Plamondon walks away from Downtown Hotel, says City’s inability to gain promised funding makes project ’non-viable’

Pete Plamondon Jr announced today his company is exercising its option to withdraw from its partnership with the City to build a downtown hotel and conference center in Frederick. He said that City officials had “gone the extra mile” in their efforts to gain the necessary public funding “but at the end of the day they have been unsuccessful in assembling the necessary public funds.”

Plamondon said he had submitted a Notice of Termination in accordance with the Amended MOU of June 21, 2018. This anticipated the possibility of the joint project being terminated by either party: “Prior to Financial Closing, either Party may terminate this MOU for any reason or no reason…” see MOUv2 at page 13, IX. (e) Termination. There is a 30 days notice period so the MOU is officially voided April 30.

Mayor Michael O’Connor said the Plamondon company’s withdrawal from the project was “disappointing but understandable.” At the end of the legislative session the City’s quest for $10.5 million of state funds had come to nothing, and the County delegation was split. In an attempt to avoid contentious argument among the delegation Delegation Chair Carol Krimm decided not to put hotel funding on the delegation agenda and privately approached Democratic appropriators asking them for $1.5 million. Again to no avail. The City also faces opposition to state funding from the Hogan Administration, which has the final say at the Board of Public Works which comprises the Governor, the Treasurer and the state Comptroller.

Mayor O’Connor was quoted in the Frederick News-Post previously: “This is the last session we’re going to go through this process. We will find out what we are going to get in the budget this year. We don’t intend to go after it after this year.”

The Downtown Hotel project was associated most with Mayor Randy McClement who launched it soon after he was first elected in 2009 and championed it during his two four year terms of office 2009 to 2017. The present Mayor and Board of Aldermen who came into office 15 months ago have continued to vote for the project and to give it lip service. But they have been noticeably cooler about the project than previous local elected officials.

Mayor O’Connor terminated the City-appointed chair of the Downtown Hotel Advisory Committee (DHAC) March 3, 2018, and said that he was appointing no replacement. And three weeks later (FNP 2018.03.24) he spoke about the lax management of the project saying: “what’s often been frustrating for me as I watched this from the perspective of the Board of Aldermen is, I’m not really sure someone is actually the quarterback of this project. Is it being driven by the mayor’s office, is it being driven by the major employers’ group with the Chamber of Commerce, is it being driven by tourism, is it being driven by Plamondon Hospitality Partners?…”

Pete Plamondon told reporters he appreciated the hard work and commitment of City officials and of the Downtown Hotel Advisory Committee which looked after the City’s interests. The DHAC had shown “great flexibility” in their handling of the procurement and a “willingness to work closely with the Plamondon team from the very beginning.”

“Our proposal was recognized early in the process as best-value for the City, well before the RFP was issued. It was a very cooperative relationship throughout the ten years we worked this project. It was our suggestion to the Hotel Team that they expedite the procurement by limiting bidders to those who already had a site. That greatly expedited the procurement and ensured two good competitors — Ed Wormald and ourselves.

“I felt a bad for Ed,” Plamondon said. “He really wasn’t in the race.”

The DHAC already had their proposal and the consultants Jones Lang LaSalle had helped them hone their submission more precisely to the City’s requirements.

“But Ed deserves everyone’s gratitude. The City and the County have very little borrowing capacity. As our lobbyist in Annapolis said: It was vital to present the appearance of competition in order for us to have the chance to crack open the rich state treasury.”

Mayor O’Connor said: “We almost did it. Several times the planets seems to be aligned. But we got only dribs and drabs, half a million here, three-quarters there, $5 million promised for a future year…..It never quite came together in a way that would allow us to do a financial close and award contracts, and build.”

Both the Mayor and Plamondon said the project suffered from bad luck. They cited the fact that Mark Gaver, the City’s first chairman of the Hotel advisory team turned out to be engaged in a $50 million fraud and went off to federal prison for 17 years. It was bad luck too that plans to get the Maryland Stadium Authority to sponsor the project never materialized. Maryland Economic Development Corp also declined to get involved int he Frederik project.

Both are rather Baltimore-focussed organizations, O’Connor said.

As for the Visitation Academy hotel and condos being built without public funds, department of Economic Development Richard Griffin said the City could claim some credit for this. The buzz generated by the City/Plamondon project attracted investors and focussed attention on the potential of hotels downtown. Visitation was a “great knock-on project that wouldn’t have occurred without the City’s work with Plamondon,” he claimed, adding: “Good things often happen in unexpected ways.”


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