On Nov. 5, you published my letter in which I argued the “lunacy” of spending some $80 million all-in on the city-sponsored downtown hotel when the city’s own financial consultant MuniCap was valuing the project fully phased in at a mere $33 million. I wrote based on the latest data then available — projections done in 2014.

In the last week, I’ve been given fresh valuations from MuniCap dated Oct. 28 and Nov. 5, 2019. They put the hotel project value much higher than the numbers I cited. It is now valued at $50.01 million phased in, 53 percent higher than the 2014 estimate I used. The new numbers make the project look less lunatic, but they still suggest it is a loser.

And there are major problems in the assumptions given to MuniCap to project from. The $50 million valuation is obtained only by enlarging the hotel from the 183 rooms presented to the city Historic Preservation Commission and given Level 1 approval in June 2017, to 230 rooms, a 25 percent increase. Are we really going to have those contentious historic commission hearings all over again to approve an even larger financial folly on the city skyline?

The new valuations assume a $179/night average room charge and 72 percent average occupancy — very high numbers, local operators say. MuniCap manages to hike projected operating profit per room from 2014’s $11,300 to $17,500 per year — up 56 percent — but they get the improved result assuming no increase in hotel operating costs per room from 2014 to 2019.

MuniCap’s job as a consultant is to run financial projections based on assumptions provided by the city and Plamondon (the developer). An old adage about projections seems apt here: Garbage in, garbage out.

Peter Samuel

Frederick

(34) comments

KellyAlzan

Gary - not a single person agrees with you. And your points are out of touch. Comparing a visitor center to a hotel. Really??

And you act as if there are no other hotels in the area. You act as if taxi

Services are non existent here. How bout Uber?

r1dudley

If this was a viable project Marriott would jump at the deal. Guess what no one but the City seems to think this is a good deal. Step away quickly.

gabrielshorn2013

Really FNP, really??? You delete my response to Gary that did not violate any of the listed terms of use? This issue is clearly a conflict of interest for this newspaper, who is clearly trying to interfere with the opposition to this boondoggle. Where is your journalistic integrity?

gabrielshorn2013

Thank you FNP for doing the right thing below.

gary4books

reductio ad absurdum

(see below)

gabrielshorn2013

You claim a logical fallacy that was not demonstrated here Gary. The only absurdity is your coniinued support for taxpayer financing of this boondoggle.

DickD

In my opinion, achieving average 72% occupancy athe $179 per night will never happen. Make Plamondons put up some guarantees or foot the entire costs themselves.

shiftless88

They will form a LLC and when it goes bust they will walk away

jagman

Build it with PRIVATE money or not at all.

The fact that the Plamondons and Randalls want to use public funds shows they know it's a loser

And once again, It is not a "courtesy" to rent hotels rooms to the public. It would only be a "courtesy" if those rooms were proved for free. Simple to understand.

gary4books

Simple? Yes. But not the only meaning:

noun, plural cour·te·sies.

excellence of manners or social conduct; polite behavior.

a courteous, respectful, or considerate act or expression.

indulgence, consent, or acquiescence:

a “colonel” by courtesy rather than by right.

favor, help, or generosity:

The costumes for the play were by courtesy of the local department store.

SEE MORE

adjective

done or performed as a matter of courtesy or protocol:

a courtesy call on the mayor.

offered or provided free by courtesy of the management:

While waiting to board the airplane, we were provided with courtesy coffee.

Dwasserba

Free things.

jagman

Gary, you made my point perfectly with your numerous examples of things being given away for free. Example: "The costumes for the play were by courtesy of the local department store". That would indicate those costumes were proved FREE.

The P's and R's aren't going to give away hotels rooms for free.

KellyAlzan

Exactly. The P’s are the only fast food restaurant that wing even hand you a soda at the drive thru till it’s paid fore

gary4books

I did not. A courtesy is more than a gift. It can be much more.

jagman

You absolutely did. Your entire cut and paste "definition" contained examples of "free".

Unless you possess information that the Plamondons intend on giving away free hotel rooms in their boondoggle you stand corrected.

MD1756

Provide all the courtesis with your own moeny and leave my money out of it. If they can't raise money in the public or private debt and/or equity markets why should the general public be taxed to support a courtesy which is not needed and which funding the courtesy ultimately takes money away from underfunded infrastructure needs (note providing CSOs and SSOs that don't overflow is the law not a courtesy).

gary4books

How much profit does our "visitor center" make every year? How much return do we make on information signs for visitors? What profits do our roads return? It is all a matter of accounting and some benefits are not so easy to measure. If we want a hotel as a courtesy to visitors and to bring in customers for other local businesses, it may cost more to get it started. It is a decision to make, not a bone to fight over.

KellyAlzan

Except Frederick is not a one hotel town......

DickD

Where do you see a single private enterprise making a profit off the visitor center. It's for all businesses, of any kind and the visitors that stop by. Apples and oranges.

gary4books

A visitor center is funded with our money as a courtesy to visitors. We do not expect a profit.

jagman

You're making a false case that a visitor center (public service) is the same as a hotel (private business).

shiftless88

Public money should be spent when it helps multiple businesses, not one (plus a few crumbs for others)

KellyAlzan

Gary, this LTE is about a hotel and conf center. Not about a visitor center.

Besides a visitor center is not a business. No services sold for profit

DickD

But the Plamondons do, using our tax dollars, Gary.

gabrielshorn2013

Thanks for staying on top of this and keeping us informed Peter. A 72% occupancy rate will exceed the capacity of the foundation/parking deck, forcing customers to schlep down the road in the dark or poor weather. Bad idea before, bad idea now. I just came from a beautiful 58 story glass tower Marriott property in China. If Marriott can do that, they can afford to build a small hotel in podunk Frederick MD with their own money.

richardlyons

[thumbup]

DickD

Was that one owner the Plamondons, Gabe?

gabrielshorn2013

In China? No, definitely not the Plamondons. Nonetheless, it was a Marriott, and the downtown hotel, should it ever be built, will be branded a Marriott also.

gary4books

Mariot is in business to make a profit. No hotel now means we will need some assistance to start a hotel or wait for others hotels with different start up support.

gabrielshorn2013

Yep, hotels are private business ventures that seek to make a profit, therefore dont need public money. And that's a problem because...?

gabrielshorn2013

BTW, the Visitation Academy hotel should provide all of the "courtesy" you say is needed, without taxpayer money. Then those that are too full from dinner or too drunk to go home can have a place to sleep it off.

gary4books

And it has its support, too: "O’Hare estimates the total cost of the project will come in between $15 million and $20 million, some of which they hope to offset with federal and state tax credits. That is not a small price, and the investment is not going unnoticed."

https://www.fredericknewspost.com/opinion/editorial/visitation-academy-development-is-exactly-what-frederick-needs/article_36915014-49c0-5eca-8e6d-774dc8ef2f4b.html

gabrielshorn2013

Gary, you do realize that those are after-the-fact tax credits that anyone who builds in the historic district are able to apply for, and not up-front funding like the hotel developers want, right? Apples and pears, and still not a courtesy.

KellyAlzan

Thank you Peter. Have a great thanksgiving!

Kelly Q. Alzan

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