Why the City-sponsored hotel is wrong

This website is dedicated to documenting what’s wrong with the City-sponsored hotel project here in downtown Frederick. We’ve written about:

— how and why the project was launched (because hotel developer Pete Plamondon thought such a hotel could pay once the State provided a new gateway off the Interstate and if the City would carry the cost of the conference center that the Chamber of Commerce wanted)

— how the City’s ran a fake competed procurement in 2013 (by outsourcing procurement to the shadowy Hotel Advisory Committee, rejecting their consultant’s plan for competition, limiting proposals to owners of a couple of approved sites, then doing an outrageously biased scoring to eliminate Plamondon’s competitor)

— what a lousy site they’ve got for such a large hotel complex (because after preserving the Trolley Building they have almost no street frontage and cannot sensibly locate access to parking and deliveries)

— how they are doing unnecessary damage to the historic legacy of the site (which has two historic buildings deemed to be of ‘unusual historic importance’ and a major archeological treasure trove)

— how the City’s management of the project is a landmark case of ineptitude and missed deadlines (being three to four years from the hotel’s grand opening as far back as 2010, remaining three to four years off to this day)

— how the City has flouted state law on open meetings of the Mayor’s Hotel Advisory Committee (a corrupt cabal of unelected government officials and special interests that has been conspiring behind closed doors to extract favors to the tune of tens of millions of taxpayer dollars)

— how the project has misused expert consultants (disregarding their advice when it fails to fit the HAC’s political objectives, and allowing so much time to pass that their data is ancient history)

— how the project is wasteful and a likely financial failure (its cash flow providing a valuation on opening of around $30m bought at a capital cost of some $80m.)

— how serial dishonesty and obfuscation has characterized the City DED’s conduct of the project (examples: repeatedly citing estimated site ‘impacts’ as net City impacts, confusing gross with net effects, stretching to absurdity the term ‘public infrastructure,’ suppressing for a year the devastating Forella costing report, failing even now to acknowledge the architects’ difficulty in producing a workable site plan without acquisition of adjacent lots for which there is no money)

But what underlies all this malfeasance in our city?

Disregard for the principle on which this nation was founded, the b belief that all men are created equal, and the corollary that no man (‘person’ in modern english) should be chosen by government for special favors: that there is no rightful privilege for one over another. This fundamental American principle was trashed when the City of Frederick decided in 2010 that a chosen hotel developer should gain tens of millions of dollars of governmental support to build a downtown hotel, support which was not available to other hoteliers.

The Boston Tea Party of December 1773 was of course a protest against taxation without representation, but the tax imposts imposed by the British arose out of London’s efforts to bail out the East India Company which had a British government-granted monopoly of the legal tea trade. American merchants’ support for the Tea Party was a protest at the financial privilege enjoyed by the East India Company and its consignees.

Why stopping privilege is a cause to fight for

Here: “Government-granted privileges are pathological. Privileges limit the prospects for mutually beneficial exchange—the very essence of economic progress. They raise prices, lower quality, and discourage innovation. They pad the pockets of the wealthy and well-connected at the expense of the poor and unknown.

“When governments dispense privileges, smart, hardworking, and creative people are encouraged to spend their time devising new ways to obtain favors instead of new ways to create value for customers.

“Privileges depress long-run economic growth and threaten short-run economic stability. They undermine cultural mores, fostering cronyism, blurring the distinction between productive and unproductive entrepreneurship, and eroding people’s trust in both business and government…

“If we are to restore the economy and the body politic to health, we must rout out and eliminate the sources of government-granted privilege. And if our institutions are to remain healthy, we must develop a better understanding of the sources of privilege and the ways to guard against it.”

from The Pathology of Privilege, The Economic Consequences of Government Favoritism, Matthew Mitchell, Mercatus Center, George Mason University, Arlington VA, 2014



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