Plamondon sought help of hotel trade group to lean on Governor Hogan for $s for his hotel

Pete Plamondon sought the assistance last summer of the Maryland Hotel Lodging Association, the Annapolis-based hotel trade group to influence Governor Hogan to release state funds for his proposed hotel in downtown Frederick. We got a copy of an email and have responded to its misleading account. The text follows: 

Ms Amy Rohrer, President/CEO, Maryland Hotel Lodging Association, Annapolis MD 21401

Ms Rohrer

Amy Rohrer

I write as an old journalist following the ten year-old saga of the Frederick City Government and Mr Pete Plamondon seeking tens of millions of dollars from taxpayers on behalf of a hotel in the historic district of downtown Frederick, a few blocks from where I live. As part of my continuing investigation into this unfortunate hotel project I obtained a copy of an email addressed to you dated July 18, 2019 from Pete Plamondon with the Subject: Re Hogan. 

This is a misleading account as indicated by my interposed comments below.

From: Pete Plamondon Jr. <Pete@plamondon-cos.com

Sent: Thursday, July 18, 2019 2:30 PM

To: Amy Rohrer <amy@mdlodging.org>

Cc: Shelly Weir <sweir@ahla.com>; Abbey Kang <akang@ahla.com>; Troy Flanagan <tflanagan@ahla.com>; Cutler, Travis <Travis.Cutler@marriott.com>; Michael Henningsen <michaelh@plamondon-cos.com>

Subject: RE: Larry Hogan

PLAMONDON:  We have been involved in the development of a full service hotel/conference center project with the city of Frederick after winning a city led RFP process in 2014. 

SAMUEL: The RFP process run by a shadowy group of insiders was far from a fair and open procurement, more an inside ‘fix.’ The corrupt nature of this project is fully documented in my Submission to the Board of Public Works and Complaint to the Office of Legislative Audits. See link:

http://frederickhotelboondoggle.us/2019/03/submission-made-to-state-office-of-legislative-audits-and-board-of-public-works/

PLAMONDON: The city’s requirements was to include a 200+/- room four diamond full service hotel, with conference center space of approximately 15-20,000 square feet. Our site takes advantage of straddling the Carroll Creek Linear Park on what is now mostly vacant property.  

SAMUEL: The Plamondon site does not “straddle” the park. It is on the north side of the park only. The south side of the park is the lot owned by Ed Wormald who proposed it for a hotel but has been apparently stymied by the threat of a ‘competitor’ heavily underwritten with taxpayer subsidies. 

“(M)ostly vacant property”? The Plamondon site contains two substantial buildings deemed by historic experts to be of “unusual historic importance” — the Trolley Building and the Birely Tannery, the latter being the last remaining example of a 19th century leather tannery in the state, which Plamondon wants to flatten. Wormald’s site on the southside of the park by contrast is completely vacant. The Plamondon side with little free street frontage is awkward to access and unsuitable for a modern hotel precisely because of the need to preserve the Trolley Building.

PLAMONDON: We have worked jointly with the city and county officials to craft a potential 4 way PPP. The city and county have voted on their individual means of funding, and the project was seeking $5mm from the state’s capital fund.  These public funds would be 100% utilized towards land acquisition, site work and underground parking. 

SAMUEL: City and County officials are not experts in the lodging market. They have nothing to bring to a hotel ‘partnership’ except money extracted from unfortunate taxpayers. No other hotelier in Frederick County has had taxpayers buy them land, do their site work and build them underground car parking that is estimated to bring the City a mere 1.4 percent return on investment. The City’s financial consultant MuniCap recently provided estimates that Plamondon’s ‘full-service’ hotel will cost him only $158,000 per room versus the average nationwide cost for such hotels of $318,000/room (HVS construction cost number for 2017/18.) The difference is approximately the proposed taxpayer subsidy to Plamondon’s capital costs. Plus there’s the City carrying huge losses servicing debt on a parking garage for Plamondon’s staff and guests. 

PLAMONDON: Plamondon Hospitality Partners would be 100% responsible for the costs and operation of the hotel and conference center that would sit atop the garage. The garage would be owned by the city of Frederick.  Over the past three years, we have been to Annapolis to lobby for upwards of $12mm to build two levels of underground parking.  Two years ago, the general assembly was able to get the $5mm that is currently in the capital budget waiting to be scheduled by the Board of Public Works for a vote.  This would allow for only one level of underground parking. We have been stymied by our own delegation that is split 4-4 on its support. 

SAMUEL: Four Frederick County delegates support the Plamondon hotel boondoggle while another four see it as unfair, wasteful and a financial folly that taxpayers should avoid.  Public opinion in Frederick is overwhelmingly opposed to City/County financial support for this project (over 70 percent opposed according to one poll.)

Pete Plamondon

PLAMONDON: Another hotel owner in Frederick, Randy Cohen, who owns the 40 year old Clarion Inn along I-270 on the outskirts of downtown, hired Bruce Bereano as his lobbyist to fight our efforts towards the state funding.  He has been effective in coercing Sen. Michael Hough(R) the co-leader of the Frederick delegation to Annapolis, and Governor Hogan to block our efforts as he is upset that his “project” to raze his building and build a new hotel and conference center is not “eligible” for the public funding that our downtown Frederick project is being afforded.  

