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From the Desk of
County Councilman Kirby Delauter

(11/2016) This month letís discuss the disaster known as the Downtown Hotel Conference Center (DTHCC). When we follow the trail of deceit for this DTHCC, youíll see that our County Executive, along with a majority on the Council will vote for this even though I laid out every reason under the sun as to why this is a really bad deal and the people that will get stuck paying the tab will be you, the taxpayer.

The City of Frederick, their Economic Development Office, the Chamber of Commerce, the County Executive, the County Department of Economic Development and the Frederick News Post, are all in on hatching this scheme to build the DTHCC under any and all circumstances. Opinions donít matter, economics doesnít matter, and the simple math required to come to the basic conclusion that -2 + -2 = -4, doesnít matter. You might ask, how does the Frederick News Post (FNP) play into this agreement? Itís simple, they own the land that is in question for this new building. The FNP stands to gain multi millions by dumping this alleged brownfield property off on to the taxpayers, so that A: they can get their payday, and B: they can avoid the multi millions it would take to mitigate the environmental impacts of cleaning up the site at their expense.

Itís nice how they run positive puff piece after puff piece on the front page of their paper letting the people know what a great asset the new DTHCC would be for downtown Frederick. As they run these fairytale front page stories, they have placed disclaimers that they own the property, they just fail to mention what a great deal they would get vs the shafting the taxpayer would get once dumped into their laps.

The issues I have with this are many, but in the interest of time and clarity, here are a few. The original plans called for a parking garage to house the hundreds of vehicles that will come to the DTHCC. The parking deck has been eliminated due to its additional $18 million cost. My first question to the City and their ECDC team, where will you now park the hundreds of vehicles that were going to be in the garage thatís no longer being built? Their answer, Somewhere on site. No plan, no details, just somewhere on site.

My second question to them, have you been approved by the historic preservation commission in the city since parts of the property are historic? Their answer - Not yet. My third question, have you been approved by the city planning commission? Their answer - Not yet. My fourth question, who will fund the $53 Million shortfall in financing since the private partner in the deal is putting up $40 Million of the anticipated $93 Million cost? Their answer - They want the county to enter a Tax Increment Financing agreement for $5 Million. They had the County Council raise the hotel tax to raise revenue.

We were then informed that an entity known as Maryland Economic Development Company (MEDCO) is now looking to get in on this sweetheart arrangement. I went ahead and pulled MEDCOís financial information which is readily available since they are a quasi-State agency. What I saw was shocking to say the least. MEDCO has a negative net worth of -$228 million. Their debt service will increase starting in 2018 by 500%. They have a project they built / financed at University of Maryland which they currently cannot make the debt payments. They built and financed Rocky Gap Resort for $54 Million it went bankrupt in three years and was sold for $5.7 Million. They built/financed the Chesapeake Bay Conference Center that is currently -$163 Million in the red. The best part of the MEDCO deal (If youíre not already impressed) is that if for some reason it fails, MEDCO can walk away leaving who else but the taxpayer to pick up the tab.

If this isnít enough to deter you from supporting such a horrific deal known as the DTHCC, let me add just a few more items that will make you ask yourself, why is the county even contemplating such a disaster. There is another privately owned Hotel Conference Center in Frederick known as the Holiday Inn Conference Center owned by Cohen Enterprises. Cohen Enterprises is preparing for an $89 Million renovation of this facility and the novel thing about this is, their doing it with their own money, no taxpayer subsidies. So, while Cohen Enterprises takes the risk of doing it on their own, we have politicians willing to subsidize the DTHCC so it can compete with Cohen on a very uneven playing field. This is just plain wrong.

We also have the Mayors and Town Councils around the county falling for the bait and switch by the Tourism council that is dangling the increase in the hotel tax revenues in order to bribe them for support of this DTHCC. They promised to give the Townís main street monies from the increased taxation so they can create ways to throw those tax dollars down a black hole too. Very shortsighted of our local leaders to not look at the long term conditions of this disaster.

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