‘Please don’t fund Frederick project’ — ten strikes letter to Secretary Housing & Community Development

Mr Kenneth C Holt, Secretary, Department of Housing & Community Development, 7800 Harkins Road, Lanham MD 20706   Dec 9, 2016

Dear Mr Holt: A number of us here in Frederick have taken a close interest in the City-sponsored Downtown Hotel and Conference Center project, and concluded that it is so seriously flawed it should be abandoned. We therefore urge you to desist from any further grants to the project. The City of Frederick currently has an application pending for $1 million from your department’s Strategic Demolition Fund grants program.

Briefly here are ten strikes against the hotel project:

Strike #1 was the specification for the hotel 200 rooms, 25,000 square feet conference center, upscale, full service – a wish list of a bunch of hotel amateurs from the Chamber of Commerce, Downtown Partnership, and City DOD. Hotel professionals say these specifications are excessive for a City of the size and location of Frederick, in particular that 200 rooms is too large for a high priced 4-star quality hotel. The project’s consultants said the planned conference center was too large and were pessimistic about it getting much beyond local usage.

Strike #2 was site selection – selection of a site based on a theory of development catalytics that has produced an unsuitable site for the building specified… now acknowledged as unsuitable via negotiations to buy the Eagles property next door.

Strike #3 was the sham competed procurement under which the developer Plamondon was selected, their proposal being submitted, dissected, and discussed internally at the same time that the RFP terms were being written — as revealed earlier this year in the time sheets attached to invoices by consultant James Lang LaSalle.

Strike #4 was the biased scoring of the two proposals, ridiculously favorable to Plamondon and the FNP site when an objective scoring would have selected Wormald and the Galleria site. For example Plamondon/FNP was scored ahead of Wormald/Galleria on historic preservation and parking even though Plamondon/FNP requires demolition of a ‘contributing resource’ of the historic district while Wormald/Galleria is free of any historic building, and Wormald/Galleria is right next to an underused parking garage whereas Plamondon/FNP ism still in 2016 unable to locate adequate car parking.

Strike #5 has been the absurd boosterish propaganda about the $26m/year spending, 280 jobs and $1.5m taxes this will generate, numbers which assume average daily spending by visitors of over $300, and completely fail to account for any offsets from competition with other businesses. The downtown needs hotels plural, but rightsized for the historic district, distinctive lodging places catering to a variety of tastes and price points, not a City promoted mammoth monopoly Marriott pitched to imaginary big-spenders. Conference centers are problematic being heavily oversupplied nationally and regionally. Ft Detrick, Frederick’s leading employer prefers on-campus conferences.

Strike #6 has been the long tortuous search for ‘partners’ culminating in two state agencies declining to participate, the inability to find anyone who wants to ‘own’ the public side of the project. Frederick Mayor McClement has always insisted that the City will NOT own a conference center and will not take financial responsibility for one, and that any support must come from state agencies. City taxpayers will never be put ‘on the hook’ he has said repeatedly for local consumption. The City in effect does not want real partners, but state support for a developer’s hotel complex.

Strike #7 has been the cost which has gone in three or four years from $45m to $84m, almost doubled, and the taxpayer share from $11m to $31m, almost trebled. Those are official City DED numbers. Forella Group MSA’s costing consultant produced much higher cost estimates.

Strike #8 is the waste involved. What do we get for the $84m? What is it worth? MuniCap in an unpublished (but PIA obtained) report for the City looked at comparable establishments. They projected likely cash flows for the Frederick project, discounted them to present value, and got $29m. So we propose to spend $84m to build a facility worth $29m. This is scandalously wasteful and fiscally irresponsible.

Strike #9 is the incompatibility of this huge Walmart-sized big box on East Patrick St with Frederick’s downtown historic district and the “need” to demolish the Birely Tannery building — the last remaining building from Frederick’s leading 19th century industry. The proposal has yet to go to the City’s Historic Preservation Commission which is proudly independent of City officials. The Plamondon/City DED sponsored project faces major problems gaining a City building permit because of historic preservation, traffic impacts and lack of any parking plan.

Strike #10 is the ogre effect of this project. For seven years and more it has been scaring off self-financing investments in lodging that would fit the downtown – 30, 40, 70 room hotels. The City DED sponsored hotel is preventing entrepreneurial right-sized hotels in downtown Frederick which could make use of 2 and 3 story vacant blighted buildings and ugly surface parking lots.

All these points are documented in a trove of research including nearly 200 posts at the website frederickhotelboondoggle.us and at a Friends of Frederick County Downtown Marriott Watch Facebook page. Five of the eight Frederick County delegates to the General Assembly in Annapolis now oppose further state support for this project. At the County level the margin of support is narrow: four in favor, three against. Among the City officials, the Mayor and Board of Aldermen support is apparently solid. But it is fragile, based on the state coming through with the upfront subsidies and on no risk to City taxpayers.

This is a misconceived, mismanaged project that deserves no more state support.

Jane Weir, Concerned Citizens of Frederick County, 27 East Main Street, Middletown MD 21769

Peter Samuel, Downtown Resident and Writer, 102 West 3rd Street Frederick MD 21701

2016.12.09

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