Procurement RFP14J workshopped but never presented, discussed or voted on by Mayor & Board at public hearing

City records show that the key procurement, RFP14J, in which a developer was sought for the downtown hotel was never presented, discussed, or voted on, at a public hearing of the Mayor and Board of Aldermen back in 2013/2014.  The City Purchasing Policies and Procedures Manual requires that for contracts over $49,999.99 “the solicitation document along with all backup shall be submitted… for approval by the Mayor and Board of Aldermen” (p36.) Adopted as a Resolution by the Mayor & Board this represents City law.

Without any Mayor & Board approval of the terms of the RFP14J procurement it is unclear that there was a legal basis for the selection of the Plamondon company announced in August 2014, and ratified in a City-Plamondon Memorandum of Understanding (MoU) signed on December 23, 2015.

July 31, 2013 Workshop: from left clockwise Ald Russell, Young, Mayor McClement, Ald O’Connor, Krimm, Aloi, three bald heads of project presenters Griffin, Robbins, Gibb

At a Workshop of the Mayor & Board of Alderman on the evening of July 31, 2013 there was a presentation on the general shape of the proposed procurement which became RFP14J. But that was the last occasion the procurement was publicly put to the Mayor & Board before the issuance of RFP14J on February 19, 2014 — despite this promise from the Workshop’s lead presenter, Earl Robbins chairman of the Hotel Advisory Committee (HAC): “We will be coming back to you very soon, making some recommendations on such things as site selection and getting your support for the financial strategy we will use.”

HAC chair Earl Robbins

And after discussion in the July workshop HAC chairman Robbins doubled down on his promise to be back: “Just to say, our team will be going through this process and we will be coming back to you, Mayor and the Board, within a couple of weeks with our recommendations and you will give us directions as to the way you would like us to go.“

A search of the agendas of all nine Mayor & Board (M&B) hearings and 21 M&B workshops between the July 31, 2013 Workshop and the issue of the RFP for the hotel developer/site on February 19, 2014 turns up no indication that the HAC ever came back to the M&B to get their endorsement, as promised. And there are no reports of the M&B in closed session on the hotel.

Richard Griffin, secretary of the HAC, and head of the City Department of Economic Development told us in a telephone conversation (3/19) in connection with writing this that they got Mayor & Board approval for “everything” they did, but he couldn’t remember the detail of how they followed up the workshop on RFP14J. He challenged me to remember what I was doing in the second half of 2013 (selling my little publishing business.) He promised to have the matter researched. I’ve also submitted a Public Information Act request.

John Gibb, JLL

Then-HAC Chairman Earl Robbins has not responded to a request for interview.

Shelley Aloi, an Aldermen of the time says there was no public hearing followup and that Earl Robbins and JLL never came back to the Mayor & Board. Instead Richard Griffin had several non-public meetings with Aldermen in that latter half of the year.

It should be noted that around this time there was the four-yearly election in which Mayor McClement and the aldermen were running for re-election in November 2013, so the campaigning was quite a distraction from issues such as this.

Closed meetings require vote & statement of reason

Could the matter have been hashed out in a closed meeting? The State Open Meetings Act §3-305(b)(1) lists 14 circumstances in which public bodies such as the Mayor & Board may meet in closed session. It is unclear that any of the 14 apply here, though a desperate lawyer might make an argument with a couple of them.

But that’s not the only state legal requirement.

Ald. Karen Lewis Young

§3-305 (d) requires a vote to approve going into closed session (d) (1) and a written statement of the reason for the closed session (d) (2) (ii). The written statement has to be “a matter of public record.”

If there had been a lawful closed session of the Mayor & Board to approve RFP14J there would have been a vote to go to a closed session and a written statement of the reason in the Minutes of Mayor & Board hearings in the eight months between the Workshop and the issuance of RFP14J by the City Purchasing Office.

It’s not there.

The procurement at the heart of the downtown hotel project looks to be illegitimate — done without lawful authority and in violation of promises at the Mayor & Board workshop.

Not just legalisms

Griffin

And it is not just a matter of legalisms. There was an important public policy issue in play here: Did the City want the best possible deal for the City and all its citizens by being wide open to proposals from locally unknown groups? Or was it really out to do a sweet deal for the local good guy, generous giver to our charities, friend of every local politician, Pete Plamondon? A procurement that would be wide open, or a heavily constrained pretend-competition? Would small-town cronyism prevail?

Local officials too often talk out of both sides of their mouth, declaring publicly and on the record that they are open to proposals from all, and reject local favoritism, while being influenced by longstanding local friendships and financial support when it comes down to an actual procurement.

City officials have consistently said they wanted best value for the citizens and open competition for the downtown hotel. Jones Lang LaSalle consultants took them at their

Ald. Michael O’Connor

word. In that last presentation to the Mayor and Board of Aldermen (BOA) at the Workshop July 31, 2013 the HAC/City consultant John Gibb of Jones Lang LaSalle (JLL) described the competition-enhancing two-stage procedure under which the City would first procure a site, and in a second stage invite an unlimited number of developers to make proposals for a hotel on that site.

