Wordplay used to give cover to the same old subsidy scheme

State Delegate Karen Lewis Young is quoted in the Frederick News-Post (2019-01-19) as saying that the proposed new scheme at the downtown hotel should be called a Public Infrastructure Project. Del Lewis Young told the newspaper she thinks the change of funding “warrants a new conversation.”

Everything about this City hotel happens in very slow motion! 

It was 32 months ago back on May 18, 2017 at the Delaplaine Center when Plamondon released some revised plans for his hotel and conference center, that Mayor Randy McClement made a big play of a new scheme for dividing responsibility for capital costs. Instead of city, county and state taxpayers being up for some 30 percent of the costs of the whole project taxpayer money would be focussed on land, basement car parking, road modifications, and landscaping. The publicly funded basement car park would form a structural platform or ‘podium’ on which developer Plamondon would build his hotel and conference center, now to be fully financed by him. 

It has never been clear how this is a better deal for taxpayers. Building a basement parking garage in this difficult creekside ground, below the level of the creek canal, is a very risky and costly way of providing parking spaces. The City would never propose this purely for parking cars. It would build an above-ground parking deck because that is the more economical way of providing parking. Per parking space costs underground nationally run an average $41,000 versus $25,000 above ground like the City’s five existing decked garages. (NOTE: The cost of the sub-Plamondon parking is closer to $70,000/car-space!)

If the ‘infrastructure’ being funded by the City for the Plamondon hotel was going to pay its way for the City, if the basement parking garage was a good investment returning sufficient revenue to support the capital cost then of course no state dollars would be needed. Good investments can be funded in the capital markets. They don’t have to go begging to Annapolis.

The new scheme subsidizes the project by using public dollars to buy the land and public dollars to do all the difficult underground foundation work rather than subsidizing 30 percent of the whole project. It’s still a heavily taxpayer subsidized project.

In order to be sure the costs were properly allocated it should be divided into two separately bid building contracts — the publicly built  portion down in the creekbed bid out by the City, with Plamondon to get his own bids for his construction on top of the City-built podium. But the proposal is still to build the project with a single design-build contract above and below the podium. That ensures it will never be clear how much the garage and podium is costing versus the hotel and conference center on top of it.  With one umbrella contract the builder doesn’t care how costs are allocated between the two parties. 

Cost sharing between taxpayers and the developer will be an arbitrary political decision.

What Del Lewis Young wants to call ‘public infrastructure’ is what the hotel and conference center needs. It is not money that would be spent on such work if there wasn’t a deal to put the City-sponsored hotel on top.  Plamondon is being saved tens of millions of dollars that he’d have to find without the City sponsorship. 

He is given a special favor. Engineered platforms above the level of the canal normally get built by developers. So the downtown hotel remains a heavily subsidized project, and it remains unfair to competitors who get no such taxpayer largesse. 

The change of May 18, 2017 was pure wordplay, PR. Unchanged is the fact that taxpayers are being asked to heavily subsidize the project.

To paraphrase Greater Greater Washington on a proposed stadium subsidy: A hotel subsidy by another name is still a hotel subsidy.

Also unchanged is that the selection of Plamondon was a dirty insider deal. Unchanged is the fact that there was a supposed ’competed procurement’ conducted purely for PR/political appearances that was fakery and fraud.

2019-01-22 

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Ten points about the boondoggle

1. Project launched by a big time crook Mark Gaver now serving 17 years jail after being convicted in US Court on $50 million of money laundering and bank fraud. Gaver was the first chairman of the Downtown Hotel Advisory Committee (DHAC) appointed to that position by Mayor Randy McClement and described as the City’s ‘point man’ for its hotel. Part of the Ole Boy Frederick mafia, Conman Gaver set the DHAC on the path of meeting behind closed doors to conceal its machinations from scrutiny. This was clearly a violation of the state’s Open Meetings Act.

2. With its chairman appointed by the Mayor, meeting at the call of City staff, and housed on City premises, charged with spearheading a City project, and given the services of City-funded consultants, the DHAC as a City body was required by State law to give notice of its meetings, to meet in open session and publish its agenda and minutes of meetings. But it couldn’t meet in public because it was engaged in extracting tens of millions of taxpayer dollars for one of its own. It received the detailed Plamondon hotel proposal and agreed to the City shouldering much of the cost, then realized the only way to get State dollars was to contrive the appearance of a competitive procurement. Emails contain indiscreet words to this effect attributed to the City’s lobbyist in Annapolis.