SAMUEL: People on both sides of this contentious and protracted project have hired lobbyists. Cohen’s lobbyist cannot “coerce” anyone as alleged by Plamondon. Also Senator Hough hardly needs to be “coerced” on this issue. He must be aware of the unpopularity of spending public money on Plamondon’s hotel. So it is to his political benefit to oppose it. He has spoken several times on the underhand manner in which it has been promoted. 

Gov Larry Hogan

PLAMONDON: Since Governor Hogan is not in a hurry to satisfy Democrats here or anywhere, and the Republicans are against us, this project, as designed,  is stalled. In order to develop the “best” project,  building as much on-site parking as possible is simply the right thing to do.

SAMUEL: Certainly “building as much on-site parking as possible” is the right thing to do for Plamondon when, like Plamondon, you expect to have taxpayers footing the bills at $70,000 per parking space. However taxpayers may think they have higher priorities for the use of their taxes than funding Plamondon’s hotel parking, its foundations, its delivery ramps, utilities, landscaping, its many consultants etc.

PLAMONDON: In the attachment, is a synopsis of the project.  Please note, that the “public side” of the chart is now out of date as some grant money has expired and we are now focused on a lesser amount for one level of parking rather than two. I have had at least three one on one conversations with the governor on this project, and while he agreed as to the merits of the project, he has repeatedly told me that he’d like to have at least one Republican vote in favor to make it a 5-3 vote. 

SAMUEL: I’ve also had one on one conversations with Gov Hogan, and he has told me he doesn’t think the hotel project deserves state money, and he has assured me “They won’t get state funds.”

PLAMONDON: Simply put, the three other republicans do not have the courage to vote against Sen. Hough, as they ran on one ticket last November and he is the rainmaker for campaign funding for the Republican Party in Frederick.

Senator Michael Hough

SAMUEL: Hough’s colleagues share his opposition to public funding and the shady manner in which Plamondon has tried to advance his personal interests at the expense of competitors and taxpayers. They gain voter support from standing against taxpayer money for Plamondon.

PLAMONDON: This “logic” simply blows me away as to how we are being held hostage by another hotel developer who is trying to kill our downtown project, that estimates an incremental $25mm in annual economic benefit to the County when it opens. 

SAMUEL: Plamondon’s project is being held hostage by its inherent shortcomings (awkward site, blighted neighbors, flood-plain location, possible hazardous waste, little street frontage, dependence on government funding etc) and by the ineptitude with which it has been managed for a full ten years now. No serious analysis suggests net economic benefits to Frederick County from this project. To the contrary, this speculative, unpopular project threatens to impose net costs on the county by way of an ill-conceived, over-large building on a poor site. Plus it assures wasted taxpayer money and unnecessary city and county debt. 

The $25 million of benefits cited by Plamondon is a PR fabrication. It is an estimate of the spending (and so-called ‘economic impacts’)  of Plamondon’s guests based on $179/night room fees, 72% occupancy and 230 rooms plus spillover spending of $234/room-night — all the patrons and their spending assumed to be entirely new visitors who would not come to Frederick but for the existence of Plamondon’s downtown hotel. Serious consultants have stressed that most of the possible Plamondon patrons will be people who would come to Frederick anyway and that Frederick is unlikely to attract many new group events. Therefore guests attracted to the Plamondon downtown hotel will be mostly at the expense of other hotels in the area. Spending impacts would simply be moved from unsubsidized hotels nearby to Plamondon’s subsidized hotel.

PLAMONDON: I’ve attempted to hit the “highlights” and I can provide additional information over the phone which would be a little easier than in an email.  Please let me know if you’d like any more “color” on what I’ve written.  By the way, this project has been identified by the Frederick County Chamber of Commerce for the last two years as its #1 economic development project. The CEO of the Chamber, Rick Weldon, would be able to provide more detail as it pertains to that point. As there is not full service hotel in the Frederick market, a downtown project would be the biggest game changer (other people’s words, not mine), since the PPP of the award-winning downtown Carroll Creek Linear Park and flood control project. 

SAMUEL: Both the City and the Country say that Frederick’s #1 economic development project is more lanes on I-270 and US15 in Frederick. Stop-&-go traffic and unreliable travel times between the DC metro area and Frederick are the greatest deterrent to visitors, not any lack of hotel capacity or meeting space.  Special taxpayer support is simply not needed for hotels. Investors will fund well-conceived lodging projects on their own, and do it efficiently and expeditiously. Just two blocks from Plamondon’s site the old Visitation Academy school and nuns’ housing is being developed into a boutique hotel by investors completely out of their own resources. There is no need for the divisive, prolonged panhandling in which Plamondon has engaged.

PLAMONDON: Respectfully,

Pete 

Peter H. Plamondon, Jr.

Plamondon Companies

(end of Plamondon email “Re Hogan”)

Ms Rohrer: It is time Mr Plamondon showed some respect for the citizens and taxpayers of Frederick and for the industry in which he works. Surely the hotel and lodging business overall is best served by an evenhanded government which eschews special 8-figure deals such as Mr Plamondon has been conniving with politicians to obtain for ten years now. 

If you strive to represent the whole lodging business in the state you must want government, state and local, that applies a single set of rules so that there is a level playing field for competition among your members. Mr Plamondon’s effort to gain special advantages to the tune of $20+/- million for himself alone to the disadvantage of other hotels and lodging providers and of taxpayers is profoundly wrong. It does not deserve the support he pleads for from your organization. It deserves your opposition.

I would like to know your response to this and will be happy to publish it in full.

Yours,

Peter Samuel

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