In his summation: “So what are the next steps? Well first we need to bring all of our thoughts together and recommend which site is the best one. We need then to secure and acquire the site, secure the public financing. It’s not a snap your fingers to get MSA (financing) You need to go to the legislature to get approval for that. It is a long… it’s a process. And then to get developer request for proposals with that RFP to get developers come in and to get the best deal for the City of Frederick. So those are the steps, (we) welcome any questions.”

There were questions but not about the form of the procurement. The Project Schedule slides distributed to the Mayor & Board preparatory to the meeting showed the pro-competition two-stage procurement in a slide headed ‘Project Schedule’ (displayed nearby.)  In that slide two stages are clear in the project schedule chart with site selection shown in green bars and completed to the point of the City controlling a site by September. Only in October would the City begin seeking a hotel developer, the procurement being quite separate and indicated in a salmon pink.

Ten weeks after the summer workshop of the Mayor & Board Jones Lang LaSalle produced a report titled Downtown Frederick Hotel, Site Acquisition Strategy Recommendation, dated October 11, 2013. It states: “An initial question  posed to JLL was: ’Should a site be selected first or should a hotel developer be selected first?’ JLL’s recommendation was (and continues to be ) to select a site first and secure it through option agreement or land purchase contract. Once the site is secured, steps to select a hotel developer through an RFP process can commence.” p4

“(T)wo key benefits” are cited: reducing risk to developers (and improving what they are likely to offer,) increased City negotiating leverage over the land as compared with later acquisition from a developer. They repeat the need for the two-stage procurement at the very end of the report (p9) with mention of an improved “competitive process.”

Benefits would have included site procurement done directly by the City using its established procurement procedures, and subsequently, with the 2nd RFP for a developer, a large pool of potential developers. JLL’s John Gibb as well as HAC chair Earl Robbins told the aldermen at the 2013/07/31 workshop that they would be back within weeks presenting their procurement proposal in more detail.

But without ever coming back to the BOA — in any public hearing anyway — the HAC proceeded to dump the competitive procurement they had presented to the Aldermen, adopting instead the single stage procurement of developer-with-site. There were three rules that heavily constrained competition. These were (1) the requirement that bidders have ‘site control’— (ownership or a contract to buy the site (2) sites limited to four HAC pre-approved sites (3) a short six week* deadline to the request for proposals (RFP.)

The promised two stage, open procurement was compressed into an anti-competitive procurement in the spring of 2014 that generated only two bids — from the Plamondon and Wormald companies on the Frederick News-Post and Galleria sites, respectively. There were four eligible sites. However one was the old USPS Post Office site, completely impractical in the time provided. And the second East Patrick Union Mills site, which the Jemal company owner had committed to renovating for office space.

Griffin says aldermen had no taste for laying out $s to acquire site

Asked about the two stage procurement Richard Griffin told us it was never really an option: “There was never any taste for putting out City money to buy a site. None of the Mayor and Board was interested in buying a site, then being left with a site if the project fell through.”

He conceded JLL may have favored that course but it was never on the cards for the City.

I put it to Griffin that the City could have done a contract-to-buy (of the kind Plamondon  has with the Randalls) on its preferred site then opened that site up to unlimited developers.

Griffin said that wasn’t considered. Everyone wanted the developers to bring their sites.

That isn’t credible.

The two-stage procurement was presented as what was going to happen in both the printed materials distributed before the Workshop and by John Gibb of JLL in his spoken presentation. There was no mention at the workshop of the single-stage option or of limiting competition with the bring-your-site rule and a short deadline — as embodied in RFP14J as issued.

So what happened?

MY HYPOTHESIS: Following the workshop it looks as though insiders favoring Plamondon decided that with the distraction of the City elections they could get away with a radical rejection of the open competition embodied in the two-stage procurement so long as they avoided a full Mayor & Board hearing. It would have been difficult at such a M&B meeting to avoid discussion of the restrictive procurement rules embodied in the then-draft RFP14J.

Alderman Shelley Aloi

And it would have been difficult to justify the change of direction. JLL arms might have had to be twisted to get the consultants to disown the competitive two-stager that they had publicly and privately advocated. Better to simply avoid having them go back to the Mayor & Board.

The Mayor & Board had offloaded much of the responsibility for the procurement to the Hotel Advisory Committee (HAC) a body which was represented at the time as appointed by the Mayor, and in effect a City entity. But since it met behind closed doors, published no agenda or minutes we have no knowledge of how the procurement procedure was debated there. Or even if it was debated.

When its conduct as a City body was challenged at the state level last year for conduct in flagrant violation of the state Open Meetings law the HAC had to be disowned by the City. Major McClement and staff must have ‘misspoken’ they said in representing the HAC as his creation on about 157 occasions. The official City line suddenly became that the HAC has been an entity of the Chamber of Commerce all along, with City staff just attending as observers.

Review of RFP14J by the HAC as a Chamber of Commerce entity is now hardly a credible substitute for a hearing of the Mayor & Board!

