Talking Points/Writing Points

Key decision makers are:

Governor Larry Hogan, Comptroller Peter Franchot, Treasurer Nancy Kopp — the three members of Board of Public Works

Maggie McIntosh chair, Tawanna Gaines vice-chair, House Appropriations Committee

Thomas Middleton chair, John C  Astle vice-chair, Senate Finance Committee

Kenneth C Holt, secretary Department Housing & Community Development

Thomas Kelso, chairman Maryland Stadium Authority

Robert Brennan, executive director Maryland Economic Development Corporation (MEDCO)

local elected officials (details to come)

Grants being sought by boosters at expense of taxpayers

The City of Frederick is currently seeking $17 million more from the state for its $84 million downtown hotel and conference center project (Hotel Project):

— two year extension sought on a state $250,000 grant dated May 2014

— after defeat of HB1474/SB1038 in the regular appropriations process SB191/HB151 in April provided $1 million state grant provisional on a MOU MSA-Frederick County-City of Frederick-developer and approve of the General Assembly budget committees

— in July 2016 the City DED applied for another $1 million from the Department of Housing and Urban Development ‘strategic demolition fund’

— SB191/HB151 provides ‘pre-authorization’ for $15 million for construction – $7.5 million in FY18 and the other $7.5m in FY19

The MOU does not meet the requirements of SB191

1. SB191 specified a 4-party MOU with Maryland Stadium Authority (MSA) representing being the State partner. Instead the City produced a 5-party MOU in which the MSA has no significant role and MEDCO is substituted for most of the roles envisaged for the MSA. A glut in conference/convention center space makes any new projects problematic but the MSA did have a modest success in Montgomery County, whereas MEDCO has a two of two perfect failure rate (Rocky Gap and Chesapeake.)

2. SB191 required the financing to maximize local contributions and minimize any state contribution. The 5-party MOU continues to depend on state contributions for the majority of public sector funding ($18.1m of $30.35m or 60%)  since the City has pledged no use of City tax revenues.

3. SB191 required minimizing public components of the project including land acquisition. The 5-party MOU continues effective gifting of the land to the developer even though the RFP under which the developer was selected (RFP14J of February 2014) explicitly ruled out City provision of land, and the developer had in place a purchase option he was prepared to exercise.

An already slow project now going seven (7) years is going even slower and doesn’t need more public money

1. Grants made in the  past have expired without being used, and need to be extended.

2.  A very difficult site was selected that is too small for the size of the hotel complex specified by the City so negotiations are under way to buy more land, rather than trim back the size or cost.

3. With more land plans, only in the first stages despite 7 years, will need to be restarted

4. Parking for the hotel complex is presently 110 spaces on-site versus 350 recommended by consultant

5. At least one historic building has to be demolished at the chosen site setting up a long, nasty fight with historic preservationists and regulators

6. No traffic studies have been done for the project even though expensive changes to street arrangements are proposed

Historic preservation a major self-imposed obstacle

  1. The site for the proposed hotel complex was chosen despite the presence on it of substantial brick tannery building (the Birely Tannery) where tanning goes back to early in the 19th century.
  2. The site found by the Maryland Historical Trust (MHT) to be eligible for the National Register of Historic Places as far back as 1983 and the city has classified it as a ‘contributing’ element of the historic district in which it is located.
  3. Since the building is well-built it is highly unlikely its demolition will be allowed by both state and city agencies. Yet the conference center portion of the planned hotel complex is planned squarely athwart the footprint of the Tannery building and requires its complete demolition.
  4. The other problem is that new buildings in the historic district are required to be ‘compatible’ in scale and mass with the surrounding streetscape, which is mostly two-story and narrow frontage. The proposed hotel complex of 200 rooms with ancillary ‘full service’ or 4-star quality is 6 stories high and comparable in square  footage to an average Walmart big-box store — 150,000 square feet.
  5. The process of gaining historic preservation approvals for demolition of the Birely Tannery has just begun — seven years after the project was launched. The 5-party MOU ’Schedule’ puts completion of permitting by the MHT at December 1, 2016 completely unrealistic since as of early November no full application has been filed.

City permitting involves difficult negotiations over not only historic preservation, also planning commission and engineering issues

  1. City permitting is scheduled for completion by mid-year 2017 even though no applications are submitted as of Nov 7. Project applications in the City’s historic district cannot begin until the City’s Historic Preservation Commission has signed off on an acceptable plan. It is most likely the controversial Hotel project will go through many workshops, and public hearings and private negotiations in efforts to get compromises.
  2. Each round will likely require new drawings, new calculations, new presentations. The City Planning Commission will look at traffic impacts especially the consequences of a new two-way traffic pattern in presently westbound-only Patrick Street, parking provision (still not firmed up) stormwater, sewage and water supply upgrades, new street sections with landscaping.
  3. 18 to 24 months is more realistic than the seven months specified in the 5-party MOU.

Unsuitability of the design

The design is for a 200 room ‘upscale’ 4-star hotel charging $160 to $200/night with 24,000 square feet of meeting space. This format was arrived at by a Mayor’s advisory committee comprised of local worthies completely lacking in expertise in the hotel business but recommending a set of facilities nice-to-have from the viewpoint of people told the project will get public support, but somehow magically  won’t cost them anything.

1. Too large for the chosen site — reflected in ‘need’ to seek land from adjacent property, ‘need’ to demolish the Birely tannery building, difficulty accomodating sufficient parking.

2. Too large in scale for the historic district (6 stories versus 2 stories, Walmart store-sized bulk

3. ‘Full service’ including comprehensive in-house facilities (multiple restaurants, bars, spa, business center, meeting rooms etc) is absurd in the downtown context where all these services are already available within walking distance.

4. An extra 200 ’upscale’ rooms in a market numbering about 1,200 rooms is a huge addition to supply and disruptive of existing hotel businesses lacking City, County and State financing

5-party MOU farce

The month of October 2016 saw multiple hurriedly scheduled workshops and public hearings to get County and City government endorsement of a 5-party agreement or MOU.

1. This involved pages of legalese and many hours of work by elected officials, staffs and interested members of the public.

2. The MOU was presented as an agreement that had been crafted collaboratively between the parties — the developer, the City, the County and the two state agencies MSA and MEDCO. We were led to believe that the top executives and lawyers for all the parties had endorsed the MOU, and the clear message was: it’s endorsement by the governing board was hardly more than a formality.

3. We were all misled. The state agencies say the MOU was largely a City draft on which they had made some comments, largely to the effect they were reluctant to assume commitments.

4. There was never any likelihood either state agency’s board would approve the City draft as presented.

5. The MOU exercise produced nothing but cynicism about the City of Frederick’s ability to manage the hotel project (and other projects).