Jack Lynch makes a quasi-compelling case in his June 8 letter to the editor, “Downtown hotel should require state historic approval.” However, he leaves out several important things that make his argument misleading.

First, the Maryland Historical Trust review is not an “approval.” It is a consultative process — in the words of the trust, it “does not proscribe an outcome.” It is an advisory opinion, not an approval. Second, contrary to his claim, the project did begin Maryland Historical Trust review (MHT 201502930). Third, a draft memorandum of understanding was developed between the city of Frederick, Plamondon, the Maryland Historical Trust, and the Maryland Department of Housing and Community Development. The MOU required a Phase III archaeological investigation, documentation of the findings, a public interpretation program with educational programs, interactive displays, historic artifacts and brochures, displaying photographs of the city’s industrial history, salvaging a stone retaining wall, public art to celebrate Frederick’s history, requiring Historic Preservation Commission approval of all construction, and developing mitigation plans (https://tinyurl.com/yy3w8y5n).

Fourth, the Maryland Historical Trust itself pulled out of its review of the project (by order of the governor?). Yes, they stopped their review! Neither the city nor Plamondon halted the review. Fifth, both the city and Plamondon have said they will continue the mitigation efforts proposed in the draft MOU. Sixth, the city HPC has had many meetings reviewing the project and requiring substantial changes to the construction. These are required — unlike the trust’s review, which is just an advisory opinion — not an approval, as Lynch claims. Furthermore, Lynch is very dismissive of the city HPC review and requirements, saying that they are “local courtesy approval.” This a disturbing comment (to say the least) by someone that claims to be an historic preservationist.

Maybe Lynch should call the trust and order them to continue their review rather than bellyaching. Again, the Maryland Historical Trust review is a consultative process. It does not approve the project.

Don Burgess

Frederick

(34) comments

gary4books

"Dog in the Manger" Townsend version A dog lay in a manger, and by his growling and snapping prevented the oxen from eating the hay which had been placed for them. “What a selfish Dog!” said one of them to his companions; “he cannot eat the hay himself, and yet refuses to allow those to eat who can.”

gary4books

Dogs in the manger?

Hammer

MD1756 is right. Not only does it fail at onset, the likelihood that after 10 years this project is a success are pretty grim imo, then the taxpayers pick up the entire boondoggle, and try to find any market player who will atke the risk of a failed operation with overwhelming costs.

Hammer

A majority of the Delegation opposed the increase in county hotel taxes. Should that have not prevailed as a local courtesy bill. You can't have it both ways, no matter how hotels you want downtown Burgesss.

Dwasserba

Inadequate parking.

shiftless88

It is still a stupid idea to use public funds to support this project

DickD

Don, those of us who do not live in Frederick City or have a business there really don't care what the Plamondons and Randalls do - as long as they don't use tax dollars.

Burgessdr

Sick. Why are.you opposed to tax credits for this project, but not to tax credits to the 100s of other businesses that get city, county, and state tax credits?

Dwasserba

Dick can make his point without seeming hostile.

Burgessdr

Mistyped Dick

shiftless88

Don; unless things have changed the original pitch was for the City (?) to issue bonds that would be used to pay for the convention center and/or garage. Has that changed? But in any case, this is taxpayer dollars (a credit means that is money not being paid, which is the same thing as giving them taxpayer money) going to ONE business. And not some struggling mom and pop business, either. Again, if this was financially feasible it would have been done long ago. The fact that it is not should give anyone being asked for support some pause.

Burgessdr

Shiftless. You are clearly pretty uninformed about the concept of tax credit financing. And that it is widely used as a means of supporting economic development. Why do you oppose just this project but not all others? There are many types of tax credit financing.  This project is using three of them.  Plus user fees (which are not taxes - there will be $1.5+ million coming from parking fund, those are not taxes, those are user fees).

You rant about about public financing, but NEVER mention the tax revenue generated. That's a big alt-facts distortion. The state and county and city will get back way more than invested as public financing.

