Comments on Frederick News-Post’s Nancy Lavin (NL) by Peter Samuel (PS)

Downtown hotel project: a long-held idea a long time in the making
By Nancy Lavin nlavin@newspost.com 10 hrs ago 1 20160730
http://www.fredericknewspost.com/news/continuing_coverage/downtown_hotel/downtown-hotel-project-a-long-held-idea-a-long-time/article_5bb4784f-8637-5e5d-82b9-496bdf40871c.html/

NL: Like many major construction and development projects, plans for a downtown hotel and conference center in Frederick have been a long time in the making, and have evolved significantly from the first few proposals put forward more than a decade ago.
Before today’s feasibility studies, memorandums of understanding between the city and developers, and state bond bills, there were mainly early concepts and ideas — at least seven of them, dating back to 2003.

PS: This assumes that hotels can only be built downtown if City bureaucrats approve the project and if taxpayers provide upfront subsidies. Hints of public money naturally bring out those developers most adept at politics and working the system for taxpayer money.

NL: These early concepts were submitted to the city over the transom and unsolicited long before any official request for proposals was published years later. The city recently shared copies with The Frederick News-Post of these early proposals after a reporter requested them.

PS: Why the past secrecy about these proposals? Why are they being “shared” only now, and only with the Frederick News Post? These unsolicited proposals should have been announced in 2013.

NL: Today’s project proponents, who include everyone from the Frederick County Chamber of Commerce, the Downtown Frederick Partnership and the local tourism council say these early unsolicited proposals played a central role in shaping the current plan.

PS: Many aspects of the “current plan” were NOT anticipated by the early proposals. None proposed the most expensive form of parking, underground parking. None had this fetish for ‘full service’ with expensive frills like indoor pools, spas, business centers and the like. None of them emphasized ‘upper upscale’ and catering only to rich snobs as the Griffin Hotel does. None proposed an oversized monster of a building jammed onto the Frederick News Post site requiring the complete demolition of the last set of century old historic tannery buildings. None proposed a large loss-making conference center. None proposed the City buy the land and do a sweetheart leaseback.

NL: Richard Griffin, the city’s economic development director, said these early concepts helped the city figure out what developers might actually be able to build considering some of the constraints of the project — that it was to be in the historic district, was right next to a major flood-control project, Carroll Creek, and would need additional, probably underground parking.

PS: Untrue. Early concepts included several just outside the historic district and away from the flood control project. None proposed underground parking.

NL: “We actually learned a lot about what the market supports and what the community wants [from the early concepts],” he said in an interview earlier this month. “It helped lead everybody to decide that putting a Request for Proposals out and having a selection process was really important.”

PS: This doesn’t follow. If Griffin were interested in the building of “what the market supports” there would be no need for taxpayer money. What-the-market-supports is by definition what investors will build on their own nickel. What led to a City-sponsorship of the hotel was the demand of the Chamber of Commerce and City officials for hotel features that the market would NOT support, namely full-service frills, underground parking, the large loser of a conference center, catering exclusively to upper upscale patrons etc.

NL: From that RFP, a bid was awarded to Plamondon Hospitality Partners, a 20-year-old Frederick company that owns or operates six hotels in Frederick and Washington counties all branded with Marriott franchises. The latest version of the plan calls for a 200-room hotel with 24,000 square feet of conference center space with on-site parking and infrastructure improvements at the site of the old Frederick News-Post building.
The property at 200 and 212 E. Patrick St. is currently owned by a business entity formed by various members of the Randall family. The Randall family also owns the parent company of The News-Post.
The $84 million project will be funded through a public-private partnership, with $53 million put up by the developer and $31 million from various public funding sources, including the city, county and state, according to the latest project cost estimates.

NL: Proposals
Earlier ideas submitted to the city included everything from a creekside boutique hotel downtown to a hotel and conference center with a laboratory at Fort Detrick and a mixed-use redevelopment for an entire block of East Patrick Street.

The first concept dates to 2003, with a two-page site plan for a hotel and conference center east of downtown, between the Frederick Fairgrounds and Frederick Municipal Airport. Plans for the Frederick Arena, as it was called, were submitted by Frederick Industrial Park Associates. They called for a 125- to 150-room hotel with 51,000-square feet of conference center space and a 6,000-seat arena.

