Wordplay used to give cover to the same old subsidy scheme

State Delegate Karen Lewis Young is quoted in the Frederick News-Post (2019-01-19) as saying that the proposed new scheme at the downtown hotel should be called a Public Infrastructure Project. Del Lewis Young told the newspaper she thinks the change of funding “warrants a new conversation.”

Everything about this City hotel happens in very slow motion! 

It was 32 months ago back on May 18, 2017 at the Delaplaine Center when Plamondon released some revised plans for his hotel and conference center, that Mayor Randy McClement made a big play of a new scheme for dividing responsibility for capital costs. Instead of city, county and state taxpayers being up for some 30 percent of the costs of the whole project taxpayer money would be focussed on land, basement car parking, road modifications, and landscaping. The publicly funded basement car park would form a structural platform or ‘podium’ on which developer Plamondon would build his hotel and conference center, now to be fully financed by him. 

It has never been clear how this is a better deal for taxpayers. Building a basement parking garage in this difficult creekside ground, below the level of the creek canal, is a very risky and costly way of providing parking spaces. The City would never propose this purely for parking cars. It would build an above-ground parking deck because that is the more economical way of providing parking. Per parking space costs underground nationally run an average $41,000 versus $25,000 above ground like the City’s five existing decked garages. (NOTE: The cost of the sub-Plamondon parking is closer to $70,000/car-space!)

If the ‘infrastructure’ being funded by the City for the Plamondon hotel was going to pay its way for the City, if the basement parking garage was a good investment returning sufficient revenue to support the capital cost then of course no state dollars would be needed. Good investments can be funded in the capital markets. They don’t have to go begging to Annapolis.

The new scheme subsidizes the project by using public dollars to buy the land and public dollars to do all the difficult underground foundation work rather than subsidizing 30 percent of the whole project. It’s still a heavily taxpayer subsidized project.

In order to be sure the costs were properly allocated it should be divided into two separately bid building contracts — the publicly built  portion down in the creekbed bid out by the City, with Plamondon to get his own bids for his construction on top of the City-built podium. But the proposal is still to build the project with a single design-build contract above and below the podium. That ensures it will never be clear how much the garage and podium is costing versus the hotel and conference center on top of it.  With one umbrella contract the builder doesn’t care how costs are allocated between the two parties. 

Cost sharing between taxpayers and the developer will be an arbitrary political decision.

What Del Lewis Young wants to call ‘public infrastructure’ is what the hotel and conference center needs. It is not money that would be spent on such work if there wasn’t a deal to put the City-sponsored hotel on top.  Plamondon is being saved tens of millions of dollars that he’d have to find without the City sponsorship. 

He is given a special favor. Engineered platforms above the level of the canal normally get built by developers. So the downtown hotel remains a heavily subsidized project, and it remains unfair to competitors who get no such taxpayer largesse. 

The change of May 18, 2017 was pure wordplay, PR. Unchanged is the fact that taxpayers are being asked to heavily subsidize the project.

To paraphrase Greater Greater Washington on a proposed stadium subsidy: A hotel subsidy by another name is still a hotel subsidy.

Also unchanged is that the selection of Plamondon was a dirty insider deal. Unchanged is the fact that there was a supposed ’competed procurement’ conducted purely for PR/political appearances that was fakery and fraud.

2019-01-22 

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