* The county and city will get about $800,000 in real estate taxes from the hotel each year * The county will get about $500,000 in hotel tax each year. Plus maybe another $200,000 in hotel tax from other hotels because of conference attendees not staying at the downtown hotel. * The state will get about about $500,000 in sales tax from the hotel each year plus maybe another $200,000 in sales tax from other hotels because of conference attendees. * The state will get about $300,000 in income tax from hotel employees each year. Plus maybe another $100,000 in income taxes from employees at other hotels because of conference attendees. * The state will get maybe another $200,000 in income tax from Plamondon each year * The state will get maybe another $400,000 in sales and income taxes from restaurants, shops, etc frequented by hotel guests each year plus maybe another $100,000 in sales and income taxes because of conference attendees. * The downtown hotel will also stimulate revitalization on the east side of Frederick (BTW it is already happening).  It is hard to quantify the economic impact, but it will be substantial.

You rant about about public financing, but NEVER mention the tax revenue generated. That's a dishonest argument.   

If you dont like these tax revenue estimates, please feel free to provide your own. My guess you wont/can't.  You will just dismiss them out of hand providing no evidence.

MD1756

Burgess, your numbers seem to be overly optimistic. $500,000 per year from the hotel tax (lodging tax). Let's assume the new hotel charges the highest amount ($165/night at 10 Clarke). At a 3.5% lodging tax, that's $5.775 per person per night. $500,000 would be 86,580 person nights (105,820 person nights if the room rate is only $125/night). That would be 237 people staying at the hotel (with 180 or 199 rooms (depending on the source of the data)) 365 days out of the year (290 people if the room rate were $125). Where are all of these additional people coming from? Are you other numbers also based on the same unrealistically high number of people coming to conferences in Frederick? Given the wages hotels pay, I doubt the state will get any additional revenue on income taxes especially if the hotel workers have an children. We may end up giving more back than is collected. Tax dollars are better spent on under funded core government functions and more specifically underfunded infrastructure. I would say that for all public/private partnerships. Unless realistically (not what is in the realm of possibilities because maybe the new hotel would attract a million more people to Frederick each year... possible but not probable) the venture will guarantee a higher return on investment than other options, there should be no investment of public money.

Burgessdr

Md1756. You clearly are not a numbers guy. The math us simple. 200 rooms times 75% occupancy rate times 365 days per year times $170 per night times 5% hotel tax makes $465,375 per year. Rounded makes $500,000.

DickD

Don, MD's math is too simple to you, yet you expect us to believe that the hotel, charging higher rates than almost any other hotel is going to achieve a 75% occupancy rate. It is easier to believe MD.

MD1756

Burgess, I'm a ChemE with an MBA concentrating in finance and management science. I looked up the hotel tax in Frederick, Maryland (state tax goes to the state so I didn't use the state 5%). From: https://www.fcva.us/departments/commissioner-of-the-revenue/business-division/lodging-tax-information it states "... A 2.5% tax (increasing to 3.5% beginning on July 1, 2019) shall be imposed on any public or private hotel, inn, apartment hotel, hostelry, tourist home or house, motel, rooming house, travel campground or other lodging place within the County of Frederick, offering lodging for any individual or group at any time, and the owner and operator thereof who, for compensation, furnishes lodging to any transients...." I stand by the numbers since you are talking about the county (not the state) getting $500,000 from the room tax (and I used 3.5% not the old 2.5%). Do you really think there will be a 75% occupancy rate 365 days a year with so many alternatives that are near and cheaper than the $170/night you use which is significantly higher than the current most expensive (which is 10 Clarke, an "Upscale Victorian B&B with a garden patio, 3-course breakfast & nightly wine & hors d'oeuvres...."? Comfort Inn charges $67/night and the Courtyard Marriott charges $110. So I used $165/night and $125/ night in my calculations so you can see I used the high end and a number ($125/night) that is more likely to be realistic. I stand by my numbers over yours.

gabrielshorn2013

Tsk, tsk, tsk...now you've gone and done it MD1756, you brought real and verifiable numbers to counter don's fiction. This will not do. Since don is stating a 75% occupancy rate, the parking deck/basement/hotel foundation will be full and the other 25% he expects will not be able to park there. Very attractive to potential guests.

