Rockville City Councilman Piotr Gajewski is questioning Mayor Phyllis Marcuccio’s appearance at the groundbreaking of a new headquarters for Choice Hotels International in Rockville Town Center, citing minutes of a closed-door session that show Marcuccio voted against an incentive package to attract the hotel company.
The council voted 3 to 2 on Aug. 15 to release the minutes of a closed session in which the incentive package was approved. Gajewski, who is challenging Marcuccio for mayor in the Nov. 8 election, requested that the minutes of the March 14 session be made public. Marcuccio and Councilwoman Bridget Donnell Newton voted against releasing the minutes, which show that the mayor voted against the package and that Newton abstained from the vote.
On Tuesday, Marcuccio was one of several featured speakers at a groundbreaking ceremony for the new headquarters at 121 Rockville Pike, which is being built by the Foulger-Pratt Companies.
“The hypocrisy of her appearance yesterday was stunning,” Gajewski said in an email to Rockville Patch on Wednesday.
The exact financial details of the incentive package were unclear Wednesday evening. But Marcuccio and Newton said that while they supported the Choice Hotels project, the terms of the package led them to vote against the incentives.
“I voted against the package that we were offering,” Marcuccio said after Tuesday's ceremony in an interview in which said she was aware that Gajewski was making an issue of her vote. “I didn’t vote against bringing them here. I have been a supporter all along. Simply, the package that was laid in front of us, there were portions of it I did not agree with.”
The city’s portion of the package was $1.8 million, in addition to $4.5 million in incentives from the county and state, Marcuccio said.
“Now that’s a pretty hefty percentage—for us to kick in [$]1.8 [million] and the state and the county only [$]4.5 [million]—when you consider the size of the county and the state versus the size and economic base of the City of Rockville,” she said.
Marcuccio was supportive of Choice Hotels’ plans when the move was announced in October.
“The City is thrilled with the company’s desire to relocate here, and welcomes Choice with open arms,” Marcuccio said in a news release at the time.
The release, from the governor’s office, said: “the State, County and City are providing $4.3 million in conditional loans and grants that are contingent upon job creation at the new headquarters. In addition, the company is eligible for State, County and City tax credits, including the County’s New Jobs Tax Credit, and could also receive Tax-Exempt Recovery Zone Facility Bonds.”
Gajewski, in an email to Rockville Patch shortly after the Aug. 15 vote to release minutes of the closed session, said: “The primary reason I wanted a release of all those Exec [sic] Session minutes is to document the march that we undertook to seal the deal with Choice Hotels. At every step of the way a unanimous Council, in partnership with Montgomery County’s office of economic development, was instructing staff to move forward. And then came a final vote where inexplicably the Mayor voted against the incentive for Choice and Councilmember Newton abstained (???) [sic].”
Maryland law allows government bodies, with proper public notice, to meet in closed session to discuss issues such as personnel or real estate matters or to consider a proposal for a business "to locate, expand or remain in the state."
Minutes of a March 1 closed session show that the council was, at that time, considering a package of tax credits that “could amount to $1.5 million” with “credits from the county and the state [that] could add up to [$]4.5 million for a total of $6 million.”
Foulger-Pratt executives and members of the economic development departments for the city and for Montgomery County attended the meeting. Minutes from the session were among six sets of minutes released per the council’s Aug. 15 vote.
Gajewski provided some details of the agreed-upon incentives package in a comment below a Rockville Patch article on Tuesday’s groundbreaking.
“The County total incentive is $3,731,577,” he wrote. “The largest part of the City incentive consists of use of parking spaces in the City garage (which are presently going unused).”
With Federal Realty Investment Trust taking over management of the three city parking garages in Town Center, effective today, “one could argue that the incentive is really provided by FRIT,” he wrote, adding that “The remainder of the City component of the incentive is $660,000.”
The parking spaces were a sticking point for Newton in her decision to abstain from the vote on the incentive package, she said Wednesday.
“I have always been in favor of economic development in Rockville and Choice is a wonderful opportunity for us,” said Newton, who is standing for reelection this year.
However, at the time of the vote “there was no deal about what to do with the garage,” she said.
Newton said that she wondered, “How are we going to pay for the garages if we’re giving ‘X’ amount of spaces away?”
She agreed with Marcuccio that Rockville put up “a lot of money” in incentives relative to the county and state when comparing tax bases.
She said she also was concerned about “striking the right balance” between how much the city could afford to offer Choice Hotels and “the pressure point” at which the company would come to Rockville anyway.
“Rockville is a great city. How much do we as a city need to do in addition to what we’re doing at a time when we’re asking our citizens to take cuts?” she said.
Newton took issue with Gajewski’s push to make the executive session minutes public, saying that the move could potentially stymie future negotiations with developers.
“I don’t think any executive session minutes should be open unless the participants are aware,” she said. “There’s nothing I am concerned or embarrassed about with my conduct in executive sessions. My principle is if someone said something off the record, I’m not going to turn around and repeat what they said. It’s a trust level.”
Gajewski took a different tack in the Aug. 15 email in which he explained his reason for pushing for the minutes to be made public.
“If the City cannot be counted on as a reliable partner to conduct business with, the residents will end up carrying a much larger tax burden than what should be, as business will simply stay away,” he wrote. “We made the Choice deal by a hair, with the Mayor providing no leadership and than [sic] nearly scuttling the deal in the end.”
Newton called for perspective.
“I would hope that people won’t take things out of context and [would] understand that there was a political reason behind why these minutes were open and others weren’t,” she said.