Albert Cohen, listed on the concept drawing as the contact with Frederick Industrial Park Associates, never pursued the plans, according to Griffin. Randy Cohen, the resident agent for the limited partnership according to state tax records and son of Albert Cohen, declined to comment for this story. Cohen owns the FSK Holiday Inn out by the Francis Scott Key Mall. He plans to redevelop that property with two new hotels and a 34,000-square-foot conference center, according to plans approved in November 2015 by the Frederick County Planning Commission. Cohen has voiced strong opposition to the downtown hotel project’s reliance on public funding compared with his project, which will be paid for entirely through private dollars. Cohen has also hired powerhouse Annapolis lobbyist, Bruce Bereano, to represent his interests in the state capital.

PS: The reporter might remind readers that the Chamber of Commerce has spent over $70,000 on lobbyists from the Greenwill group, most of that money coming from City and County taxpayers, or laundered through City-sponsored and supported agencies like the Downtown Partnership and the Tourism Council. Mr Cohen spent his own money on a lobbyist in an effort to defend his business against a predatory City-sponsored and City-subsidized competitor. Bereano somehow is a “powerhouse” lobbyist, while the Greenwill lobbyists are passed over in silence.

NL: In the 10 years after that initial proposal by the Cohens, six additional hotel proposals were offered up for consideration. The proposals ranged from a single page drawing of a 26-room boutique hotel in the Creekside Plaza building to a 20-page proposal to redevelop the 200 block of East Patrick Street with a mix of residential units, commercial space and parking, as well as a hotel and conference center.

The boutique hotel, coined “Voltique” was put forth by business partners Hilda Staples and Bryan Voltaggio, who own a series of area restaurants, including Volt and Family Meal.

The 20-page mixed use plan for East Patrick Street came from Frederick-based Dillon Development Partners and Little & Associates Architects, of Arlington, Virginia. The 2007 proposal included conceptual drawings, parking and zoning data and site conditions for each of the four lots encompassed in the plans — the former offices of The Frederick News-Post at 200 and 212 E. Patrick St. and the U.S. Post Office distribution center and parking sites at 201 and 240 E. Patrick St.

This proposal was intended as a “potential solution of mixed-use buildings that is consistent with the … zoning, sensitive to the scale of surrounding areas, and would develop a lively pedestrian-friendly link,” the document stated.

Also in 2007, Fort Detrick was floated as a potential site for a hotel and conference center project.

In 2010, Rocky Mackintosh, president of MacRo Ltd., a commercial real estate firm, introduced his own plans for a four-property site centered around the Mackintosh property at the corner of South East and All Saints streets.

Whittling away
These five early proposals all ended at the conceptual stage.
Fort Detrick officials decided a hotel and conference center wasn’t the best use of land at the military installation, The Frederick News-Post reported.
City aldermen agreed to extend a long-term lease with the National Park Service for the 5 Commerce St. building included in Mackintosh’s proposal, nixing that possibility.

As for the Voltique proposal, in a phone interview earlier this month, Staples said she barely remembered the details of the plan. She framed the concept as more of a conversation-starter than a well-defined plan.

Greg Dillon, founder of Dillon Development Partners, declined to comment when asked in a phone interview on Monday why his company never pursued its East Patrick Street redevelopment plans.

That left two other unsolicited proposals, submitted in 2010 and 2013 by The Wormald Companies, a 50-year old home building company, and Plamondon Hospitality Partners, respectively. Of the original seven, only these two were left on the table as possibilities by the time the city published its RFP in February 2014.

PS: This is shoddy, biased reporting. It completely omits the role of City officials in actively discouraging investor initiatives that did not fit the demands of the Chamber of Commerce/City DED for the many loser features and their determination to prevent any alternative to their hotel concept.

City powers via zonings, historic preservation controls and planning commission requirements are so strong no investor will attempt to proceed with their own self-supporting hotel project in the face of word from Richard Griffin that it is “not what the City needs.”