MD1756

While I accidentally used a link to Frederick County VA (when I searched for Frederick MD), I had also seen the following link: https://frederickcountymd.gov/1369/Hotel-Room-Rental-Tax which provides that hotels who pay the tax on time get a 1.5% discount therefore making the tax receipts to the local government 3.5% not 5% unless a hotel doesn't pay the tax on time. I don't think many hotels would pay late just so they could pay an extra 1.5%. So in reality, the tax rate is 3.5% as I used in my calculations. As far as hotel ratings are concerned, you can go to many different websites and find different ratings, which is why I didn't include ratings. Prices vary depending on the season, booking etc. There are plenty of cheap hotels around (with 3 star rating) that limit what a 4 star hotel could charge (even if you believe the start rating). A current search (for a 2 person 2 night stay on the nights of 7/4 and 7/5) shows Marriott's: Fairfield Inn at $97; Courtyard at $100; Residence at $130 and its Town Place Suites at $114. Do you really think they'll get much business at $170/night all year when a nearby upscale B&B gets $165/ night? I still stand by my numbers which indicate that for Frederick to get $500,000 you need over 100% occupancy (assuming one person per room) for 100% of the days of the year. As I showed earlier even with a $165/night rate, to get $500,000 at 3.5% (not 5% which I doubt many hotels actually pay) you need 237 people staying each night in a 189 or 199 room hotel for 365 days a year. If the actual room rate is $125 then you'd need 290 people per night for 365 days. I still stand by my numbers. Frederick will not get $500,000 as you claim. Your other numbers are also overly optimistic.

Burgessdr

MD1756. You really like to dig your hole deeper. If you buy shoes for $100 and get a 1.5% discount that means you only pay $98.50. If the hotel has to pay $1,000 tax, a 1.5% discount means they only need to pay $985.

MD1756

Burgess, you are right about the 1.5%. I read the form too hastily and assumed it was a 1.5% subtraction from the 5% not 1.5% off of the 5%. Nevertheless, I still believe your numbers are overly optimistic. Do you believe that one new hotel will generate an additional 54,750 person nights (over the current number) at $170/night in Frederick when other hotels are not already filled up? It seems more likely that the actual price will be lower even if your 75% occupancy rate were to hold up (debatable given other hotel construction planned in the area without tax payer support) unless you have knowledge that some existing hotels will be closed. I generally do not support governments giving businesses any tax money for their business especially when core responsibilities are not being fully funded. Let the private sector take the risk. I still believe your numbers are overly optimistic. I'd rather the government invest its money (in part my money) elsewhere at a higher rate of return with lower risk. There are an awful lot of maybes in your estimates without any probabilities attached. Is there a 90% chance you are right? 50%? 10%?

Burgessdr

Md1756.  You are so uninformed about the demand for hotel rooms in Frederick.  What do you base your opinions on? A ouija board? I just tried to book using Expedia a 2 week stay 3 months from now in the middle of October at the Plamondon's Marriott Courtyard.  It said that there were only TWO friggin rooms left at a frigging $178 per night.   That's an occupancy rate of friggin 98% (90 room hotel).   But there are plenty of rooms left at the no tell motels in Frederick at $65 per night.  So there is a large demand for the better more expensive hotels contrary to your random opinion.  There is a large demand for a full service 4 star hotel in Fredrick County because there is NONE.  There is a large demand for a hotel in downtown Frederick because there is NONE. I do support your 1st amendment right to babble your random thoughts. 

MD1756

Burgess try booking for less than two weeks. If its a conference it would likely last one week or less. I can get a room at 10 Clarke for $155/night from 10/7 to 10/11. If you check out Saturday instead of Friday it goes all the way up to $165 for the last night (Friday) at the B&B. According to their reservation calendar, they have openings except 10/18 and 10/19 (Oktoberfest is that weekend) and obviously no rooms would be available for a two week period that covered 110/18 and 10/19 at that hotel and probably others. However, my search shows that there are plenty of hotels available from 10/6 to 10/19 (two weeks with prices ranging from $76 to $179 for 3 star rated hotels (including Frederick Inn B&B for $164/night during that two week period). I don't know why you feel the need to be insulting in your posts.

