annapolis would cap the tax rate, causing this funding to be unavailable if the bill is passed.
••This funding source was included in previous budget estimates, but has been removed.

Downtown Frederick Hotel and Conference Center Project revised budget

Details from a Feb. 4, 2016 revised budget for the downtown Frederick hotel and conference center. The revised budget removes funding and costs of a sixth parking deck downtown, which will be constructed separately. All cost estimates include a 5.5 percent contingency.

Project Cost estimate Funding source
Land acquisition $3,553,091 Maryland Stadium Authority Bond, and Department of Housing and Community Development Strategic Demolition and Smart Growth Impact Fund
207-room hotel $40,756,525 Private developer
Historic renovation, reuse of railroad building for retail $3,363,717 Private developer
24,000-square-foot conference center $11,681,172 City of Frederick Tax Increment Financing, State of Maryland bond bill, Maryland Stadium Authority bond, any increase in the Frederick County hotel tax
Public off-site improvements (roads, streetscape, utilities) $1,025,460 Maryland Stadium Authority bond
Parking 1 (100 public below-grade parking spots at hotel) $3,376,000 Maryland Stadium Authority bond
Parking 2 (250 additional parking spaces at to-be-determined location) $6,066,250 City of Frederick Tax Increment Financing, City of Frederick Downtown Parking Fund, Frederick County Tax Increment Financing

Danielle E. Gaines covers politics and government in Frederick County, splitting her time between Winchester Hall and The State House. Having grown up in Illinois, she lived in New York and California before settling in Maryland.

(51) comments

mejane

Many people want to see the hotel conference center deal much more defined before any funding is sought. A large number of people in Frederick believe if the hotel and conference center is not viable withoutpublic funding it should not be built.

If the Frederick County delegation asks for any TIF or State bonds, from the Maryland state budget, the request should NOT be in any part to support this privately owned ill-conceived plan. State budget requests should represent Frederick County’s public needs as priorities, rather than ask Maryland taxpayers to repay the debt.

elymus43

More tax dollars wasted.

petersamuel

From Wednesday’s Annapolis Fred Co delegates meeting on the DHCC which I too attended another development needs to be documented - a compromise proposal from Randy Cohen, operator of the Holiday Inn, Jefferson Tech Park Hotel and Hampton Inn & Suites. He says he is planning to build $40m worth of conference/meeting space at the first two hotels if the City holds off on heavy subsidies to the downtown establishment. He was there of course to argue the unfairness of government subsidy to a rival, but he also detailed what might emerge as a truce. Worth documenting regardless of what we think of it:

- downsize the proposed downtown hotel rooms to about 100, reduce restaurants from 3 to 1, drop the 24,000sf conference center to the original 14,000sf, avoiding the need for parking deck 6

- apply state funding to clean-up of ground contamination/pollution of this site and of others needing development in the Carroll Creek corridor instead of subsidizing one business with $18m

- create a combined website with ALL of the hotels, restaurants, and meeting places so potential visitors to the area will have a visitor needs database similar to Howard County increasing the County’s hotel tax without increasing tax rates

The City’s Richard Griffin said at the meeting he is considering a provision in the hotel tax bill to provide exemption from any increase on hotels with conference center facilities to satisfy Cohen’s complaint. That seems problematic. Cohen knows the lodging and meeting business and seems to be prepared to work toward a compromise with Griffin. So long as the end-result is minimal commitment of taxpayer funds such a compromise could be the best result we can presently hope for. P Samuel

KellyAlzan

Thanks for lookin out, and thanks for the update, mr Samuel

recordhigh

I have to be honest, that sounds like a terrible deal because It cripples the downtown project, which will probably torpedo the whole deal.

One of the main benefits of the downtown conference center and hotel is that it will bring out-of-town visitors into downtown where there are a lot of unique attractions, stores and restaurants within walking distance. It's the synergy of all that economic activity in one location that's the benefit that you won't get with a hotel and conference center in an isolated corner of mediocre mall parking lot or in an empty office park.

mejane

You should have been afforded the opportunity to debate Mr. Basu. That's what the public was expecting, and it would only have been fair.

jill king

It is very refreshing to see so much support in the comments today.

KellyAlzan

It's refreshing to see you commenting today, Jill :)

Hope you're staying warm:)

Kell

richardlyons

So when is Walmart (the savior of the Golden Mile) going to start demolition at the Fredericktowne Mall. Please tell me "market conditions" have not changed yet again. Mayor Randy? Alderpeople? Golden Mile Alliance? anyone? anyone?

joelp77440

Great project, can't wait[thumbup][thumbup]

KellyAlzan

"For such a "GREAT" project it should be a cinch to find a private investor. So kick the plamandoons to the curb and find someone who's the real deal."

KellyAlzan

County delegation:

Please vote NO for this funding.

Please find a private investor.

DeDeuceCoupe32

Try pretty please with sugar on top, works every time.[wink]

jerseygrl42

Wow, full court press by this paper on behalf of its owner who also owns the potentially tainted property they are trying to unload on the city and its taxpayers....its still bad bad deal folks as nothing has changed except for the fact they the "dealers" are playing 3 card Monty and removed the garage TEMPORARILY so as to be able to tell the taxpayers the price came down....nothing came downs Griffin says the garage will move forward separately.....anything goes when there is big taxpayer money on the line....still SHAMEFUL!