NL: The city gave JLL, formerly known as Jones Lang Lasalle, the consultant hired to help craft and work through the RFP process, a list of close to 100 development and commercial real estate companies and individuals to contact to gauge their potential interest in the project. A copy of the list was shared with The News-Post.
Several of those who submitted unsolicited proposals, including Randy Cohen and the owners of Frederick Brick Works, which Dillon Partners worked with, were on the list.

Side by side
Despite the lengthy list of contacts, and the 70 people that downloaded the RFP during the time it was open, only two companies submitted proposals: Wormald and Plamondon.

PS: And why was this? Because the eligible sites were limited in the RFP to three (the Post Office site was a strawman site since the US Postal Service was not moving) and one of the three Union Mills/Douglas was committed to office/retail. The Chamber of Commerce/City DED hotel planning clique only wanted two proposals, and they set up the sites and a site control rule specifically to limit competition.

NL: Plamondon’s response to the RFP largely mirrored the unsolicited proposal the company presented to the city a few months before. Each version of the Plamondon plan called for a 200-room hotel with a 25,000-square-foot conference center at the former News-Post offices at 200 and 212 E. Patrick St.

PS: This is the first time any unsolicited proposal ‘a few months earlier’ from Plamondon has been mentioned by any City official. There was no mention of it at the time the competitive procurement so-called was proposed. There was no mention of it when the RFP was issued. Its existence was kept a deep secret until the first days of June this year when a couple of us got the invoices and time-sheets from Jones Lang LaSalle for the period November 2013 through 2014. Those time-sheets which we shared with the Frederick News Post were irrefutable evidence that agents of the City were doing the details of the real deal with Plamondon and that the public RFP process was a sham. Wormald was treated as a theater prop, needed only to give the appearance of a competed procurement but never seriously considered.

NL: The 53-page document listed credentials for an extensive project team that included architects, preservationists and experts in private debt and equity financing. It includes renderings, site drawings, references to relevant market studies and an informal list of construction cost estimates.
The Wormald Companies’ response to the proposal included many of the same elements, though some were in less detail. The 2014 plans also amended the scope of their 2010 submission, although both used the company’s Galleria property on East Street along the south side of the creek as the project location.

The earlier 10-page document Wormald submitted in 2010 detailed a mixed-use project that included a 183-room hotel with 21,500 square-foot conference center, 39 residential units, retail space and on-site parking. Four years later, in response to the RFP, Wormalds narrowed its focus to a 220-room hotel with a 20,000-square-foot conference center.

Members of the Downtown Hotel Advisory Committee evaluated each proposal based on the criteria outlined in the RFP: financial capacity and experience of the development team; design, economic impact and scope of the project; schedule; and amount of private versus public funding required.

PS: The selection criteria were stacked against Wormald since they gave little or no weight to the merit of the site and issues such as the visibility of the hotel to visitors, ease of access off the interstates, or closeness to public parking. Instead they stressed baloney ‘economic impacts’ about which all kinds of silly baseless claims are made.

NL: Both proposals were strong, Griffin said. But Plamondon “quickly became the clear choice” when scored on the relevant criteria.

PS: Griffin has so far resisted release of the selection committee report and the scoring of each proposal, so we have nothing but his word for this.

NL: Pete Plamondon Jr., co-president of Plamondon Hospitality Partners, estimated his company spent close to $100,000 in what he described as the “due diligence” necessary to submit a proposal, a year-long process that involved multiple outside consultants.

Ed Wormald, owner and manager of The Wormald Cos., declined to give an estimate of the cost to put together his proposal, but said the work included a team of seven to 10 people over the course of a month.

Both company leaders emphasized the amount of work and level of experience necessary to respond to the RFP.

“It’s not for the faint of heart,” Plamondon said in a phone interview on Tuesday. “It costs a lot of money. It takes a lot of time.”

He also said he wasn’t surprised that the two submissions came from companies with Frederick roots. “You really have to have an understanding of the community,” he said.

Griffin also emphasized the rigorous requirements of the RFP as one reason why the city received only two proposals. The city would have welcomed, or even preferred more, he said. But the city also didn’t want anything half-hearted or half-done, what Griffin termed “tire-kickers.”

