Mayor challenged to clarify five aspects of hotel deal — letter from 22 citizens

The Honorable Michael O’Connor
Mayor of The City of Frederick
City Hall
Frederick, MD 21701

Dear Mr. O’Connor:
In your inaugural address you spoke of embarking on a “new commitment to civic engagement” and of the need to “restore faith in public institutions.” You have said the city will follow the principles of “open government.” Nowhere is this needed more than in the conduct of the downtown hotel project. Transparency and candor are urgently needed in respect to:

1. Details of the May-2017 deal between the City and Plamondon Hospitality Partners, under which, according to the previous Mayor McClement the developer is taking over financing of the $13m conference center. This is a major change from the December 2015 MOU. The hotel was also being modestly downsized, and onsite car parking increased. Nine months later the City has provided no new project capital budget and no new statement of the sources and uses of funds. The details of project costs and the public-private split are now less clear than ever. Each month that passes without revised dollar estimates makes this project more mysterious and opaque. It would be in the best interest of your administration to immediately address the current cost of the project and the distribution of that cost between the investor and the public. A budget and an analysis of the chronology of changes should be prepared by your office for the Board of Aldermen and the public.

former Mayor McClement

2. The financial impact on the City of the proposed basement parking garage. After the May 2017 changes the City has taken responsibility for construction of an enlarged underground parking facility, with the top deck engineered to support the hotel and conference center. What is the capital cost and risk of this to the City? What revenues are projected from this parking garage and how far will they go to covering operating costs and amortizing debt service costs? Your office should consider it a priority to prepare a cost analysis that demonstrates the impact of this obligation on tax payers. Aldermen and the public need to know this to gain an informed opinion on whether this is a good deal for the taxpayers.

3. The financial prospects for this project need independent expert examination. MuniCap, the City’s financial consultant assessed the whole project (hotel, conference center, parking garage and retail) on completion at around $30m valuation, which makes the expenditure of anything of the order of $80m a formula for financial disaster. The last market study and financial projections for the hotel were published nearly six years ago in July 2012. Those projections were for a larger hotel and a larger conference center than now proposed. Pete Plamondon has said he has an updated study in hand, but he regards it as proprietary. That is unacceptable when the public is being asked to provide tens of millions of dollars upfront money. Any City administration committed to ‘civic engagement’ will quickly move to obtain the updated study from Plamondon and release it to the public, while hiring an independent financial consultant of its own.

4. Clarify the standing of the Hotel Advisory Committee (HAC) and require it to comply with state law on open meetings and public access. The HAC was not compliant in either regard during the last administration. The HAC has played a major role in developing the hotel project. Mayor McClement represented it as a City-created body, announcing at the beginning of his term that he had created it. He appointed its chairmen (first Mark Gaver, then Earl Robbins.) Senior City staffer Richard Griffin called the HAC’s meetings and wrote the agenda acting as its executive secretary. He also made most of the public presentations on behalf of the HAC. It had its meetings in City Hall. But the meetings were problematic. There was no public access, no notification, no agenda, no minutes. In response to a complaint about the HAC to the State’s Open Meetings Compliance Board the McClement administration told the state that the HAC had been a Chamber of Commerce body all along. Allowing a non-City entity to conduct city business and make huge financial commitments on behalf of the city is an abysmal way for the City to engage in the biggest development project in recent history. What was the City doing delegating to the Chamber of Commerce the specifications for the hotel, the selection of sites, the procurement of a developer, the hiring of consultants, etc.? Why was Griffin paying such dominant role in furthering a Chamber of Commerce led project? Why was there not a single elected official on the HAC? The public needs reassurance that the days of closed doors are over and that this project will in future be conducted according to the state’s legal requirement of open meetings and accessible records.

Richard Griffin

5. The Mayor and Board deserve accurate reporting from City staff on negotiations with state agencies. False and misleading comments should never be allowed and the Mayor’s office should confirm the accuracy of each report issued. For example, Richard Griffin in his Executive Summary for the Mayor and Board workshop of February 7, falsely claimed the Maryland Historical Trust had “provided final comments” on January 26- implying that these were incorporated into the draft MOA he provided. This draft MOA was represented as a virtual done deal when it was nothing of the kind. The state agencies are continuing to deliberate and negotiate mid-February. Staff misreporting of this kind should not be tolerated by your administration.

It is easy to make rhetorical commitments to openness, civic engagement and public participation. The test of real commitment to these ideals comes with controversial projects like the City-sponsored hotel. In our opinion Mayor McClement failed dismally on this score, but your new administration has an opportunity to restore transparency and candor to this process.

Thank you for your prompt attention to our concerns.



Signed by 22 citizens of Frederick

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