3. Consultants JLL proposed a competitive procurement method by which a site would be selected first, then in a second stage there would be open competition among hotel developers to develop the City-selected site. This two-stage competitive procedure was presented publicly to a meeting of the Mayor and Board of Aldermen. However months later behind closed doors the DHAC dumped that format for a single stage procurement under which only developers with control (ownership or contract to buy) over one of four sites* chosen by the DHAC could bid for the lucrative City sponsorship. In one communication the new draft procurement method is referred to as a Plamondon draft. The winner wrote the terms of the supposedly competed procurement.

* Only two of the four eligible sites were free for a hotel, a third being already committed to office use, the fourth being the US Postal Service’s still active main Post Office..

4. Invoice timesheets show that City consultants hired to conduct the procurement put in 100 hours with the Plamondon company before and during the supposed competitive procurement. This was in flagrant violation of City Purchasing Offices rules which confine lawful communications to written questions and answers to be made available to all bidders.

5. Scoring of the two bidders by the shady DHAC was heavily biased to favor the pre-selected winner. In short, the City DHAC committed a fraudulent ‘competed procurement’ and Plamondon was improperly selected to be the recipient of tens of millions of taxpayer dollars.

6. The project requires removal of the Birely Tannery, Maryland’s last remaining historic leather tannery deemed to be of “unusual historic importance.” Other sites nearby lack historic buildings. The State’s regulator Maryland Historical Trust wrote a scathing review of the quality of archeological survey work done for the City and the developer. It has not signed off on the project, and is apparently being bypassed.

7. Eight years after the project was launched City officials recognize that the heavily landlocked site has insufficient street frontage for vehicular access and seek to buy neighboring properties. Even though City taxpayers will pay for and own the land, the developer is conducting negotiations to buy it. A site plan submitted for the existing site was the subject of a scathing list of questions from City permitting staff.

8. The project has been managed with extraordinary ineptitude. Deadline after deadline has been missed. Studies done at considerable expense are now obsolete. Two state agencies, Maryland Stadium Authority and the Maryland Economic Development Corporation (MEDCO) each examined the City hotel project and found no justification for supporting it. The Department of Housing and Community Development made two grants to the City of Frederick to support the hotel project but neither could be drawn on because the City failed to meet contract commitments on time. The Department declined further extensions, so the City forfeited State grant money.

9. The project no longer involves a subsidy, City advocates say, because they have split the project into two parts — a City parking garage below street level providing on top a podium or platform on which the developer will build the hotel and conference center. The City as well as buying land, doing all the necessary roadworks and landscaping will now assume all costs and risks of excavation and foundation work in the old creek bed, the site of two centuries of crude industrial processing. The City will pay all the cost of the parking garage. If it were not for the hotel project the City would never build a one story basement parking garage in this difficult creekside location. Costs per parking space will be much higher than at the City’s other garages. A subsidy to the hotel by another name — a parking garage for the hotel — is still a hotel subsidy.

10. Original rationale for the subsidy was that private enterprise would never invest in a hotel without City, County and State subsidies. Now within two blocks of the City/Plamondon site at the empty Visitation Academy building  investors are building a hotel and condos without any City or other government support.  The purported rationale for taxpayer support has disappeared.

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If the Mayor really wants to “address concerns” he should…

POSTED COMMENT:

Mayor O’Connor thinks that “addressing concerns” will win support for the City hotel project. Fine. If he’s serious then he should:

1. Explain how the City came to appoint as its “point man” for the hotel project none other than Mark Gaver, probably the biggest conman in the history of Frederick County now serving a well-deserved 17 years jail for his six year $50 million fraud.

2. Tell us why Gaver’s closed door mode of operation of the City’s Hotel Advisory Committee (HAC) in flagrant violation of state open meetings law was tolerated by the City for eight years.

3. Investigate the HAC’s shenanigans in the so-called ‘competed procurement’ of developer Plamondon under the previous Mayor. How come the HAC quietly dumped the site first, developer second or 2-stage procurement recommended by the City consultant and endorsed by the Board of Aldermen? How come Plamondon’s proposal was received by the City even before the RFP was issued? How come there’s a reference in emails to the City working off a draft RFP written by none other than Plamondon? Why was the City Purchasing Department bypassed in violation of City rules?

4. Explain why the City after proclaiming the old Frederick News-Post lot as the best available site for the hotel it now finds it necessary to buy the Eagles property next door. Explain why  Plamondon has been negotiating with the Eagles for land which the City plans to buy and own.

5. Make the case for the City building and giving the hotel developer an expensive engineered ‘podium’ slab for his hotel atop a basement City garage. Show why the taxpayer should assume the risks and costs of building in the dump that is the remains of two centuries of industry creekside. Spell out what this will mean for the finances of the City parking fund.