Another clue is that Plamondon’s proposal was secretly received by City DED staff toward the end of 2013, about three months before the RFP was officially issued! JLL invoices and time sheets show the consultants were put onto working with Plamondon’s proposal in parallel with drafting the RFP for the pretend competed procurement. The fix was in. Why bother the politicians preoccupied with their elections, and their immediate aftermath?

2018.03.27

March 19 email to R Griffin

Richard: Good to talk this morning. As you suggested I am putting my issues in email form. I’d appreciate if you could research 3. first. I have twice gone through all the agendas and can find nothing at M&B by way of followup. If there was a followup that somehow I missed or which Granicus missed then that could change the narrative in important ways.

Peter Samuel

(NOTE: A colleague has double-checked my search and confirmed there was no return to the Mayor & Board on the procurement following the Workshop. P Sam)

CORRECTION: In quoting from the City’s Purchasing Policies and Procedures Manual I abbreviated a passage from p36 by omitting text in the second sentence, and should have used an ellipsis or three dots (…) to indicate this. I have added the necessary ellipsis. My mistake did not change the meaning of the quoted material.

Mayor & Board weigh-in on RFP14J

ISSUE 1: The Mayor & Board (M&B) workshop July 31 2013 was the last opportunity for M&B to express their views on the procurement, and the form of the procurement changed sharply after that workshop.

M&B, McClement, CL Young, O’Connor, Russell, Krimm, Aloi present

http://cityoffrederick.granicus.com/GeneratedAgendaViewer.php?view_id=16&clip_id=1803

video available here:

http://www.cityoffrederick.com/901/8709/City-Online-Meetings

Two stage procurement was presented to M&B workshop, City secures site first, then calls for proposals for hotel on the chosen/secured site

— see time block chart of the Project Schedule p3 JLL powerpoint attached to Exec Summary shows site selection in green and ’Negotiate site control’ completed by Sept 2013 after which in salmon pink as a separate operation ‘Developer RFP’ starts in Oct-2013

— John Gibb says in his presentation summation: “So what are the next steps? Well first we need to bring all of our thoughts together and recommend which site is the best one. We need then to secure and acquire the site, secure the public financing. It’s not a snap your fingers to get MSA (financing) You need to go to the legislature to get approval for that. It is a long… it’s a process. And then to get developer request for proposals with that RFP to get developers come in and to get the best deal for the City of Frederick. So those are the steps, (we) welcome any questions.” (summing up at the end of his presentation)

NOTE earlier Gibb did say strangely that the next step would be the developer RFP but there was no reference there to how sites would play into that, and as quoted above he contradicted any notion of asking developers to bring their own sites in his summation.

CONCLUSION 1: the M&B were given the strong impression that the two-stage procurement was being proposed — site-secured-first-then-developer

2. M&B workshop was told that they would be given more precise proposals by the HAC and given the opportunity to weigh in on those within weeks

— Earl Robbins speaking for HAC:

“Over the past 4 months we have been working with Jones Lang LaSalle, which with your approval, were hired as our consultants.  We have been working on a  number of parallel paths, looking at site acquisition, developments for selecting a developer, financial matters. And we will be looking at the advice they have given us, and we will come in to talk to the Mayor and the Board. We will be coming back to you very soon, making some recommendations on such things as site selection and getting your support for the financial strategy we will use.” (at 00:23:00)

Earl Robbins later: “Just to say, our team will be going through this process and we will be coming back to you, Mayor and the Board within a couple of weeks with our recommendations and you will give us directions as to the way you would like us to go.” (at 00:33:20)

KL Young, chair BoA  close to the end, clearly expecting the followup: “… it would seem to me there are some issues here for the next steps that are pretty granular so maybe it would be appropriate… when we reconvene as a board we can take it to a higher level and get some of the detail ironed out.” (01:01:00)

CONCLUSION 2: The M&B was told there was to be a followup opportunity for them to hear more precise proposals from the HAC and to weigh in before the procurement proceeded. Ald KLYoung chair of the BoA clearly expected it to come to the Board as promised by HAC chair E Robbins.

3. No evidence of any followup by HAC before the February 2014 RFP14J issued

I have gone through the Agendas of all the M&B hearings and workshops between August 2013 and February 2014 here

https://cityoffrederick.granicus.com/ViewPublisher.php?view_id=15

and here

https://cityoffrederick.granicus.com/ViewPublisher.php?view_id=16

I cannot see any indication that the HAC returned to the M&B. In February 2014 the HAC/City issued RFP14J.

CONCLUSION 3: With the single stage procurement RFP14J of February 2014 the HAC/City DED departed sharply from the two-stage procurement described to the M&B at the workshop of July 31, 2013, apparently the last Mayor & Board consideration of the procurement. The Board of Aldermen were not given the opportunity to weigh in on that RFP14J procurement.

I’d appreciate comment on this. END

CAPTIONS NOTE: the captions show the titles of people at the time of the workshop in the summer of 2013.

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