Lawmakers made the right move by including funds for downtown hotel project in capital budget

Original Published April 5, 2017
Frederick News-Post Editorial Board

The passage of the capital budget by state lawmakers last week was a win for the city of Frederick and Frederick County. The $1 billion budget, approved by both the Senate and the House of Delegates by wide margins, included funding for the long-sought downtown Frederick hotel and conference center, a project that was put on life support late last year after key state funding partners pulled out.

The General Assembly approved amendments that secure funding in three successive grants — a $5 million grant in 2018 and two pre-authorized grants in 2019 and 2020, the first for $7.5 million and the second for $3.5 million. All members of the Frederick delegation voted to approve the budget, even though delegation Republicans expressed misgivings about the appropriation for the downtown project. Both Sen. Michael Hough and Delegate Kathy Afzali continue to express their largely ideologically driven opposition to appropriating state funding for the hotel project (Afzali referred to funding for the project in the budget as a “monstrosity”).

We have batted down opponents’ arguments against the project repeatedly. We find those arguments tired, hypocritical and nonsensical. Mostly a melange of hooey about “picking economic winners and losers,” “corporate welfare,” yadda yadda yadda. Governments for a very long time have entered into these kind of public-private partnerships to encourage economic development — whether it was the state of Maryland’s role in building the C&O Canal two centuries ago, or more recently, public participation in building Ravens and Orioles stadiums in downtown Baltimore. These kinds of investments can revive regions and cities dramatically.

The presence of a hotel and conference center in downtown Frederick, accessible by foot and emptying out onto the popular Carroll Creek veranda would be a boon to the city, to the county and to Maryland, drawing visitors, conferences and tourists from across the country and around the world. It would provide a significant bump to the downtown business district, boosting business and tax revenue and helping to attract even more capital to encourage the redevelopment of stubbornly underutilized parcels in the historic district.

The bulk of the $82.5 project — to be built at 200 and 212 E. Patrick St., at the site of the old Frederick News-Post building right on Carroll Creek — will be funded through private money by the developer, Plamondon Hospitality Partners, which would invest about $53 million to build the hotel and associated retail space. The public portion, totaling about $31 million, would be a hodgepodge of state, county and local funding, collected through the state grants, tax-increment financing, city payments and parking funds, and would pay for public infrastructure, the conference center, stormwater management improvements as well as a parking garage and other site upgrades. These features are all necessary parts of the project and fully consistent with appropriations for public projects throughout Maryland as we’ve argued before.

Will this project benefit members of the Randall family, some of whom own the parent company of this newspaper, and some of whom separately own the old News-Post building downtown that will be part of this project? Yes, it will, as we have acknowledged repeatedly. But that’s no reason not to do it. The Randalls one day will sell that parcel; if it’s not part of this project, it will be part of another. Will people oppose every project on that site just because the Randalls own it? That’s silly. That’s like allowing a group of people to oppose you selling your house to whom you want, or your farm to whom you want. That’s generally not how we do things in the American system of capitalism.

All the same, the appropriation is subject to a line-item veto by Gov. Larry Hogan, also a Republican. Hogan has not signaled which way he will go on the appropriation except to note that he will consider each line item carefully. Hogan is expected to either sign the budget or veto it by Wednesday. Nevertheless, our thanks to all the members of the county delegation, namely Sen. Ron Young and delegates Karen Lewis Young and Carol Krimm, who represent the city of Frederick and who recognized the importance of this project to both the city and the county. This is a project that promises to help transform downtown Frederick.

Downtown hotel plan to preserve history of Birely Tannery site

Original Published February 28, 2017
Frederick News-Post

By Mallory Panuska mpanuska@newspost.com 

                                                                                                                                                                                                          Staff photo by Bill Green             The Maryland Historic Trust has confirmed the historic significance of the Birely Tannery site on East Patrick Street. 

                                                                                                                                                                                                         Staff photo by Bill Green

           The Maryland Historic Trust has confirmed the historic significance of the Birely Tannery site on East Patrick Street. 

The historical uniqueness of Frederick’s Birely Tannery site is slated for incorporation into the latest proposed downtown hotel and conference center plans following a recent designation from the Maryland Historical Trust.

