The project is of particular importance to the county and Rockville because visitors now often stay outside the city. It would accompany a new corporate headquarters office for Choice Hotels International, which is relocating from Silver Spring to Rockville. The new headquarters, being developed by Rockville-based Foulger-Pratt, is under construction and will house 400 employees being relocated and as many as 75 more in the future.
The Cambria Suites would provide the company with a place next door to show off to visiting partners and staff rooms at one of its newest and most high-end chains. Choice and Interstate Hotels & Resorts, which will operate the Cambria Suites, will both own stakes in the hotel.
Marc Dubick, principal at Reston-based Duball, said that banks would not finance the hotel portion of the project without the subsidy. Economic development directors for both Montgomery County Executive Isiah Leggett and Rockville mayor Phyllis Marcuccio said that providing a $4.2 million to jump start the project would fill the financing shortfall and return $14 million in real estate and personal property taxes between 2016 and 2030.
Of the subsidy, $1 million would come from Rockville and $3.2 million from the county. The county council is scheduled to consider the measure Oct. 30.
“For us it was a very straightforward thing, which is that we will get revenues over the next 10 or 15 years that will exceed what we put into it, and anything after that is just gravy,” said Steve Silverman, director of the Montgomery County Department of Economic Development.
Silverman said that Leggett would have pushed to build the hotel regardless of Choice’s relocation decision. “This is not linked directly to Choice,” he said. “We would have done this independently of the Choice headquarters.”
Without the $4.2 million Laurie Boyer, executive director of Rockville Economic Development, said, “I don’t think the project would happen at all.”
“Particularly in this economy where lenders are not lending money in a way that they would have in the past, it’s much harder to get this type of a project financed,” she said.
She said the city’s payment would be split over six fiscal years.
Boyer reiterated that — despite banks’ unwillingness to finance such a project — how badly a hotel was needed in the area. “It’s the one amenity that downtown Rockville does not have right now,” she said. “There are certainly places where people can stay around this area but there really isn’t a hotel in downtown Rockville.”