Frederick News-Post Doesn’t Understand Public-Private Partnerships

A Frederick News-Post editorial grossly misinterpreted the purpose behind public-private partnerships.

The piece, entitled “Hogan, GOP inconsistent with public-private partnership” makes the case that support for toll lanes on I-270 and I-295 suggests that the administration and Republicans should support such a partnership for a conference hotel in Frederick:

We would be remiss if we concluded without noting the irony of Gov. Hogan pushing so hard for this massive public-private partnership while he has maintained unyielding opposition to a public-private partnership in Frederick to construct the downtown hotel.

Hogan and other GOP opponents dislike the idea of the state helping a private company build a hotel to support economic development in the city, but they cheer wildly when the state partners with private companies help solve traffic congestion (and in large part to sustain economic development) in the National Capital Region.

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It is more than a little inconsistent.

The FNP editorial board seems to misunderstand the point of entering into public-private partnerships in the first place.

In the case of the construction of the toll lanes on I-270 and I-495, a partnership is beneficial to get the lanes built. Transportation is generally a government function, and it makes more economic sense for the state to build these using a partnership than it is to assume the risk of building the lanes themselves. They found a willing dance partner to build the lanes, they made an agreement, and the lanes are going to get built.

At the end of the day, additional lanes serve a legitimate public need. The lanes will facilitate national defense, facilitate commerce, and facilitate emergency services, among other vital interests.

If we use that standard, how exactly does a conference hotel in Frederick serve a legitimate public need?

The hotel issue has been a topic of conversation for years in Frederick. Various state, county, and city entities have pledge money helping to facilitate the construction of a hotel and conference center in downtown Frederick. More than $5 million of state money has already been appropriated to the project, though Governor Hogan wisely withheld that funding at the chagrin of the Chamber of Commerce crowd. In total, $16.5 million has already been pledged from local governments to build this, about 21% of the cost of the project.

But why are any governments getting involved with funding this project? Why should governments at the state, county, or city level get involved with helping to fund a project that will directly compete with already existing hotels and conference centers in the Frederick area?

The short answer is that there’s no reason for governments at any level to be fronting 20% of the cost of such a hotel.

You’ll remember that this hasn’t exactly gone well in the past. The O’Malley Administration ensured nearly $1.8 milion in state grants went to the failed Black Oliver Hotel. Baltimore City government has spent over a decade trying to recoup their investment in the downtown Hilton Hotel.

The Frederick News-Post makes an argument that the opposition to a public-private partnership for a hotel and conference center are inconsistent. It isn’t. State taxpayers should not be subject to agreements to help grease the skids for private businesses to receive a leg up on the competition, which is exactly what such a partnership would mean. Government should not be in the business of picking winners and losers, particularly in Maryland what such decisions have failed spectacularly.

While there are understandable reasons that the Frederick News-Post editorial board to support the construction of a hotel in downtown, their reasoning in this editorial is disingenuous and inconsistent with the proper role of government.

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