The trust announced in a Feb. 7 letter that the tannery building and archaeological site at East Patrick and Carroll streets belong on the National Register of Historic Places. The determination is based on results of an independent investigation into its historic significance.

Now, city officials, hotel developer Plamondon Hospitality Partners, and the Department of Housing and Community Development are collaborating with the trust to determine how to preserve the site as project plans progress.

Plans for the 207-room Marriott and 24,000-square-foot conference center are based on a combination of public and private dollars. Plamondon Hospitality Partners is expected to pay $53 million for the hotel portion of the project.

The Frederick Board of Aldermen, Frederick County Council, state budget funding, the Department of Housing and Community Development and other entities were initially set to provide the remaining $31 million for construction of the conference center. But some funding is up in the air, including the state’s portion.

The trust’s announcement about historic significance seems to disagree with a separate investigation that Baltimore-based consulting firm Kann Partners performed over a roughly seven-month period in 2016.

“The Trust does not concur with the preparer’s recommendation that the Birely Tannery building is not eligible for listing in the National Register,” the trust’s letter said.

Plamondon Hospitality Partners retained Kann Partners to research and facilitate applications related to historic preservation of the site.

The final report concluded the tannery building was ineligible for the National Register of Historic Places based on evaluation of its significance to local tanning operations. The consultants researched elements such as the historical significance of the site connected to events, people, design and information potential.

That initial determination spurred speculation that developers might demolish the tannery building for the hotel project. Patti Mullins, city public information coordinator, said the MHT’s designation does not preclude the tannery building from demolition, it simply ensures the history of the site will be preserved as the project moves forward.

In a Feb. 10 city news release about the designation, Donald Kann, president of Kann Partners, was quoted as saying that the trust “confirmed his assessment of the site’s important archeological context.” The release also said Kann anticipates working collaboratively with the state organization and other partners as the project moves forward.

Kann did not return three calls for comment.

Richard Griffin, the city’s director of economic development, said the MHT was involved in the historic designation of the tannery building because the hotel project is slated to receive state funds.

“Whenever the state is involved in a project, it goes through the Maryland Historic Trust to evaluate whether something is eligible to be on the national register or not,” he explained.

The city’s Historic Preservation Commission will also make its own determination about whether the tannery building belongs on the National Register. The investigation is independent from the trust’s investigation and has not begun, Griffin said.
A rich history

According to the trust’s letter, Frederick was a hub for the tanning industry in the early 20th century, with as many as eight tanneries in operation. The Birely Tannery was established in 1830 and operated until 1952. The current building was constructed in 1909.

According to the trust’s letter, after fully examining the building, researchers determined the building “retains sufficient integrity to reflect its association with the industrial history of Frederick.”

The letter goes on to say the site has “good subsurface integrity with intact deposits beneath fill, excellent preservation of material remains, and has demonstrated potential to yield important information regarding the development of the tanning industry through the time period.”

The letter says the site has 13 tannery-related features, including four tanning pits, one waste pit, stone paving and the remains of several structural foundations.

“The site still contains buried surfaces and features that survive beneath the various fill and disturbance actions that have occurred on the site during the mid to late 20th [century],” the letter said. “These newly discovered resources represent the site’s continuation into the project area, as expected, and contain an important record of the history, development and operations of the Birely Tannery.”
Next steps

Griffin said city officials, the developer, and DHCD will now collaborate with members of the trust and develop a mitigation plan for the project.

“The plan will determine how to mitigate impact, or to make certain the history of the site is not lost as the project is developed,” Griffin said. “It will make sure it is developed in a harmonious way with the history of the site.”

The next step is development of a site plan, which Griffin said is awaiting funding approval from the state.

“There are concepts out there about what this project is, but the actual design of this project is not completed because it’s a function of the budget,” he said.

The proposed hotel and conference center property at 200 and 212 E. Patrick St. is owned by a business entity formed by members of the Randall family. The Randall family also owns the parent company of The Frederick News-Post. The tannery building is at the back of the property at 212 E. Patrick St.

