County Council Discusses MOU For Downtown Hotel & Conference Center

The panel is expected to vote on it on Oct. 25th.


Frederick, Md (KM)  There was plenty of discussion Tuesday by the Frederick County Council on the memorandum of understanding for the proposed downtown hotel and conference center.

The MOU states that the city will own the property located at the old Frederick News-Post building on East Patrick Street and will lease it back to the developer, Plamondon Hospitality Partners. The hotel will contain 207 rooms and two lounges and two restaurants. Part of the agreement calls for the developer to restore the historic Frederick Trolley Building.

The agreement also calls for a 23,500-square-foot conference center which will be owned by the Maryland Economic Development Corporation, and be operated by Plamondon.

The project is estimated to cost $84-million with $53-million spent by the developer of the site, and $31-million by the city, county and the state.. “Included in this $31-million of public improvement cost is an estimated tax increment financing bond, or TIF bond, from the county of $2.8-million, which will be supported by a portion of the increase in the county’s property tax revenue resulting from this project,” says Doug Browning, Special Project Manager. MEDCO will issue those bonds on behalf of the city, the county and the state.

MEDCO’s ownership of the conference center was raised by Councilman Kirby Delauter, who is concerned about the agency’s track record. He said MEDCO’s has $228-million in losses from the Chesapeake Bay Conference Center on the Eastern Shore, Rocky Gap in western Maryland and other projects. “You have four projects right now that just don’t look from the MEDCO standpoint. So to bring them in looks like a desperation move,” he said

But City Economic Development Director Richard Griffin said they were different projects. “In several of those instances, those were projects that were done with the full knowledge of the legislature and the governor to provide basically economic stimulus in depressed economies. In both of those instances, those were projects much larger than the one we’re talking about for Frederick,” he said

Councilman Tony Chmelik said he was concerned about what would happen if the project fails. “We can write the best paper in the world, and you could fabricate the best deal. But it never stops, folks, from anybody having a worst case scenario,” he said. “It’s always out there. There’s nothing that says it could not happen.”

Griffin said the MOU protects local government if the project does not succeed. “The reason we structured it this way to insure that we don’t have the same situation that has happened in a couple of other places where the state or another public entity was on the hook for any losses,” he said. “We don’t anticipate them here, but if there were any, the developer is on the hook for them.”

“There’s dollars flowing to it from the public taxpayer; none at all,” he said.

The County Council is expected to vote on this MOU on Tuesday, October 25th. The  Board of Aldermen will hold a  Workshop on the agreement  on Wednesday, October 12th, in the first floor city hall boardroom.

By Kevin McManus