8 Talking Points about the new MOU or deal between City and developer Plamondon for Downtown hotel

Eight talking points written for Mayor & Board meetings on the proposed new MOU between the City and hotel developer Plamondon:

1. Plamondon the developer will now fund the conference center as well as the hotel, but the City will build a much larger basement under the hotel complex along with a structural platform or ’podium’. This is a bad trade, because building in the muck of the Creek is risky. The MOU claims it saves money but that’s not credible. Say No to paying for Plamondon’s Podium. It’s not infrastructure, it’s a boondoggle. 

2. State support for the project has dropped away and the most it can get is $5m versus $16m expected earlier. More of the share of the risk and the cost is therefore now on County and City taxpayers. The new MOU puts the upfront ‘public funding’ at $17.5m of which the basement and podium is supposedly $11.6m, but there is no solid basis for the estimate. The City wants Plamondon to manage the building although it will foot the bills. Bad idea.

3. Proposed funding depends heavily (over 90%) on borrowing based on projected revenues streams from the new hotel. This is dangerously irresponsible. Unless the hotel visitors are coming directly from Mars, the people spending money at the new downtown hotel will be spending less elsewhere. People will stay at one hotel or another. Overall revenues will be much the same. There are no free lunches for taxpayers. Money given to a City crony is not money you will get back.

4. Profitability is key. Without it the huge expensive building will be a large lifeless shell, generating nothing to pay for its upkeep, liable to default to City ownership for tax default. Three expert studies conducted 2010 through 2013 found its success depends on getting visitors to pay a substantial premium to stay downtown over the typical hotel rates of hotels just off the highways — $160 versus $90/night. It’s anyone’s guess if they will. Besides, the studies are all outdated now. Given the cost put on taxpayers we deserve to see the updated market analysis which Plamondon says is secret. Plus he needs to reveal his financial plan. How much ‘skin’ does he have in the game?

5. City staff say the hotel site plan has a heap of problems — cars and trucks access to the site, its ability to service the complex, traffic issues etc. Plamondon has not responded to City staff. The same problematic site plan is now presented (in Appendix A) for the Mayor and Board of Aldermen to approve. That’s sneaky! That site plan alone should be the subject of a Workshop with the City’s concerned engineering, traffic, and planning people, not just Griffin, the salesman and spin meister.

6. The public cost “has decreased from an estimated $31m to an estimated $17.5m,” they say. But is it true?  What are the estimates based on? The same kind of guesses that produced the $31m estimate? Regardless we have higher priorities in the City than building gold-plated public parking under an upscale hotel and the podium for that hotel? Stormwater management, affordable housing, roads, police, parks, sidewalks, utilities, deserve funding ahead of a hotel. Many citizens have suffered badly from the flood of May 15. Top priority should go to improving drainage so that is not repeated. Drains for the people, no podium for Plamondon.

7. The City never tried to get the best deal on the hotel. Their consultants JLL proposed a competition-friendly procedure and it was laid out 2013 Workshop open to the public. Come February 20 and the Request for Proposals was issued, quite different from the competition-friendly procedure. The choice of Plamondon was done on terms decided behind closed doors. It was crooked!

8. We have a new administration and a new board of aldermen. They shouldn’t be bound by the inept, crooked ways of the old. They should look at the whole project with new eyes.  2018/05/23

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