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Friday, August 2, 2013

Should City Provide Funding for a Downtown Hotel?

George Wenschhof
Republican Mayor Randy McClement has promoted a downtown hotel/conference center since being elected and had previously expressed desire to have broken ground on the project by now.
Wednesday, during a City of Frederick mayor and board of aldermen workshop, a real estate consulting firm hired by the city, said there will be a funding shortfall between $10-12 million.
Frederick News Post reporter Jen Bondeson in an article published Thursday wrote, in part, “Developers say that when the proposed hotel comes to fruition, room rates will not be high enough to support the added features, said John Gibb, managing director of Jones Lang LaSalle, a real estate consultant firm.”

During tough economic times and a heavy debt service already existing with The City of Frederick, I asked mayoral candidates “whether they would support taxpayers funding the anticipated shortfall or an amount of the shortfall and if so, why and if not, why?”
Former mayor and unaffiliated candidate Jennifer Dougherty responded with "I don't think it makes sense from what I know today. Government services - police, trash, snow plowing, etc. have to be our priorities.

Government would be going into competition with private enterprises in the scenario described...that's a tough one to accept.
If the private sector cannot afford it, we should be careful about government getting into it. I think it's premature to commit or expect City taxpayer funds on this project."
Alderman Karen Young, who is one of three Democrats running for mayor sent me an email saying "I don't see the city filling that wide a gap. I have never been in favor of a cash supplement. I can see the city providing parking as long as it would benefit the overall community. I might also consider the city's participation in providing land under very specially defined conditions."
When I pressed her for a level of funding by the city she would support she said "That is premature. I'd have to see the total plan."
Former Republican mayor Jeff Holtzinger sent me an email saying "If a private hotel/conference center operator can make it work that would be a nice asset for downtown. I do not think the City should be in the hotel/conference center business.
There is a hotel with conference space in the City limits at the intersection of Opossumtown Pike and Thomas Johnson Drive. I do not think the City should be looking to compete with this privately owned hotel/conference center.  
The private sector will have much better insight as to whether such a facility is feasible in a downtown location and that is who should be calling the shots on this not City Hall. If a private developer does have an interest in a downtown site, the City's proper role would be to provide a predictable, consistent and fair regulatory process.  
No I do not think the City should fund any part of this shortfall. In my opinion that is not a proper role of local government to be the lending institution for a private enterprise." 
In an email, alderman Shelley Aloi, who is one of three Republicans running for mayor, said "I want to assure City taxpayers that under my leadership the City of Frederick will not pay for a downtown hotel, nor will we pay the debt service for a hotel. Instead, I see the role of City government as creating an environment that allows the private sector to flourish. The City's Department of Economic Development in cooperation with our consultant will continue to work with local partners (The Chamber of Commerce, Major Employers Group, etc.) to develop a plan of action that opens the possibility for a full-service hotel with large meeting space.
Today, large groups must travel to Washington, Baltimore and even Hagerstown to host functions. Frederick should have a share of this market and we can work toward this end in many ways that do not use City taxpayer dollars. For example, the City of Frederick already has plans for an additional parking deck. A partnership in which hotel occupants can use and pay for parking in a City owned deck would be a win-win situation.
Another scenario might be securing the use of State funding. To be clear, most State dollars are spent in other areas including Baltimore City and County, Prince Georges County and Howard County. Why should the taxpaying citizens in the City of Frederick support programs in these much larger areas? I submit that we should not. Since the State government will spend our money either way, the City of Frederick should work on behalf of citizens to bring the benefit of these State programs home to Frederick. If not, we will continue to send our money down the road to other communities."
At time of publication, Mayor Randy McClement and Carol Hirsch (D) had not responded to my inquiries.

Update: 8:00 AM - Mayor Randy McClement responded with the following: "I have said in the past and continue to say, the City will NOT build a hotel or conference center. We are facilitating in the discussions along with the private sector on the feasibility of having one in Downtown Frederick. The Hotel Advisory Group continues to move forward with examining this possibility and I look forward to their final recommendation.

I have said that if public infrastructure, such as a parking deck, was needed to help bring a facility like this to downtown AND that public infrastructure helped to serve the greater good of that service area, I would look at possibly moving that infrastruture up in the process."

Maryland state delegate Galen Clagett's office informed me he was on vacation with his wife and will respond upon returning home next week.
The manner in which the city proceeds with this project and the level of funding provided is likely to have an impact on the upcoming City of Frederick election. 
Stay tuned.
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1 comment:

Anonymous said...

I would not want my tax $$$ spent to subsidize any private businesses and most especially not a hotel business. If they want to come here, let them do it on their $$$ and not the backs of the taxpayers.