6. Give us a detailed capital budget for this project. 

7. Get answers to the 25 issues raised by City planning staff in their letter “Re: Sketch Plan STF17-992SP for 200 East Patrick Street” signed by Pam Reppert, City Planner dated December 18, 2017.

8. Explain why he keeps project managers who have obtained state grants, then have them expire because they’re unable to get their act together…. project managers who love to generate project ‘milestone’ schedules and then disregard and discard those same schedules with impunity. Why not new project management?

Peter Samuel

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Extra land for downtown hotel causes more delay, more cost, more conflict

Joe Briglia

18 months ago the Plamondon company’s Joe Briglia made a page-and-a-half (1.5p) proposal to Richard Griffin the City’s director of economic development. This key Briglia email of February 13, 2017 has been blacked out (‘redacted’) as confidential and claimed to be exempt from state law’s requirement for release as a public document so we are denied its detail. But it is clear from other emails that have been released to us that the Briglia proposal was an argument that the City should buy the whole Eagles property — their club building as well as their parking lot immediately adjacent to the hotel site.  Continue reading

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Hotel an election issue — Afzali  and Giangrande highlight opposition to tax-$s

Kathi Afzali the Republican candidate challenging Jan Gardner for County Executive is contrasting her stance on the downtown hotel with those of her two rivals in the November 6 election. A chart in a recent email flyer contrasts her stance against taxpayer money going to the hotel with the support for taxpayer dollars  by incumbent Jan Gardner (Democrat) and Earl Robbins, the independent candidate. Afzali’s flyer presents the issue as: “Corporate Welfare: Giving $30 million in taxpayer money to a private developer to build a hotel in downtown Frederick.” The chart (see lower in this report) shows with a red ‘X’ that Afzali opposes government money whereas Gardner and Robbins with green ticks support ‘corporate welfare.’ Continue reading

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An email back & forth with a leading defender of the City’s handling of the Eagles land buy negotiations

He said ‘No’ to reporting his name, so following New York Times practice we call him/her Anonymous or Anon.
Anon: Its pretty simple. Plamondon buys property. The city cannot dictate when or how much. The City then later may to decide to property. It would go through city purchasing requirements including vote by BOA (Board of Aldermen) You are surely welcome to get up at the BOA meeting and holler that the city is CORRUPT by paying HALF the appraised value. “What a TRAVESTY. (etc)” Continue reading

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Mayor O’Connor says extra land for hotel will only be bought after vote of Board of Aldermen — no comment on Plamondon offer to Eagles

Mayor Michael O’Connor says there will be “no action” to acquire

Michael O’Connor

extra land for the downtown hotel without a vote of the Board of Aldermen. And the City will abide by its purchasing rules and the state open meetings law in handling the matter of extra land. Mayor O’Connor was responding to a letter co-signed by Jane Weir editor of the FoF C Downtown Marriott Watch, myself and another citizen in which we questioned allowing the Plamondon company to negotiate the purchase of land which is to be paid for and owned by the City. Continue reading

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LETTER TO THE MAYOR Mr Mayor: Is Plamondon the City’s purchasing agent?

Mayor O’Connor

Mr Mayor: at a recent meeting of the Frederick Eagles club it was revealed that Plamondon Hospitality Partners (Plamondon) has made a $650,000 offer for the Eagles property adjacent to the City-sponsored downtown hotel. Apparently the Eagles land is proposed to be added to the Randalls’ land which is all to be paid for and owned by the City.  Plamondon is in effect making offers-to-buy on behalf of the City of Frederick! Continue reading

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Plamondon offers Eagles $650k for adjacent property valued at $1.23m

Plamondon has offered the Eagles social club $650,000 for their 100 year old property at 216 East Patrick Street and two small open lots to the immediate west used for car parking. The offer was revealed to Eagles’ members at a general meeting last week. A local committee has been formed to recommend next steps but the ultimate decision rests with the head office of the club in Grove City (Columbus) Ohio. Continue reading

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Gaver Guilty — first HAC chair Mark Gaver convicted for $50m bank fraud

Prominent Frederick area businessman Mark Gaver was convicted on all ten US charges of bank fraud and money laundering by a jury in US District Court today (Aug 1.) His trial lasted eight days. Gaver fabricated a stream of false and fraudulent financial reports between 2008 and 2016 vastly exaggerating to the Santander Bank his Gaver Technologies Inc (GTI) business revenues to extract loans he had no hope of repaying to the tune of nearly $50m.  Continue reading

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