Original Published March 8, 2016
Frederick News-Post

Peter H. Plamondon, Jr
Plamondon Hospitality Partners, LLC.

We have been following the City’s efforts to realize the multi-year vision for Frederick’s dynamic Downtown to build a ‘legacy project’, the Downtown Hotel and Conference Center. This is a unique and challenging opportunity, one that’s dear to my family’s heart and our company’s soul. Over 35 years ago, my dad opened his first restaurant in the county. We’ve been blessed, our locations have grown with the brand’s popularity, and we expanded our hospitality culture into hotels, which have thrived. This doesn’t happen without many loyal customers and dedicated full and part-time associates, now over 1,000 strong with 450 employees residing locally. 

It goes without saying that public/private partnerships are sometime difficult to get one’s arms around, so I am writing to share our perspective. We believe that it is unfortunate that some of the public comments have not been based in fact, especially regarding the need for public funding to support site development, public parking and the conference center portion of the partnership.

The need for a Conference Center has been discussed for many years, and we were delighted to compete and be chosen from the high quality proposals that the City received.

The RFP that was put forward by the City called for the project to incorporate approximately 200 guest rooms and 15,000 – 20,000 square feet of Conference Center meeting space in downtown Frederick.

  • It is clear that the Conference Center will be a capstone project for the Carroll Creek Park.
  • It is also established that communities across the Country have recognized the value of investing in a public conference center to stimulate economic activity, to support the local business community and to provide a wonderful facility for weddings, social events, and other local needs.
  • Fundamentally, we also need to acknowledge 2 important facts.
    • The conference center portion of the project is a public amenity. It will be available and will be continued as a pubic conference center as required by a legal agreement called for in the Memorandum of Understanding signed with the City in the Fall.
    • Importantly, in cities all across the United States these job creating and community serving facilities are being built with public/private partnerships. Our neighbor Montgomery County, for example, crafted a highly successful similar project.

This project has been intentionally scaled to maximize economic impact by encouraging out-of-town visitation fueled by groups, meetings and small to mid-sized conferences not attracted or accommodated in the market today. The size and scope of the Downtown Hotel and Conference Center has been researched and recommended by industry experts.

The location along the Carroll Creek Park is best suited for a successful project that will attract conferences that will make Frederick a unique destination for its appeal to maximize use and attendance by conferees.   Its location, scale and the fact that its design and materials must architecturally conform to its surroundings adds to the investment that would otherwise not be needed to build a similar project in a suburban location. It will also be a catalyst to the continued investment in the new East Street corridor.

Remember that the City insisted there cannot be any risk to the public sector. Rental and catering fees will be charged and the private investors are obligated to cover all expenses, maintenance and future capital repairs and replacement for the entire project. The underlying risk/financial structure is a significant element but too often downplayed. It is the polar opposite structure of many similar sized downtown projects, where the public sector often pays up to 50% of total project costs and must take 100% risk for operations and future needs.

Further, other projects like this invariably benefit from tax abatements and associated bonds that are not backed by private investment. That is not the case here. After a brief start-up period, our hotel will pay over $700,000 in real estate taxes. Additionally, independent studies have confirmed that MSA bonds will be paid back by the new revenues the State of MD will receive with no additional expense.

So why does the public sector fund these projects? The answer lies in the most significant benefit – the $26 million annually in economic impact that comes from job creation and visitor spending that accrues to our community as a whole. This project’s compelling underpinning – the historic, upmarket setting, a ‘destination’ lodging experience, the walkability factor, ability to host high profile events – fuels significant impact on an entire city center and makes this a completely different project than any suburban proposal.

That is the real return on investment and why our public-private partnership was created and makes so much sense.

The more suitable question is not whether the public sector should be involved, but whether the level of investment that has occurred is appropriate.

The private sector is funding over $40 million for the project. It is likely my brother and I will have to personally guarantee the performance of the financing. Quite frankly, these dollars could easily build multiple limited service hotels with far less risk and public fanfare. But we chose to enthusiastically respond to a community need. We’ve done so with vigor and are honored to be part of such a highly collaborative public-private partnership. We truly believe in this project and appreciate each and every stakeholder effort. This partnership will prevail on the facts, and the result will be positively transformative for county residents, local businesses and visitors to the region.  

Peter H. Plamondon, Jr
Plamondon Hospitality Partners, LLC.