Present Michael Frenz (executive director MSA), Gary McGuigan (capital projects development group MSA), Jane Weir, Peter Samuel at splendid offices in the old Warehouse, Camden St Baltimore:
— we opened saying we have various criticisms and many questions about the project but hope to gain an understanding of where the MSA stands on financing the DH&CC project in Frederick, and wished to have the personal rapport to ask questions and offer opinions as it unfolds.
— Jane spoke to the potential soil contamination at the site, the limited studies done on this, and possibly heavy liability for remediation. The MSA officials did not respond on this but ED Frenz made some notes.
— McGuigan gave a potted history of the MSA and its changing roles.
— I asked how they approach the project. Frenz said the MSA’s role in the Frederick project is to follow the legislature’s instruction to explore an agreement with local authorities and the City-selected developer while minimizing the cost and risk to the state, and preserving the good reputation of the Authority
— MSA is very busy, Frenz said, with school financing and the new Baltimore blight assignment from the Governor and is not looking for new projects
— MSA does not endorse or advocate for the Frederick project, its role is to advise as requested, and follow the law as instructed. The law is clear on the first stage which is reaching a 4 party agreement, but less clear at this time on the $15m of lending that may follow. That might take many forms, general obligation bonds, revenue bonds or TIF, it is too soon to tell.
— Frenz said the MSA has NOT endorsed the proposed financing as the City has claimed. It had in response to a request from the City only “done the arithmetic” to calculate what $1.5m in extra taxes would support by way of tax increment financing. It has not passed judgment on whether the project was viable.
— on the 4-party talks there has been only one meeting so far. It was in Frederick and McGuigan represented MSA. There was not much to report out of that.
— last fall before the City and Plamondon agreed on the terms of the MOU the MSA had advised the City on two subjects, (1) the accuracy of the cost estimates and (2) the business terms of the MOU. We said we’d like to read the advice they gave the City. Frenz said the MSA has no problem releasing that and we should file a PIA request.
— MSA officials spoke highly of their “on-call economist” Crossroads Consulting (Susan Sieger) saying she had provided “good advice” over the years, advice they said was “objective” and “conservative.” Clearly she is influential at the MSA.
— we pressed them as to whether they plan to require an update of the feasibility studies, but they were non-committal on that, saying they have no plans themselves to do an update.
— we asked them whether they were concerned about sponsoring a project directly competitive with a private business that was prepared to do a comparably sized new hotel and conference center on investor funding alone (the Holiday Inn at FSK Mall)
— they said no one had mentioned the competition and seemed interested and asked questions about it (Is that project going ahead? McGuigan asked, how close is to the downtown? Frenze asked)
— both readily agreed that the DH&CC although it might be branded as upscale and pitched to a higher-end guest than the Holiday Inn, the DH&CC would in practice be cutting prices and doing deals to fill rooms that would make it competitive with other hotels
— we asked them if it was correct as the Holiday Inn lobbyist (Bereano) said in the hearings on HB1474 in Annapolis that the DH&CC project would be new for the MSA in financing something in direct competition with a private business. They said No, citing the Hippodrome in Baltimore as competing with investor financed projects, and said other MSA projects (unnamed) also compete with fully investor projects in the vicinity or providing an alternative.
— will the MSA be lending to the whole hotel/conference center complex or only to the ‘public’ segment of the project. After some discussion they came down as saying their loans would be to finance the ‘public segment’ not the hotel.
— as the meeting broke up I commented that the project still needs to pass a difficult review process at the City Planning Commission and the Historic Preservation Commission and may well die there. They seemed a little surprised at that, I thought, as if it was news to them, but they did not comment.
P Sam 2016.05.24