Department of Legislative Services recommends ‘de-authorization’ of state funding for boondoggle hotel

The General Assembly’s Department of Legislative Services (DLS) has recommended ‘de-authorization’ (cancellation) of state funding for the City-sponsored downtown hotel project. DLS analysis notes that the Governor’s 2017 budget proposes to de-authorize (cancel) $1 million general obligation (GO) bonds for a grant to the City for the project.

The City was never able to get hold of the grant because it was conditioned on a multi-party agreement or MOU with the Maryland Stadium Authority (MSA). Last fall MSA’s board of directors were unanimous that it should have no part of the Frederick City project.

The DLS notes the Governor budget’s omission of $7.5 million previously authorized, actually ‘pre-authorized’ for FY2018 and another tranche of $7.5m for FY2019, and states:

“Essentially, the Governor’s five-year CIP (capital improvement program) removes all funding support for the project.”

It goes on: “Absent a State commitment to the project, it is unclear if the developer will press forward with the overall project as envisioned or remove certain public elements such as the conference center portion.”

Then in bolded type: “To the extent that the State is not prepared to participate in the project as envisioned by the developer, the city of Frederick, and Frederick County representatives as set forth in the 2016 session authorization and preauthorizations for the project, DLS recommends that the committees approve the de-authorization of $1.0 million…”

All this appears under a City listing of proposed contributions to the project for what it called ‘public infrastructure’ in millions of dollars

$2.20m City Tax Increment Financing (TIF) Bonds or Similar Financial Mechanism

$1.00m City Parking Fund – Cash

$2.50m City Parking Fund – Parking Revenue Bonds

$0.25m City Capital Improvement Program

$2.80m County TIF Bonds or Similar Financial Mechanism

$3.50m Tourism Council of Frederick Maryland

$0.25m State Fiscal 2012 Bond Bill

$1.00m State Fiscal 2017 General Obligation (GO) Bond Grant

$15.00m State Fiscal 2018 and 2019 GO Bond Grants

$1.85m State Department of Housing and Community Development

$30.35m Total

Also

Under a heading Solving the Problem ($ in millions), Exhibit 8 in the Capital Budget Fiscal Briefing, Department of Legislative Services, Analysis of the FY2018 Maryland Executive Budget, 2017, p13 there is a list of Significant Reductions the Governor proposes in the state’s capital program. One of the items reads: ‘MISC Downtown Frederick Hotel and Conference Center……. – 7.5

On p32 of the same document $7.5m is listed as a 2018 Pre-authorization for Miscellaneous Grant Programs – Downtown Frederick Hotel and Conference Center with 0 (zero) under 2018 Governor Recommended and under Comments: Project not funded in 2017 CIP.

On p45 Appendix 3 in a list of GO Bond De-authorizations is the Downtown Frederick Hotel and Conference Center – 1,000,000

http://mgaleg.maryland.gov/pubs/budgetfiscal/2018fy-budget-docs-capital-CAP01-Capital-Fiscal-Briefing.pdf

2017.03.13  12.04

 

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