In an editorial on Oct. 30, The Frederick News-Post claims, without offering any supporting facts, that a downtown public-private hotel project will be a “vital driver to sustain and extend development” in the city of Frederick, and its “importance cannot be overstated.”
The project is financially so risky that no hotel developer will touch it unless they are subsidized by local government. Yet, the newspaper claims confusion as to why anyone, including the governor, would oppose taxpayer money being invested in this project.
City and county political and business leaders who support borrowing money that will put taxpayers at risk for a potential multi-million dollar money loser have never offered evidence to support their claims with reasonable probability or certainty that there is a market for a second downtown hotel that will generate sufficient sales and property tax revenue, job growth, added commerce, and higher property values to local business and property owners, to justify the risk.
Therefore, a government subsidized hotel project is a purely speculative venture that may never generate sufficient revenues and benefits to the city and county to cover the debt payments incurred. This will likely require a diversion of public funds from other vital sources or an increase in property and sales taxes to satisfy the debt. Similar problems have occurred throughout the country when public monies were used to help finance a stadium, convention center, hotel and other commercial projects that did not produce the expected increases in tax revenues.
This never-ending political vanity and ego project needs to be brought to a halt before additional valuable public resources are wasted.