HB1347 reviving $5m of state grants for hotel passes General Assembly in last minute crush of bills

Hotel boondoggle boosters have won another round in the battle for state funding in the last minute crush of bills at the end of the General Assembly session  in Annapolis. They managed to keep grants of $1 million and $4 million in HB1347, the bill titled Prior Authorizations of State Debt — Alterations.

The bill has the two hotel boondoggle grants along with about two dozen other projects, most a renewal past grants which otherwise would be forfeited under normal use-it-or-lose-it conditions.

The grants for the City-sponsored downtown Frederick hotel are now available to be drawn on through June 1, 2026 — an extraordinary admission of the glacial progress of this project. And notwithstanding that the site contains historic buildings and archeology deemed “of unusual importance” by City preservation staff HB1347 provides that “this grant is not subject to review by the Maryland Historical Trust” — which normally acts as the state’s regulatory agency in such cases. 

The City is required by HB1347 to “provide evidence that a matching fund will be provided” to the State grants and it has to do that by June 1, 2021.

Board of Public Works is still a major obstacle

The City is still in an uphill battle to actually draw on the funds because the project has to face the scrutiny of the Board of Public Works (BPW) which comprises Governor Hogan, Treasurer Nancy Kopp and Comptroller Peter Franchot.  Governor Hogan has told opponents of the City project (including me on two occasions) that he appreciates it is problem-ridden and has stated flatly: “It won’t get any state funds.”

As self-described, the mission of the BPW “may be summed up as protecting and enhancing the State’s fiscal integrity by ensuring that significant State expenditures are necessary and appropriate, fiscally responsible, fair, and lawful.”  https://bpw.maryland.gov/Pages/about-bpw.aspx

The taxpayer-subsidized hotel in downtown Frederick fails the requirements of the BPW on every score:

“necessary”: rationale for taxpayer funding until 2018 was that higher costs downtown meant that no hotel would be built without it. In 2018 investors announced their intention to convert the Visitation Academy, just two blocks away, to a hotel WITHOUT any taxpayer subsidy.

“appropriate”: taxpayer support for construction of a hotel is not appropriate since the a hotel is a private business undertaking

“fiscally responsible”: it is not fiscally responsible to build the foundations of a hotel in the form of a City parking garage at a capital cost of $69,000 per parking space where the normal capital expense is about $15,000 per parking space

“fair”: it is not fair to taxpayers to use taxpayer money on behalf of a private business and it is not fair to its competitors who raise all their own capital

“lawful”: several laws were flouted in City sponsorship of this hotel: seven years of violations of the state Open Meetings Act by the City’s Downtown Hotel Advisory Committee (DHAC), the City’s misuse of City consultants to assist Plamondon in preparing his submission, the conduct of a flagrantly unfair procurement which violated the City’s purchasing code, the fake competition and biased scoring of the procurement.

So on all five counts the BPW should refuse to release the $5m and any other State money for the hotel finagled through the General Assembly in closed door meetings. 

But it is a blow to have the General Assembly support such an undeserving project! Its supporters sneaky tactics worked. They avoided any public discussion by dealing entirely behind closed doors — going around the County delegation, avoiding the committee appropriations process and relying on the rush of end-of-legislative session busyness to get it through.

Danielle Gaines of Maryland Matters provides a sense of the atmosphere in which HB1347 was passed:

“While hundreds of bills will zoom across the desks of the presiding officers of the House and Senate on Monday as the legislature wraps up its 90-day session, much of the serious work of tying up loose ends will be happening off the floors, in hurried huddles of six senators and six delegates – plus any number of observers – negotiating last-day conference committee reports. About a dozen conference committees have been formed in the last several days of session. Others are certainly likely on the final day… (Maryland Matters 2019.04.08)

https://www.marylandmatters.org/2019/04/08/five-conference-committees-to-watch-on-sine-die/

The grants can be read within HB1347 here on pages 8-9 and 13:

https://legiscan.com/MD/text/HB1347/2019

in pdf form:

https://legiscan.com/MD/text/HB1347/id/1984322/Maryland-2019-HB1347-Enrolled.pdf

2019.04.09

This entry was posted in Uncategorized. Bookmark the permalink.