 

Digging for history

Original Published September 13, 2016

Frederick News-Post

Downtown Frederick Hotel: Preservation Update Meeting Scheduled

Press Release: August 12, 2016

Plamondon Hospitality Partners has scheduled a Downtown Frederick Hotel: Preservation Update public meeting for Wednesday, August 17 at 6:30PM at the Delaplaine Visual Arts Education Center located at 40 S. Carroll Street. At the meeting, KANN Partners, the Preservation Architect on the Downtown Frederick Hotel Project Team, in addition to Dr. Mechelle Kearns, the project team’s archeologist, will provide a summary of the preservation related information learned about the project site to date. The public meeting also will include an opportunity for attendees to ask preservation related questions about the project.

Preservation findings will be provided to the City of Frederick and the State of Maryland as part of the project development process. The information gained will be used in evaluation and planning to develop the most effective approach to preservation, mitigation and interpretation of the historic property.

"The history of the site is important," said Pete Plamondon of Plamondon Hospitality Partners, developer of the Downtown Frederick Hotel Project, "and we are looking forward to sharing this information with the Frederick community." Plamondon added, "Our company is committed to a healthy preservation ethic, coupled with timely and open communications, in bringing this exciting project to downtown."

For more information on the Downtown Frederick Hotel Project, please visit www.downtownhotelatcarrollcreek.com.

Contact: Peter H. Plamondon Jr.
Plamondon Hospitality Partners
(301) 695-5051
petejr@plamondon-cos.com
www.downtownhotelatcarrollcreek.com

Downtown Frederick Hotel Project Archaeology to Begin

Press Release: August 10, 2016

As the various components of the Downtown Frederick Hotel and Conference Center project begin to take shape, an important element is about to occur. Over the next several weeks, archaeological testing will take place at the site. This work relates to both the Birely Tannery as well as the Frederick Railway Terminal Building, better known as the Trolley Building.

The Maryland Historical Trust (MHT), a state agency, requested preservation and archaeology information for the Tannery, in particular, as its history is not well documented. This work is a first step toward many preservation activities and strategies required for the Downtown Hotel Project. To fulfill the state’s request as well as City requirements, application was made to MHT, the City of Frederick and the Catoctin & Frederick Soil Conservation Districts to allow the archaeology work to occur. The City’s archaeology advisor reviewed the plans, permits have been secured and schedules are being coordinated. Archaeology work will commence on August 17th.

"The public should be prepared to see activity on the site," said Pete Plamondon of Plamondon Hospitality Partners, developer of the Downtown Frederick Hotel Project, "and we're excited about this next step. A dig of this magnitude has not been completed downtown since the early 1990s."

The archaeology will be performed by Kerns CRM Consultants, who has completed projects in Frederick and throughout the state. Dr. Mechelle Kerns, owner and adjunct history professor at the US Naval Academy, will oversee the removal of surface material as well as perform archaeological testing, research and reporting. The excavations and reporting will employ procedures consistent with City and State preservation guidelines. It is anticipated that their fieldwork will take a couple of weeks to complete, weather permitting.

Once the fieldwork is complete, results of the testing will be presented in a report to Kann Partners (the Preservation Architect on the project team) for consultation with the State and City on preservation matters. These findings, along with the historic research and documentation of the buildings within the project area, will be used for evaluation and planning to develop the most effective approach for preservation, mitigation, and interpretation of the historic property.

Plamondon added, "We encourage everyone to come watch our consultants in action. This process will be fun and we're hoping to find some artifacts that will help us tell the story of the Tannery. Our consultants are industry experts. We're committed to a healthy preservation ethic and strategies that enhance our efforts in bringing this exciting project to downtown."

Contact: Pete Plamondon, Jr.
Plamondon Hospitality Partners
(301) 695-5051
petejr@plamondon-cos.com

Downtown hotel & conference center will be a boon for Frederick

Original Published May 22, 2016
Frederick News-Post

Anirban Basu, Baltimore
Chairman and CEO of Sage Policy Group Inc.

During ongoing discussions concerning the proposed downtown hotel and conference center in Frederick, a considerable volume of inaccurate information has been set forth. This information has been in existence for so long, it is now accepted by many stakeholders as sooth.

Falsehood No. 1 — Private investors aren’t investing enough in the project.