Burgessdr

Md1756. I tried booking a week 3 months from now at Courtyard Marriott. Only 3 rooms left THREE MONTHS from now. There is a large demand for full service hotels by business travelers. And there is no 4 star hotel in Frederick County and no hotel in downtown Frederick. Facts. But you can babble all you want

Burgessdr

Md1756. Facepalm. 10 Clarke place with 5 rooms can hardly handle a conference with 300 attendees. Furthermore business travelers dont stay at B&Bs. They dont stay. budget motels. They like to stay at full service hotels. Of which there are none in Frederick. The would to prefer to stay downtown. But there is no hotel downtown. It's simple. Hotel management 101.

MD1756

Burgess, if you are correct, then you just made the case against using public funds for a hotel/conference center that will take off like gang busters. They don't need our help and I don't consent to being taxed to support projects like that. It is not a core government function. Furthermore, I did not choose Frederick and the state to be my investment managers. They have no fiduciary obligations to me (an accredited investor aka high net worth investor HNWI) as the firm I have my money managed by does. There are much better investments I'd rather put my money into so if Frederick and the state tax me to invest, I have less money to invest in opportunities I choose.

DickD

Nationwide the occupancy rate of hotels is 66.2%.  And that includes all hotels, many much cheaper than the Marriott would be in downtown Frederick,  In fact. if the Marriott is to charge the prices that Don shows for taxes, it would be triple the cheapest hotels and about $50 more than other top rated hotels.  Now most hotels give discounts, so even the listed price is not the actual price.https://www.statista.com/statistics/200161/us-annual-accomodation-and-lodging-occupancy-rate/ This statistic shows the hotel occupancy rate of the U.S. hotel lodging industry from 2000 to 2018. In 2018, the hotel occupancy rate was at 66.2 percent.

Burgessdr

DickD. The occupancy rate nationwide is completely irrelevant. The most recent occupancy number I have seen for Frederick is 73.5%

Burgessdr

DickD. The occupancy rate of Marriott "limited service" hotels in the US in 2018 was 74.9%, and for Marriott "full service" and "luxury" was 76.9%. At least according to Marriott's most recent annual report. The downtown hotel will not be a full service hotel and hence will have higher than the average occupancy rates. Give up.

richardlyons

If Marriott, or any hospitality firm, viewed this site as profitable for a hotel, they would purchase the property, build the hotel, and reap said profits. This has not happened over the past 10 years, and it speaks volumes.

DickD

[thumbup][thumbup]

Hammer

Mr. Burgess grossly misunderstands Mr. Lynch's complaints about the downtown hotel project historic review. MHT did not withdraw from oversight, without state funding secured, its involvement was put on hold. Lastly, he does not even understand what local courtesy is, a proclivity of state legislators to allow bills to pass based on local construction and terms rather than full legislative review. This si the objection to the fudning legislation proposed, that cut out MHT review.

Burgessdr

MHT does not approve the project. It has an advisory role. Check the timeline. The Hogan administration stopped the MHT review BEFORE the wording in the legislation was inserted. Plamondon and the city were all for the review, and will mitigate as planned according to the draft mitigation plan. You don't understand. "Local courtesy" is when the local delegation SUPPORTS the project. The majority of the local delegation OPPOSED the project.

petersamuel

MHT told me they called off their review of the project because the state grants already made had not been used by the City (it failed to advance the project to the point where money could be drawn) and no new grants were in process. MHT have no jurisdiction if the state isn't granting funds for a project. Don Burgess is right about that. Jack Lynch is right to protest that backroom efforts by boondoggle supporters (Krimm, the Youngs) produced the outrageous provision in legislation that would exempt new grants from MHT review. The issue is probably moot. There will be no new state grants. The Governor and others at the state level know this is a thoroughly mismanaged, corrupt, wasteful, destructive and unfair farce of a project that doesn't deserve a single dollar of taxpayer money -- state or local. Plaudits to Gov Hogan, Comptroller Franchot, Senator Hough, Delegates Cox, Ciliberti and Pippy.

Hammer

Exactly. Kudos to you all along Peter on investigating, exposing, and communicating this Boondoggle! Not only is it bad to allow a backroom political scheme get through to state funding, its sets a terrible local precedent that the entire state should protest and prohibit.

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