Your Oct. 30 editorial doesn’t consider the implications for local taxpayers of proceeding with the downtown Plamondon hotel without state money. Local taxpayers will now be asked to fill the gap left by the state — close to doubling our exposure to more than $20 million.

For “economic development,” you say.

That’s best promoted by business projects fully funded by those who stand to gain from success and who risk losing their own money if they fail.

Market analysis and financial forecasts in 2010, 2012 and 2013 showed the project barely breaking even in operating income with no provision for debt service or return on capital. Since then the local hotel scene has gotten more competitive, with four new hotels built and several more under construction — their costs disciplined by building without taxpayer subsidy.

In 2014, Municap, one of the city’s consultant firms, valued the proposed Plamondon downtown hotel by capitalizing projected cash flows. They calculated hotel value of $24.53 million and retail space at $2.69 million, for a $27.22 million total value. A parking garage for 240 cars is worth about $5 million. Total project value: about $32 million. Yet the memorandum of understanding the city signed with Plamondon last year put the capital cost of the project at $80.34 million. Spending $80 million to build something worth about $33 million is not economic development. It is economic lunacy.

Worse, the city has been talked into taking on the riskiest part of the project — underground construction. With county help, it is expected to buy the land, pay for cleanup, conduct archaeology, drive piles in the mud and build an underground parking garage, the roof of which will be an engineered podium designed as the foundation for the hotel above.

The main rationale advanced for city sponsorship of this hotel was that we’d never get lodging downtown without eight-figure public subsidies. But now, just two blocks away, the Visitation Academy Hotel is in design and permitting without any upfront subsidy or special deal with local officials.

Presented to the public as a “competed procurement,” the Plamondon deal was a fix. Invoice time sheets and meeting agendas clearly establish the two-site/two-firm “competition” was a sham. Plamondon was an insider and he had his proposal to the Downtown Hotel Advisory Committee (DHAC) before the request for proposals was even issued. The DHAC paid only cursory attention to his sole competitor’s proposal. The score sheet of the DHAC was absurdly biased to Plamondon. Let’s not forget the man first chosen by the city to lead the DHAC was Mark Gaver, a local gadfly later convicted of some $50 million of fraud.

City and county governments should walk away from this boondoggle as the state did.

Peter Samuel

Frederick

(25) comments

Burgessdr

Peter. You just make up fake stories. Visitation will be getting $6 million in tax credits but you say none. Lots of other inaccuracies in your fanciful story. Pants on fire.

petersamuel

Donald Burgess: I don't know what tax credits Visitation is getting. I do know that unlike Plamondon, Visitation has no special deal with the City to get funding. Any tax credits Visitation gets are in the tax code and are available to anyone without the need for years of behind closed door machinations and lobbying. If Plamondon had gone the straight road and taken what is available for all he might have got his hotel built in about 2015, but apparently it is such a crock of a project no one would finance it.

sofanna

What will it take to STOP using taxpayer's money? Perhaps we should NOT pay tax increases which we know will be because of this selfish, self aggrandizing, must leave "my mark" on the County. "I don't care who gets ruined financially." I guess when we become homeless because we can't pay our taxes, we'll just go live in the hotel.

threecents

If there is a hotel just two blocks away, then maybe the project can be downsized to just a conf center and parking garage. That hotel might justify building another parking garage anyway.

matts853

Peter, thank you for exposing all the ethical breaches in this sham process. If there’s a true market for this hotel, even with the new one coming on line, then rebid to find out. This project was ill gotten by Plamondon.

Dwasserba

Well-reasoned, but I'm thinking it doesn't matter how many thoughtful writers oppose this project. Just fodder for the archives, if there is failure in our future, plenty of background information.

KellyAlzan

Thank you Samuel for spearheading the needed oversight of this sham. Marylanders are Very appreciative of your interest, time, and passion in keeping this in check and keeping us informed.

Wishing you good health and all the best.

Kelly Q. Alzan

katiefmd

[thumbup]

petersamuel

Kelly: appreciate your kind words

richardlyons

But now, just two blocks away, the Visitation Academy Hotel is in design and permitting without any upfront subsidy or special deal with local officials. This sums up the faulty logic of the pro hotel crowd quite nicely. The biggest reason proffered for this (in part) taxpayer funded boondoggle was lack of a hotel downtown. That is being corrected by the boutique hotel on the VA property. Next?

Burgessdr

Richardlyons. Complete Ignorance. Visitation is getting $6 million in tax credits. .

richardlyons

and why do we need this other hotel oh ignorant basher? Waiting...waiting... waiting. You crack me up Don.

petersamuel

Mr Burgess: Visitation hotel is taking advantage of generally available tax credits on historic renovations that everyone gets (don't know it's $6m.) The point is that Plamondon is demanding his own special deal with the City and the County wherby they put up some $20m to $30m into his project. In addition he can tap in to the kind of historic credits that Visitation is getting, and which anyone doing historic renovation can get.

gary4books

"If the facts are not on your side, argue the process." This is a common and these days a popular way to discuss an issue. Even the POTUS uses it. And so can Mr. Samuel. I can only say "Good luck with that." People do remember.

gabrielshorn2013

Which of Mr. Samuel's documented facts are you disputing Gary? Yes, people will remember who tried to foist this boondoggle on the taxpayers.

collinsm65

Gary....the POTUS may use it...but the POTUS is clearly a mob boss and has many lawsuits for fraud against him and some hefty political shenangigans to go along with that. Ask him about all those construction deals with mob money in NY...hmm.

Dwasserba

Thank you for not mentioning the "courtesy" we owe visitors too drunk to drive who are currently calling for Ubers and taxis and using designated drivers.

KellyAlzan

[thumbup]

MD1756

[thumbup] Dwasserba.

petersamuel

Gary: I'm arguing that the facts AND the process are wrong. The facts are that this project is ill-conceived. It is a poor site for a hotel this large, awkward to access, iinsufficient street frontage. And the project has been thoroughly mismanaged and drawn out so long the market has changed. Downtown is more suited to smalller hotels like the Visitation. The feasibility studies which weren't specially encouraging at the time are five, six years out of date. We;ve been promised traffic impact studies. They haven't surfaced... I'm very happy to discuss the facts as well as the process.

DickD

Very well written, Peter. Your LTE summarized the problemswith the Marriott hotel better than anyone else has done. Good job!

gabrielshorn2013

Great letter petersamuel. The State understands the absurdity of this hotel, now let's hope the County does too.

Frayou

Nothing more than a Downtown Social Club for the Elite Business, Town, County & State Political Leaders to meet, eat, drink, party and sleep. This hotel/conference center should be privately funded as with other businesses absent of government tax funded grants.

FCPS-Principal

The writer simply does not understand the purpose of the state with regard to private businesses. The purpose of the state, at all levels, is to create a zero-risk environment for "private" businesses so they can engage in expansion, invest in foolishness and increase tax-free profit all at no risk to themselves. The taxpayers must carry all the risk and obligations incurred by the business. That is the business code of operation.

petersamuel

FCPS-principal: What you describe is crony capitalism or corporate welfare where businesses take the profits and taxpayers (the people) take the losses. There is too much of this as we see in the downtown hotel push locally and nationally during the 2008 ‘bailouts.’ It’s bad and we need bipartisan effort to combat it. But I think you go way too far in suggesting that this crony capitalism tendency permeates and defines our whole system. It is still an aberration, I submit. The bulk of business in America finances itself by gaining volunteer investors, invests without taxpayer subsidy, competes, and pays its way. Or if customers aren’t supporting it, it declines and disappears. That's the system we need to preserve.

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