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Wednesday, January 25, 2017

Rebid Hotel/Conference Center

George Wenschhof
Over the last seven years, The City of Frederick has repeatedly fumbled and stumbled throughout the development process for a desired downtown hotel/conference center.  The result is a convoluted project destined to be a failure for taxpayers.
Over two months ago, the Maryland Stadium Authority (MSA) announced their unanimous vote to not sign the latest Memorandum of Understanding (MOU) and the Maryland Economic Development Corporation (MEDCO) tabled discussion of the five-party MOU needed for the release of the $1 million authorized for the project during the 2016 session of the Maryland general assembly.
These announcements were followed with the December 8, 2016 press release by Maryland Comptroller Peter Franchot (D) projecting state revenue shortfalls totaling $38.3 million over the next two fiscal years.
As a result, it was not surprising to hear recently that Governor Larry Hogan (R) has not included the needed $7.5 million for the hotel/conference center in his annual state budget.

With The City of Frederick unable to meet the conditions in order to receive the $1 million authorized by the general assembly a year ago it would be irresponsible for them to attempt to insert the $7.5 million into the state budget. 
These actions combined have effectively put the current proposed project on life support with the likelihood of it moving forward zero.
It is painfully clear the size and scope of this project is premature and a lack of support exists for a project that relies on excessive public financing.
There are some proponents of the project who argue that if this project does not go through, it will be another three decades before a downtown hotel/conference center is built.
To borrow a phrase made popular by vice president Joe Biden, “that’s a bunch of malarkey”.  The economic market place determines the success of development.
Persisting to move forward with the present proposal will most likely result in colossal failure.
Instead, there should be an immediate move by the mayor and board of aldermen to terminate this effort.
In its place, the city should rebid the downtown hotel/conference center with new parameters that are more appropriate and feasible.
First, an update of the feasibility study on the need for a 207 room hotel and 24,000+/- square foot conference center should be done taking into account the privately funded Holiday Inn/Conference Center expansion is anticipated to be completed in 2018.
The Holiday Inn/Conference Center expansion will have a total of 205 rooms with 30,000+/- square feet of conference space.  It also has easy access to interstates and an abundance of onsite parking making the demand for two large venues within miles of each other suspect.
The long envisioned Carroll Creek development to date has brought mixed results with new businesses opening and most weekends bustling with visitors.
However, maintaining the same level of activity throughout the week has been problematic for some business owners resulting in chain restaurants The Green Turtle, Five Guys, Ben and Jerry’s, the Japanese restaurant Hinode and the Voltaggio Lunch Box being among those who have closed their doors.
After an updated feasibility study is completed, it is likely data will support a smaller, less costly and more appropriately sized hotel/conference center in downtown Frederick.
Prior to issuing a new request for proposals (RFP), the city should hold a series of public workshops to determine what level of public financing is acceptable to taxpayers.
The amount of public financing should be spelled out in the new RFP process, a serious omission in what was previously done. Examples of public financial contributions are a several million dollar contribution or a waiver of taxes for a specified number of years.
However, public financing should be limited to no more than ten percent of the overall cost of the project.  In addition, the city should not have ownership of the property or partnership in the project, both risks to taxpayers.
The geographic area where an RFP would be accepted could also be expanded in the downtown historic district.
Furthermore, the city should require the developer obtain financing, site plan and building permit approvals at their expense prior to providing any public financing.
All of the above steps would provide for more public input, likely increase responses, reduce public financing and result in the desired positive economic impact for the community.
I strongly support an appropriately sized downtown hotel/conference center and believe this addition will be a good fit for The City of Frederick. I also appreciate the efforts by community stakeholders to make this project a reality.
As a boy, my parents sent me to Cotillion classes taught at the Francis Scott Key Hotel located downtown at the corner of N. Court and W. Patrick Streets. It was a grand hotel where I learned proper etiquette and how to ballroom dance.
I always looked forward to when Mom would take the three of us to the restaurant located in the basement where we would have grilled cheese sandwiches and cherry cokes!
Sadly, the hotel would close and ever since there has not been a hotel located in what is now designated a historic district.
However, persisting in forcing a bad project forward is not in the best interest of The City of Frederick – Doing it right is.
Stay tuned.

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