Updates From Galen Clagett

Clagett: Raise Hotel Tax for Downtown Use - Frederick News Post - January 13, 2012

Delegate Galen Clagett plans to pitch an idea today to raise the county's hotel tax and generate some extra cash that could help bring a conference center to downtown Frederick.

Now at 3 percent, the hotel tax rate in Frederick County is the lowest in the state, Clagett said. The state delegate is proposing to set the Frederick County rate at 5 percent, a change he estimates would bring in an extra $700,000 a year.

The bulk of the additional revenue would flow to economic development for the City of Frederick at a time when the money is sorely needed, he said.

"There are infinite possibilities here," Clagett said in a phone interview Thursday afternoon.

For the city, one of those options would be buying some land near Carroll Creek and taking a big step toward turning a long-discussed hotel and conference center from vision to reality, the delegate believes. Owning the property would give the city leverage in a building project without being too costly, he said.

Clagett plans to present the idea this morning to the board of directors of the Tourism Council of Frederick County. On Thursday, the council's executive director, John Fieseler, said the proposal is consistent with some of his group's priorities.

Downtown lodging and a conference center would stimulate the local economy, but since most hotels prefer to locate near highway exits, chances are slim that it would just spring up, Fieseler said.

Government backing could help lure a company to plant a hotel near the banks of Carroll Creek, he said, although he added that a cautious approach would be vital.

"I think that a community has to be very careful when there's a public-private partnership created. You have to make sure there's a benefit to the community. In the case where the community ... is saying we want this in our downtown area, then I think it makes a stronger case," Fieseler said.

And because neighboring jurisdictions charge 5 percent or more for the hotel tax, the rise shouldn't hurt the hospitality industry in Frederick County, he said.

Currently, state law allows the county commissioners to lift the hotel rental tax from 3 percent to as much as 5 percent. In fiscal 2011, the county fee garnered almost $1.1 million, with the bulk of the money going to the tourism council, according to Fieseler.

The bill to ramp up the hotel tax has been drafted, but Clagett said he wants to touch base with the stakeholders before he introduces it to the Maryland House of Delegates. He said he has already gotten positive feedback from the Frederick County Chamber of Commerce.

Although chamber representatives didn't want to comment on Clagett's proposal because they hadn't seen the bill, the organization has offered support for the hotel and conference center.

"(A) first-class facility would elevate Frederick's position in the regional marketing place and be the crown jewel of Carroll Creek park," Ric Adams, chamber CEO, wrote to Frederick Mayor Randy McClement on Jan. 5.

With a feasibility study for the conference center about to begin, the city is lobbying the state for about $1 million that could pay for land and preliminary engineering work on a project, said Alderwoman Karen Young. But considering the state's tight budget, asking for the funds could be a long shot.

Still, Young said she's not comfortable with turning to the hotel tax to raise the cash. She's also careful about the way the city gets involved in the project.

"I think government has a very limited role," she said.

Commissioners President Blaine Young -- whose father, state Sen. Ron Young, is married to Karen Young -- said he's not a fan of raising taxes either. And he disagrees with supporting a hotel or conference center in a time when the county is short on money to build or upgrade roads and schools.

"Why not use that opportunity to fix some of the problems you have and ease the burden on your everyday taxpayers?" he said.

Clagett emphasized the tax would target visitors to the county and wouldn't affect local residents.