Delegate Kathy Afzali and colleagues:
Recent developments confirm the good judgment of the majority of the Frederick County delegation in opposing state funds for the City’s boondoggle hotel. The case against state support is stronger than ever.
1. New proof that City officials knowingly minimized competition
In September this year an October 2013 report by the City’s lead consultants Jones Lang LaSalle (JLL) surfaced showing that the City disregarded advice to conduct a two stage procurement in order to maximize competition. JLL argued that four sites were about equal in desirability and recommended securing a site first, then second procuring a developer in unlimited open competition to develop the hotel complex on the chosen site. That way the City might get six or eight developers competing. The recommendation of a 2-stage procurement was rejected, and only two proposals were made because of a rule that bidding be limited to parties owning or having a contract to buy the site.
This reinforces earlier evidence that the City engaged in a fake competed procurement, having received the winning proposal late 2013 even before the RFP was completed in early 2014, treating only that proposal seriously as measured by distribution of hours in the JLL invoice time sheets.
Under Maryland law §12–102. (a) (2) (iii) the Board of Public Works staff is required to examine procurements like the City’s RFP14J to see that they have been “competitively conducted” and have “followed procurement law, regulations, and best practices.”
The Board of Public Works has ample grounds for withholding state funds for the Frederick boondoggle hotel project.
2. Propaganda claim that taxpayers “only paying for public infrastructure”
Debate continues to be muddled by proponents’ claims that public funds are only being used for associated “public infrastructure.” This has never withstood scrutiny. The land cost to be borne by taxpayers — especially when artificially inflated as a favor to a crony owner — is NOT public infrastructure. Many millions of dollars of ’soft costs’ (finance consultants, lobbyists, cost estimators etc) for the whole project are NOT for infrastructure. They are for the whole hotel complex, most of which is hotel.
Then there’s the conference center portion of the project designed to be operated by the hotel as an integral part of the hotel business. Only by a hearty stretch of the language could this ever be called ‘public infrastructure.’ On May 18 at the unveiling of new plans for the hotel Mayor McClement said he was proud to be able to say that under the new deal with a slightly reduced hotel the developer would fully fund the conference center. Trouble is, the City says in a answers to PIA requests, that there is no documentation of any new financial arrangements with Plamondon — not a single email sent or received, no memo of understanding, no record of conversation, nothing. Mr
Pete Plamondon has never acknowledged any new financial arrangement in which he would fund the conference center. City officials have conceded that the controlling legal contract is still the City-Plamondon MOU of Dec 23, 2015, which showed public funds carrying the cost of the conference center. Since that May 19, 2017 announcement of new plans and new financial arrangements under which the developer would carry the capital costs of the conference center there has been no updated project capital budget and no revised matrix of sources and uses of funds. The City has simply ceased publishing estimated project costs and their allocation between the developer and public funds.
The statement that public funds will be used only for public infrastructure while admirable in principle is meaningless without an up-to-date capital budget. The State is being asked to provide financial support to a project that is almost completely unspecified as to cost and developer and public contributions.
3. Shadowy Hotel Advisory Committee the mover & shaker
Over about eight years now the downtown hotel project has been conducted by a shadowy ‘hotel advisory committee’ (HAC) combining city and county officials and a small insider cabal of local business groups. Despite statements by the Mayor and other City officials that the Mayor appointed the HAC, despite the fact that its meetings have been called by the City’s Richard Griffin, and despite the fact he set the meeting agendas, despite the fact that the City has paid for HAC consultants, despite the fact that the meetings were held in offices in City Hall, the City Attorney is arguing that the HAC is under the control of the Chamber of Commerce, and that the City has no power over it. This is the City’s explanation to the state Attorney-General’s office as to why the Open Meetings Act does not apply to the HAC. The activities of this body on which not a single elected official or legal officer or citizen group was represented would never have survived the light of public scrutiny if it had complied with state law on open meetings of such public bodies.
4. Private investors CAN fully finance hotels in downtown Frederick — Visitation Hotel underway
Owners of the vacant Visitation Academy on East 2nd St plan to convert the main building into a 60-room ‘boutique’ hotel plus meeting rooms, and without asking for any special taxpayer support. This gives the lie to the notion that lodging downtown can’t be fully investor-financed. There are a handful of other sites suitable for hotels of between 20 and 250 rooms in downtown Frederick and there is no justification for spending scarce public funds on them.
We urge you to continue and strengthen your opposition to this rotten City project and to work to prevent state funds being used for it.