“We wanted companies that were up to the task,” he said in an interview earlier this month.

PS: So the City in the person of Richard Griffin and colleagues are setting themselves up to pass judgment on who is, and who is not “up to the task” of successful development. Now that’s big news.

NL: Questions of scope
One of the limiting factors in the RFP is that the project had to be located on one of four downtown sites. Anyone who submitted a response to the RFP had either to own one of these properties, or persuade the existing property owners to partner with them.

Wormald owned one of the properties, a 1.7-acre site along East Street known as the Galleria property. Since the company submitted a plan for its own site, it was unlikely to offer it up to another development company.

That left three options: the old News-Post site; the Union Mills site on East Patrick Street, owned by Douglas Development Corp; and the U.S. Postal Service site on East Patrick Street.

Not all were equally viable, though.

The post office site, in particular, may have been difficult for a private developer to purchase. U.S. General Services Administration guidelines allow Postal Service properties to be sold under two methods: Either the Postal Service’s hired real estate agency, CBRE Group, can advertise the property for sale on the general market, or the service can enter into an exchange agreement with a local government, such as the city of Frederick or Frederick County.

William Correa, CEO of Paragon Project Resources, said his company quickly ruled out the post office site when examining the four potential options. The Dallas-based project engineering and development company, which also has offices in Annapolis, was interested in submitting a proposal, Correa said in a phone interview earlier this month.

But the company wasn’t successful in persuading the owners of the remaining properties to get on board. “Unfortunately, they already had other arrangements,” Correa said.

Property owners also had the option of joining with multiple developers to submit different plans for the same property. In fact, that would have increased the odds, at least from a statistical point of view, of having that property chosen for the plan, Griffin noted.

“We encouraged property owners that they were more than welcome to do that,” Griffin said.

Griffin acknowledged that the four specific sites may have limited the number of submissions. But it was a deliberate decision based on intent for a central downtown location, he said.

PS: The RFP requirement for 200 rooms + 25ksf conference center made the building so large that many better sites downtown (like the old empty Co Board of Ed building on East Church and M&T parking lot next to the Pythian Castle and The Temple) were ruled out.

NL: Griffin referred to studies that show people will generally not walk farther than a quarter-mile to retail, dining and other entertainment options. To capitalize on the burgeoning availability of such businesses along Market and Patrick streets, the project team focused on potential hotel sites within that distance, he said.

PS: If the City team were really interested in the new hotel supporting nearby restaurants and bars they would not have insisted via the RFP that their hotel be ‘full service’ which is designed to provide for all the needs of patrons inside the complex. So they don’t need to patronize other businesses.

NL: “The ultimate decision was to limit [the sites] so we could make certain whatever project we got would achieve the goals related to investment in that retail corridor,” he said. “The minute you get far enough that you can’t walk and have to drive, you lose that.”
Though he was unable to secure a site for a proposal, Correa said he thought the process was fair and the project that developed from it was a good one. “I think they’re very capable and astute,” he said of the parties involved in the current project plans.
Wormald agreed. He described the RFP process as “orderly and methodical.”

PS: Developers won’t speak candidly because they fear retaliation and future difficulty getting permits if they make any public criticism of City government.

NL: Mackintosh, meanwhile, took credit for helping to get the project “off the ground” with his 2010 concept. “We really just wanted to get the whole process jump-started,” he said. “We did that.”

PS: ‘Jump-start’ doesn’t seem quite the right term for anything that has happened so far in this barely moving jalopy of a project. It certainly isn’t “off the ground” either.

The biggest failing of this report is its glossing over the flagrant violation of the City’s rules of procurement by City agents Jones Lang LaSalle (JLL), in working with Plamondon on their submission before the RFP even went out, and through the official blackout period when all communication is required to be in writing with the City purchasing office. Also remaining unreported is the City’s veil of secrecy over the actual work product of JLL and the City Attorney’s invoking ‘deliberative privilege’ to keep that hidden.

NL: Follow Nancy Lavin on Twitter: @NancyKLavin. PSam 2016.08.01

 

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