Consultant Reports

pinnacleopxlogo200wFirst Pinnacle Report:

Published in January 2010 the Pinnacle Report was the first consultant report on Frederick’s proposed downtown hotel and conference center (DH&CC.)  It was commissioned by the City at a cost of $30,000. The Pinnacle report looked at the market for another hotel in Frederick and endorsed the project with enthusiasm, projecting great results. A weakness is that there is next to nothing on the conference center side of the project and the side demanding large public subsidies:

201001pinnacleopx

2.  Crossroads study:

The Crossroads report from July 2012 is the ‘expert report’ most often cited in crossroads2wjustification of the DH&CC project. Crossroads (Crossroads Consulting Services) is a one-person consultancy run by Susan Sieger out of Tampa FL who is a consultant on call at the Maryland Stadium Authority. The City was told by MSA that a critique and updating of the Pinnacle report was needed to gain state support for the project. Hospitality & Gaming Solutions was a sub doing survey work.

crossroadscvr260wCrossroads estimated room-nights in Year-4 or 2019 as the ‘stabilized year’ utilization of the hotel against’s Pinnacle’s Year-3 in 2016. It drastically reduced the business, family, and leisure usage forecast while hiking hugely the government estimate. There is almost no explanation for the revisions, or suggestion as to why they should be given more weight than the Pinnacle numbers. Overall room-nights in the ‘stabilized’ year are the same, but at a 21% lower average daily room rate ($140 versus $178  both in 2011$s.) Crossroads clearly thinks the DH&CC will need to do more price discounting on upscale room rates to keep at a year-round room occupancy average of 72%.

Projected food & beverage sales are dropped drastically — from $4.26m to $2.0m. Again without explanation beyond noting that the downtown already has a plethora of eating and drinking places. (Pinnacle was unaware of this?) Crossroads revenue forecast (p40) is $10.73m versus $16.17m, a 34% drop, but net operating income remains about the same $3.12 vs $3.04m because operating expenses are also scaled back heavily from $11.75m to $6.41m. The 45% scale-back of costs is spectacular… and unexplained.

Then there’s the “Economic and Fiscal Impact Analysis,’ Impactology for short, which provides propaganda numbers for project boosters. These are estimates of direct spending at the hotel and trickle down spending by those spending the earnings of the extra spending. There are ‘multipliers’ at work here. And the extra City, County and State revenues deriving from the project. Ms Sieger has discovered some big spenders who she thinks will come to Frederick for the DH&CC, spending directly and indirectly close to $500/day, generating $25.9m a year in total spending, 280 jobs (p50) and some $1.87m in extra taxes (p51.) Sieger like other impactologists leaves open the big question of whether she is estimating project ‘impacts’ or net local impacts, two very different numbers. Project impacts only translator into net local impacts to the extent the DH&CC patrons are all new and not just attracted away from competing establishments.

Little coverage is given of conference center operations, except Crossroads recommends 14,000 to 15,000sf  of meeting space with a single ballroom of 5ksf to 6ksf (p22.) Versus 24ksf and two ballrooms now planned.

see  201207crossroadsfrederickhotelstudy

3. Pinnacle#2, October 2013:

The third overall report was commissioned by Plamondon as part of their proposal to the City submitted in November 2013. Looking for hotels competitive with the DH&CC Pinnacle’s pin2cvr400h

second look found nine hotels that contain 1,068 rooms off the interstates and US15. Ten other hotels in the City compete more peripherally with the proposed DH&CC. The report provides a useful quick review of existing lodging. Pinnacle#2 accepted Crossroads revised market segmentation and projections.

Pinnacle#2 was initially suppressed by City officials on grounds it was ‘proprietary.’  That was almost certainly because of the report’s pessimism about conference center usage: “…we found the vast majority that the vast majority of state associations were rate sensitive and would not be willing to pay a high rate for an upscale downtown location.” (p13 in pdf)

Pinnacle’s talks with Frederick corporations found they wanted meeting space for 200 to 350 people at most versus the City plans for space for as many as 500 to 600 people. The consultant made projections based on the City-specified 15,000 square feet but concluded: “we believe 12,000 square feet is more reasonable and would adequately satisfy meeting demand.” (p13 of pdf)

Download 13 page pdf:

http://frederickhotelboondoggle.us/wp-content/uploads/2016/10/20131015Pinnacle2ForPHP.pdf

Desman Downtown Parking Study 2003:

desmanassocThe first study of parking in the downtown was based on a serious collection of data on parking spaces available and occupancy rates. Looking at times of peak demand it found public off-street parking spaces 1551 and 1198 occupied, an occupancy rate of 77%. On-street public parking spaces numbered  3355 and occupancy was about 54% at peak. There were 3912 private parking spaces, 2238 or 57% occupied. Only in the ‘core area’ of Market Church to 2nd Street was occupancy over 85%, the level considered as a ‘shortage.’ 140 page pdf: 2003desmanparkingstudy

Walker Parking Study 2015:

walkerparkingconsWalker Parking Consultants from the Philadelphia area did a ‘quick & nasty’ update on the Desman report with very little new hard data. They worked on the basis that City staff had the impression that parking garages were about 85% occupied. Then the report was a projection forward of possible new development downtown and likely extra parking needs generated by those developments. It focused almost exclusively on public (City) parking, writing off private parking as negligible –  a statement at odds with the Desman numbers or a review via Google maps in satellite mode.

20150610walkerpkgstyformb