County Council Approves MOU For Proposed Downtown Hotel & Conference Center

It follows the Board of Aldermen vote last week.

Frederick, Md (KM)  Another step was taken Tuesday night toward the construction of the proposed downtown Frederick hotel and conference center. In a 4-3 vote, the County Council approved the memorandum of understanding for the project. All of the Republican Councilmembers voted against it.

The MOU outlines the responsibilities of the City of Frederick, the County, the state and the developer of the project, Plamondon Hospitality Partners, in the design and construction of this facility.

Councilman Kirby Delauter says he’s worried that the city and the county would be on the hook if the project fails. “If it goes south, I’d like to have someone tell me that the taxpayers aren’t going to be on the hook for this,” he said. “I think they are because the only person left would be the taxpayer. That’s it. No one else can afford that kind of money if it goes in a bad direction.”

But Council Vice President MC Keegan-Ayer disagrees. “If this goes under, who assume that liability? It’s pretty clear to me that it would be the hotel operator, the developer,” she says.

Councilman Billy Shreve also voted against it. “The government does not belong in the hotel and conference business,” he says. “We are picking winners and losers by doing this.”

But Councilman Jerry Donald said it would be beneficial to the City of Frederick. “If we don’t do this, what’s the alternative? We have an aging building that is bringing us about $35,000 in tax revenue. So what’s the next move from there? It sits and it gets another year older.”

The hotel and conference center is planned for the former News-Post building on East Patrick Street. It’s expected to have 207 rooms, and a conference center of 23,500 square feet. It’s estimated to cost about $84-million, with the city, county and the state providing $31-million for public infrastructure improvements.

The county would provide $2.8-million through tax increment financing, which is revenue collected from increased taxes on the improved property.

The conference center would be owned by the Maryland Economic Development Corporation and operated by Plamondon. That worries Councilman Delauter, who said MEDCO has a poor track record, pointing to the Chesapeake Bay Conference Center in Cambridge, and Rocky Gap. “We’re going in to an agreement with a company that’s got a negative balance sheet and debt service that’s rising at 500%,” he said. “That makes absolutely no sense.”

But Council Vice President Keegan-Ayer said the county will not be taking any risks for this project. “The hotel owner acknowledges that neither the city, the county, MSA {Maryland Stadium Authority} or MEDCO shall have any ongoing operational financial obligations for the conference center. And the hotel owner shall assume the burden of all operational deficits, if any,” she says.

The Board of Aldermen approved the MOU last week.

On another topic, the Council received a long-awaited briefing on the agreement which lets the county take over ownership of Citizens Care and Rehabilitation and the Montevue Assisted Living Centers. Under the agreement announced last month, the County will continue to own the two facilities, but Aurora Holdings will operate them. “The cost to the taxpayers of taking these actions was less than selling these facilities,” said Doug Browning with the County Executive’s office. “By selling them, we retain the valuable assets and the services that the people needed and wanted.”

In 2013, the last Board of County Commissioners agreed to sell Citizens and Montevue to Aurora. But when she was elected, County Executive Jan Gardner worked to return the two centers back to county control.

Browning said had the sale gone  forward, it would have cost the county $20-million.

Councilman Delauter, who was on the Board of Commissioners which sold Citizens and Montevue, doesn’t believe the county came out ahead. “We talk about the taxes and maintenance. We’re not going to get any taxes now. $550,000 a year we’re never going to get that we would have gotten have we followed through with that agreement,” he said.

“I hope it works out,” says Councilman Tony Chmelik told the county staff. “It seems like you put in a lot of effort to create a model where the county is more hands off. This is probably close to privatizing it without privatizing it.”

The Council also reviewed a redrafted noise ordinance. Sheriff Chuck Jenkins wanted the law re-written to make violations a civil offense as opposed to a criminal offense. He says deputies can usually settle noise complaints without issuing citations. The Council is expected to vote on the measure on November 1st.

By Kevin McManus