DeDeuceCoupe32

Potentially tainted property? The name Hotel Obama is just a rumor. Relax Jersey

public-redux

That's pretty funny.

johnqFrederick

Isn't there any funding left from all the successful projects the DEMs supported in Baltimore? Wow -- could Frederick and Western Maryland benefit from the very same handouts?

FrederickFan

Your boy Republican Blaine Young squandering at least $160,000,000 in taxpayer give-aways to residential developers during his four years, makes this Downtown Motel and Conference Center (that actually pays back the taxpayers) look like a lemonade stand!

FrederickFan

And again, yet another detailed, well researched article from this reporter.

joelp77440

This conference center will be a great asset. The changes are all part of the process and that is fine with me.

jerseygrl42

great asset to Plamondon

KellyAlzan

the conference center is one thing. the opposition is not of the conference center.

the opposition because they want to use state money. no matter how you want to spin it - its tax dollars. If our delegation must vote on using the money - then its tax money, plain and simple.

rbtdt5

sure, lets just keep giving all the state money to baltimore and monkey county.

gary4books

I nivite all who are interested to review the discussion and make up their minds. Here or Harpers Ferry? Or a corn field? Or just here? I think it is a good idea and makes very modest use of the public funds that otherwise would not be available for anything else.

FrederickFan

I agree.

KellyAlzan

I disagree

DickD

Vote no for funding, let the Plamondons and Randalls use their own money. They wouldn't do it for Cohen, don't do it for Plamondon.

richardlyons

[thumbup]

BlueDawn666

Yeah I don't think they will Dick because they didn't do it for Cohen. I think this is pay back...? Let the rich people finance this crap..why do we the taxpayers have to be on the hook for this bull....finally Republicans acting like republicans and being fiscally conservative and all..about freakin time.

FrederickFan

This could be a huge win for Frederick County since most of the money is coming from the State and the City. A vote of "yes" is a vote of support for dozens of small business owners in Downtown Frederick.

gary4books

[thumbup][thumbup][thumbup][thumbup]

jerseygrl42

THE MONEY is coming from THE TAXPAYERS to the Plamondon and Randall families.....don't fall in that separate pocket trap.....its ALL taxpayer money no matter how you slice it

KellyAlzan

yep. politicians represent OUR money. If they're voting on it - then its TAX DOLLARS.

Politicians don't vote on anything but public finances.

recordhigh

It's not ALL taxpayer money. Look at the tables at the bottom of the article and see where the funding is coming from.

And there is nothing wrong with investing tax payer money in something that will reap a return of new tax revenue streams in the future. Why is that a bad way to spend tax-payer dollars?

KellyAlzan

its very bad when we're facing an epidemic of our schools being over crowded.

It doesn't matter if its 1/2 mil $ or 46 mil $.

Our schools need attention.

How many decades did it take for the Woodsboro bypass to be built? Ok, well I-270 is over capacity. A toll road will happen. This is money that can be used for engineering and research for the new I-270 toll road. I don't care if there is no new road for 30 years, it will happen, and there is a starting point, a starting point that costs millions and millions and millions.

When Young did the carroll creek project - our schools didn't have a field for of trailers for classrooms. and I-270 was not a parking lot.

For such a "GREAT" project it should be a cinch to find a private investor. So kick the plamandoons to the curb and find someone whos the real deal.

recordhigh

The majority of the "tax-payer money" is coming from Stadium Authority revenue, which is revenue from other investments that the state made like this in the past. The rest of the money is from other local sources that are earmarked for this sort of thing. So, it's not like this project is taking money from the schools or the widening of I-270.

The bottom line is that this is an investment that may encourage economic growth and even turn a "profit" for the government in the future via new tax revenue. As to why a private business isn't stepping up to foot the whole bill, it's because they don't directly benefit from all aspects of the development, but the community at large does.

The government provides incentives and funding for all kinds of things that private industry can't or won't provide, but the community as a whole benefits from them. Roads are a good example. It seems like you want the government to do the bare minimum and only spend money on the things that you think are important. I'm glad I don't live in your anti-government, anti-social world.

KellyAlzan

Very sociable here.

Over crowded schools are over crowded schools. And I didn't have to write a Volume to get the point across either :)

gary4books

[thumbup][thumbup][thumbup][thumbup]

rbtdt5

This is going to be such an asset to downtown. It's probably the only thing downtown is missing.

KellyAlzan

yep, and that's why the corporate investors have been flocking for the opportunity!!!

not....

gary4books

[thumbup][thumbup][thumbup][thumbup]

Thewheelone

You know what else is missing? How about a grocery store, or a place to buy a band aid?

rbtdt5

I personally won't support a grocery store. I live downtown and wouldn't carry groceries 7-8 blocks. I'd rather drive for that. I do have out of town friends that would stay at a hotel downtown.

KellyAlzan

Why would you carry groceries if a grocer is downtown??

rbtdt5

No matter where you put it, not everyone would live within a block. I would still need to do weekly shopping. I wouldn't go there everyday no matter how close.

Dwasserba

Done deal.

Positive

County delegation. Please vote YES for this project. It is beneficial to the community and low-risk, high-return on investment to grow our local economy.

KellyAlzan

County delegation:

Please vote NO for this funding.

Please find a private investor.

Thewheelone

[thumbup][thumbup][thumbup]

joelp77440

[thumbdown][thumbdown]

jsklinelga

A needed article and sincere efforts by all involved. Thanks.

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