Frederick hotel project OK’d by legislature called growth catalyst, boondoggle

Almost 50 miles west of Baltimore lies one of the nation's redevelopment gems. Downtown Frederick, once a depressing urban center, now receives accolades for its historic charm, vibrant nightlife and robust high-tech economy.

What it doesn't have is a downtown hotel and conference center. For local leaders, that's a critical gap — and they've secured the state's help to fill it. They've proposed a high-end Marriott hotel, an $84 million project to be financed with $31 million in public money, $16 million of it from Maryland taxpayers and the rest from Frederick County and the city.

The General Assembly approved the money this year with few of the strings the state usually attaches to such development. The project still needs local approvals and a final go-ahead from a state panel chaired by Gov. Larry Hogan.

State Sen. Ronald N. Young, a Frederick County Democrat, said the project is a priority for the city's growing high-tech and biotech business sector.

"They think they can do international conferences here. They need a first-class hotel," he said. "It'll definitely spark other businesses in the area."

But to others, the project is a colossal boondoggle. These opponents say it's a textbook example of crony capitalism — a subsidy for wealthy developers. They say it would be out of scale in the historic downtown and would require the demolition of at least one historic building.

State Sen. Michael J. Hough, Frederick County's other senator, compares the project to the Rocky Gap resort in Western Maryland and the Hyatt Regency in Cambridge — two money-losing ventures in which the state invested two decades ago.

"I'm not exactly sure why the state is still investing in hotels, given our track record," the Republican lawmaker said. Rocky Gap lost money for years before casino gambling was permitted there under new ownership. The Cambridge resort continues to lose money, according to the Department of Legislative Services, but the state was repaid in 2006 and local officials insist it has stimulated growth in that Eastern Shore city.

A majority of the Frederick County delegation to the General Assembly opposed spending state money on the hotel project, but Young persuaded his fellow Senate Democrats to insert the expenditure in the capital budget. The Senate prevailed in negotiations with the House, and Gov. Larry Hogan did not contest the decision.

Even without most of the delegation, the project has powerful local support. The city government, led by Republican Mayor Randy McClement, is on board. The county executive, Democrat Jan Gardner, backs it. The Frederick County Chamber of Commerce and other local business groups have it on their wish lists.

"We believe it's the next real game-changer for our community — not a boondoggle," said John Fieseler, executive director of the Tourism Council of Frederick County. He said accommodations downtown are limited; the few bed and breakfasts are always full.

The project is unlikely to have gotten this far without Young. The 76-year-old senator was mayor of the city for 16 transformative years — longer than his late friend William Donald Schaefer was mayor of Baltimore.

From 1974 to 1990, Young's impact on Frederick was Schaefer-esque. After a catastrophic deluge tore through downtown in 1976, he launched the Carroll Creek flood control project, turning a civic hazard into a city centerpiece park, like a miniature version of Baltimore's Inner Harbor. He bought the old Frederick County courthouse and turned it into City Hall. Under his administration the city acquired a flood-damaged movie theater and turned it into the Weinberg Center for the Arts.

Young said 23,000 people lived in Frederick when he became mayor.

"It was dead. Downtown was gone. There weren't a lot of jobs," he said. By 2014, the population was 68,400.

It didn't come cheap.

"I spent money like you couldn't believe on infrastructure," Young told the Senate as it debated supporting the hotel. He said those projects led to a tenfold increase in the city's assessable tax base.

Nevertheless, Frederick voters had had enough of that approach by 1989, when he lost a bid for a fifth term.

Young calls himself a progressive Democrat. Hough, half Young's age at 38, is a staunch conservative who represents the more rural part of Frederick County.

The Marriott is "not a financially viable project," Hough said. He pointed to changes to the proposal over the years.

"It's been repackaged more times than a bad Christmas gift," he said. "Basically, the project is entirely reliant on government funding."

During the Senate debate over the capital budget, Hough contended that state financing for the downtown project would put other hotel operators at a disadvantage. He pointed to the case of Randy Cohen, owner of the Clarion Inn on a highway outside the city.

Cohen said he has nothing against a downtown hotel. He just doesn't want one built with public funds to compete with the privately funded conference center he wants to build.

"I basically am fighting for free enterprise," he said. He described the downtown hotel plan as "Ron Young's $16 million campaign contribution."

Cohen, like other opponents, says the bidding process to identify a developer was rigged so that it would eventually be awarded to Frederick-based Plamondon Hospitality Partners.

Both the city and Pete Plamondon Jr., co-president of the winning firm, say the process was fair.

Plamondon said his company owns four Marriott-affiliated hotels on the outskirts of Frederick. He said he expects his and other hotels to benefit from a downtown conference center.

"It's going to bring more people to the market," he said. "It's really added, induced demand."

Plamondon said the need for public money is driven by the high costs of building in a downtown area, including land acquisition, site preparation, parking and utilities.

"The public dollars are going to the public infrastructure," he said.

But some local activists aren't persuaded. They note that the Maryland Stadium Authority decided to pass on the project.

Jane Weir, a retired chef who lives in nearby Middletown, is founder of group called Friends of Frederick County. She uses her Facebook page to oppose the project. Peter Samuel, a retired journalist who lives in downtown Frederick, launched a blog called Frederick Hotel Boondoggle to report what he sees as flaws in the proposal.

Weir and Samuel are suspicious that the project's potential has been oversold, the risks of building a conference center minimized.

"We're worried that it's going to be a huge white elephant — very ugly," Samuel said. "We need smaller ones, boutique hotels that fit the scale of the city."

Plans for the hotel include tearing down a structure considered the last remaining tannery building in Maryland. The squat white brick building with a red brick smokestack abutting Carroll Creek Park is believed to be the last vestige of what was once a burgeoning industry.

"It has history to it even if it's not obvious from the look of it," Samuel said as he showed a reporter the site.

Weir said the dilapidated 1909 structure, which the Maryland Historic Trust has designated as eligible for protection, should be preserved and restored. An 183-room hotel, she said, would be out of place amid the historic buildings of downtown Frederick.

Fieseler, the tourism council director, said the building slated for demolition has little historical value.

"Nobody in the world is going to look at it and say that's a tannery building," he said. "There's nothing distinctive about it."

Richard Griffin, economic development director for the city, said the opposition to the hotel, "although very expressive," is small. He said the project is expected to bring 280 jobs and have $26 million in annual economic impact.

Griffin said public-private partnerships are typical for such projects. He pointed to a Marriott hotel-conference center built in North Bethesda with state help and regarded as a success.

"Everyone's waiting for this project to get going so they can jump in and begin the process of the full realization of the east side of downtown," he said.

The hotel proposal went to the city's Historic Preservation Commission last week. If it passes muster there and gets other local approvals, it will go to the state Board of Public Works for release of the state money — probably in about a year, Griffin said. There the decision will be up to Hogan, Comptroller Peter Franchot and Treasurer Nancy K. Kopp.

Hogan spokesman Doug Mayer said the governor's office normally does not comment on matters before the board. The board typically does not set policy. It's charged with ensuring that state money is spent legally.

Hough said Hogan knows that Frederick County Republican lawmakers oppose the project. The senator said he will work to stop it at the board.

"It's not over until they cash a check on it," he said.

mdresser@baltsun.com

twitter.com/michaeltdresser

An earlier version of this article misstated the name of Peter Samuel's blog about the proposed Frederick hotel and conference center. The blog's name is Frederick Hotel Boondoggle.

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