According to the Maryland Stadium Authority, the entity that successfully delivered Orioles Park, M&T Bank Stadium and the University of Maryland’s Comcast Center, the Frederick facility will cost $81 million to develop. Of that total, $50 million will be contributed by private investors that will be principally responsible for costs associated with constructing the approximately 200-room private hotel and retail space, including the historic renovation of the Frederick trolley building.
Public-sector project costs encompass $8.3 million for 24,000 square feet of public meeting space, $9.6 million for much-needed public parking, $1.7 million for design and inspections, $3.4 million for land, and other costs. Many of these expenditures largely benefit community stakeholders as opposed to the private developer, which both justifies public participation and renders it necessary for the entire project to move forward.
Some are opposed to the facility simply because the public sector is involved. But a meaningful fraction of Frederick’s resurgence can be attributed to successful public-private partnerships. One of the most visible examples of what public-private partnerships can achieve is the Carroll Creek Linear Park, with its landscaped fountains, promenades and pedestrian bridges.

Falsehood No. 2 — Frederick is doing well enough and doesn’t need the project.

Our firm, Sage Policy Group Inc., recently conducted an in-depth analysis of real estate dynamics in Frederick. In some areas of the city, significant commercial vacancy has become apparent and not enough private-sector jobs are being created. Though downtown Frederick is regarded as a runaway success story, a large piece of downtown remains underutilized and associated with sagging property values.
This is where the proposed hotel and conference comes becomes relevant. Any significant downtown business community requires a high-quality place for visitors to stay and for conferences to be held. This is particularly true in a community that is home to Fort Detrick, where security concerns may make holding on-base conferences challenging.
Other similar communities have multiple downtown hotels. A recent piece authored by a project skeptic indicates that Annapolis, about half Frederick’s size, is home to four downtown hotels. Lancaster and Gettysburg, Pennsylvania, have five, while Charlottesville, Virginia, has three.

Falsehood No. 3 — The region is littered with similar facilities that failed.

Some have used examples of other facilities to argue against the proposed Frederick hotel and conference center. For instance, some have pointed to Rocky Gap as an example of why the project should be opposed. That is not a comparable facility. Rocky Gap is many miles from downtown Cumberland and has never been positioned to generate the types of synergies that the proposed facility will for downtown Frederick. Others have pointed to the Hyatt in Cambridge as another example of what can go wrong, but that facility includes 400 rooms, a golf course, a spa, incorporates 37,000 square feet of function space and encompasses 400 acres. It is a much bigger facility and, like Rocky Gap, it is also located apart from the nearest downtown, which likely limits its local impact.

Falsehood No.4 — Frederick’s taxpayers are imperiled

Here’s the most important consideration of all. Some project critics have asserted that Frederick taxpayers will be jeopardized. The memorandum of understanding negotiated by the city recognizes the fact that even the best laid plans can produce disappointment. Accordingly, the city has worked diligently to protect local taxpayers by requiring the hotel owner/operator to be fully responsible for all operational costs including any shortfalls — the city, county and state have no ongoing operational responsibilities and will provide no subsidies. Additionally, the city has added the state of Maryland as a capital financing partner. An independent MSA market study projects $1.5 million in incremental state tax revenue annually. Based on this estimate, the state can safely recover an investment approaching $20 million in taxable debt financing.

The city and county will participate in the form of a tax increment financing arrangement, with developer property tax payments used to pay off bond proceeds helping to finance the project. There are no ongoing public subsidies for operations. The facility will be privately owned, operated and maintained. Land will continue to be owned by the city of Frederick, with the developer responsible for paying annual ground rent. A portion of the net cash flow from the conference center will flow to the city.

In the final analysis, the city of Frederick has positioned itself to keep much of the project’s upside for Frederick’s citizens and has successfully deflected risk elsewhere. For whatever reason, some vocal stakeholders have chosen to remain opposed to the project, perhaps on ideological grounds, or simply because they have come to accept falsehoods as true.

Officials Comment on State Funding for Downtown Frederick Hotel and Conference Center

Media Release from The City of Frederick

Frederick, MD – April 6, 2016: Mayor Randy McClement, together with County Executive Jan Gardner, the Downtown Frederick Hotel and Conference Center Advisory Committee and other stakeholders provided comments today about the approved $16 million in state funding for the Downtown Frederick Hotel and Conference Center.  

“We are thrilled that the state recognizes this project as an important economic development game changer for the City of Frederick and beyond,” said Mayor Randy McClement.  “The funding of $1 million dollars allocated in the FY2017 State Budget as well as the pre-authorization for $7.5 million in FY18 and $7.5 million in FY19 provides funding from the State we were looking for, and now our team is working with the developer to develop an updated project scope, schedule, and budget.  This project will follow many, many more steps and stages of approval at the local and state level and it will take some time to fully understand how this new funding schedule from the State affects the final opening date.”

This project is a top priority for The City of Frederick, Frederick County, the Chamber of Commerce, Downtown Frederick Partnership, Frederick County Tourism and many others.  

The elected officials who represent the City have unanimously and consistently advocated for this project.  In addition to the incredible economic benefits of this venture as a cornerstone of the City’s revitalized downtown and Carroll Creek Linear Park, a full-service hotel and conference center will address the meeting, event, and conference needs expressed by the community.

“This project is another step forward in the transformation of Carroll Creek Linear Park and the redevelopment of the East Side of Frederick City, and toward economic prosperity,” stated County Executive Jan Gardner

An important catalyst for the project was the Major Employers Group (MEG) of the Frederick County Chamber of Commerce.  "For the past 8 years, businesses both large and small have been consistent in their strong support of the Downtown Hotel and Conference Center project,” said Elizabeth Cromwell, President and CEO of the Frederick County Chamber of Commerce.  “At every Chamber event for years, the consistent message from members is that we need a facility that will help businesses succeed and grow.  This project, including a full-service hotel under a nationally-recognized brand, combined with state-of-the-art conference facilities, will be a transformative and game-changing enhancement to the business community and Carroll Creek economic development efforts."

"Downtown Frederick Partnership is proud to be a part of an amazing team of community and business leaders who have worked hard to achieve this key milestone to bring critical business infrastructure to Downtown Frederick.  We look forward to working together as this project moves towards construction in the year ahead and, most importantly, we are anticipating the transformative impact of the Downtown Hotel and Conference Center on Downtown Frederick and beyond including more than 50,000 room nights and $26 million in spending annually," said Kara Norman, Partnership Executive Director.  
Market feasibility studies indicate that the Frederick market is large enough to support the Project and the existing hotel properties in the area.  More than 1.7 million visitors come to Frederick County each year, spending $380 million during their stay, according to statistics released by the Tourism Council. 

John Fieseler, Executive Director of the Tourism Council of Frederick County said of the project, “We are very excited about the inclusion of this project in the Capital budget.  This is one of many steps remaining, but a crucial step.  Securing the State portion of the public investment actually helps level the playing field for Frederick in terms of competing with other jurisdictions for investment and jobs through this type of project.”  

About the Project
The Downtown Frederick Hotel and Conference Center project is proposed as a 207 room full-service Marriott hotel.  The project will feature on-site parking, nearly 24,000 square feet of meeting space, and it will be located in Downtown Frederick, adjacent to Carroll Creek Park.  Studies indicate the project will support 110 direct and 280 total jobs, and provide $1.5 million incremental tax revenue to the State annually. 

For additional information contact: Nikki Bamonti 301-600-3835 nbamonti@cityoffrederick.com.

Public Sector Involvement is Appropriate for the Downtown Project

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.  

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

Hotel may be ‘the best economic development opportunity that our community has entered in decades’

DELEGATE KAREN YOUNG

Hotel may be ‘the best economic development
opportunity that our community has entered in decades’

I am writing in response to Sen. Michael Hough’s letter, “Arguments against hotel.”  I believe that the minority opinion of our state delegation needs to be heard as well, particularly since we represent the downtown area.  Although the majority of the Frederick County delegation voted against this bill, as of Wednesday we’ve received 62 letters of support for this project and 10 letters against it.  Included in the statements of support are the Chamber of Commerce, several major employers and numerous downtown businesses.

The senator’s first point is that he wants to cap the hotel tax at 3 percent even though enabling state legislation in 2004 gave the county authority to impose a tax of up to 5 percent.  This defies the goal of moving toward a charter form of government that gives local elected officials more of a voice in the decision-making process.

Every Maryland county and Baltimore City levies a tax on hotel room rentals.  Only Frederick and Cecil are at 3 percent.  The others range from 4 to 9.5 percent.  A 2 percent increase in the hotel tax would equate to between $2 and $4 per room.  For the most part, visiting tourist would absorb this.

The Tourism Council of Frederick County receives 97.4 percent of the current hotel taxes (projected at $1.7 million for fiscal 2016).  These funds are allocated to the Visitors Center, marketing efforts, nonprofits (e.g., the Weinberg Center for the Arts, National Museum of Civil War Medicine, Delaplaine Visual Arts Education Center, Historical Society of Frederick County, etc.), and other endeavors that promote tourism.  These funds benefit all hotels in the county.  A conference center would certainly generate incremental room rentals as well.  Not all conference attendees chose to stay at the flagship hotel.

Hough objects to raising this tax “to fund the construction of a competitor hotel.”  However, if one fact has been emphasized repeatedly, it is that public funds will not be allocated to the hotel. The hotel cost estimate of $40.7 million will be financed 100 percent by the developer.  Public funds are being sought to support public facilities such as the conference center, roads, streetscape and utilities.  This should meet the senator’s criteria of “general public items.”

The downtown conference center is unlikely to compete with conference centers in less urban settings.  Professional associations and millennials want to attend conference in unique tourist destinations that feature dozens of gourmet restaurants and boutique shopping within a short walking distance.  Public-private partnerships are the economic model for downtown conference projects throughout the country.  In fact, it is difficult to identify any urban hotel/conference center projects that are totally financed by the private sector.

The Maryland Stadium Authority has already invested in projects where other private ventures exist such as the Bethesda North Marriott Hotel and Conference Center, the Ocean City Convention Center, and the Baltimore Convention Center.  This is not the first example of a state-funded entity competing, on a limited basis, with a nearby private-sector venue.  No evidence exists that state investments in unique partnerships have resulted in private failures.

Hough claims that there are still “many unanswered questions about the costs of this project and the environmental problems of the site.”  The delegation has had about a dozen presentations on the project in the past two years.  In fact, on Feb. 4, 2014, we were handed a color-coded spreadsheet (revised version 3.3) that detailed all of the costs and revenue streams.

At least three needs-assessment studies have been completed on the project.  I am sure that the private developer of the hotel has conducted one also.  Not only is this a very financially viable project but it also may be the best economic development opportunity that our community has entertained in decades.

According to the contract purchaser of the property, the current property owner conducted both Phase I and II Environmental Studies in 2007-’08.  The various levels of site plan approval will require additional environmental assessments before proceeding.

Hough concludes by stating, “I voted against the state giving over $19 million to the proposed downtown hotel and conference center.”  I am fairly certain that the senator understands that the MSA bond leverage figure is a statement of capacity, not the actual funding request.  Moreover, the MSA does not intend to give the project anything.  Tax increment financing is a nationally accepted financing instrument that permits jurisdictions to promote economic development.  TIFs allocate property tax revenue from increases in assessed values within a designated TIF district to public infrastructure within the same district.  In other words, it is a loan, or advance, against future tax obligations that are generated by the project.

It is important to note that taxpayers will not have an increases tax burden as a result of this project.  Nor will taxpayer dollars pay for this project. Moreover, the significant increase in the commercial tax base resulting from this project will make a substantial impact in supporting local services.

Hough is correct about the delegation vote of 4-3-1 against the project.  I proudly stand with my two other colleagues representing District 3A, where the project will be built.  We appreciate that this exceptional economic development opportunity could represent an additional $26 million in annual local spending, 280 new jobs, $1.5 million in incremental annual tax revenues, and minimal risk.

DELEGATE KAREN LEWIS YOUNG
writes from Annapolis. A Democrat, Young represents District 3A.

This letter to the editor originally appeared in the Sunday, February 28, 2016 edition of The Frederick News-Post.