The old adage says that the grass is always greener on the other side of the fence. For Washington County, that greener grass lies some 30 miles the east. Local visionaries look at Downtown Frederick’s trendy restaurants and hip boutiques, and lament that Hagerstown should have the same.

Frederick’s visionaries see something different. Yes, there are restaurants and shops and other businesses—some prospering, others struggling—but there are also empty lots, crumbling buildings and blight. Downtown Frederick, it turns out, isn’t much different from Downtown Hagerstown: a mix of trendy, tawdry and tacky, of development and decay.

Frederick has its eyes on greener grass, too: tony Montgomery County, one of the richest political subdivisions in the world. Frederick’s visionaries, like their Hagerstown counterparts, want government to do something to make their town more like their eastern neighbor. This is to their credit; people should want their communities to prosper.

But this raises two questions: Do they know what public policies would yield such prosperity? And would they know if they don’t know? If the answer to both questions is no, then the visionaries’ efforts will yield only wasted public money and understandably frustrated taxpayers.

Previous Downtown Hagerstown revitalization efforts have included everything from postmodernist phalluses (no, really) to relocating several government offices to within a few blocks of the Square. So far, those efforts haven’t sparked the renaissance that people hope for. Of course, renewal also takes time, the right conditions and economically viable ideas—requirements the visionaries often don’t acknowledge. Thus, local taxpayers are rationally skeptical of the latest visionary claims that a new downtown school, walking trail, expanded arts district or publicly financed professional baseball stadium will provide the key to unlocking downtown growth.

Frederick likewise is proposing a grand, publicly financed project to spark downtown renewal: a $70 million hotel and convention center. My Maryland Public Policy Institute colleague Peter Samuel, a longtime infrastructure analyst and a Frederick resident, writes about the proposal in a paper available on the institute’s website, www.mdpolicy.org.[1] Washington County residents should read his report lest a similar story play out in Hagerstown.

Unlike Hagerstown’s phalluses, the Frederick visionaries can point to a previous public work that did boost the downtown: the 1990s construction of flood control measures and a linear park along Carroll Creek. In the 1970s, the creek twice flooded the downtown to devastating effect, decimating an already stumbling urban core. By channeling the floodwaters, government satisfied a necessary condition for Downtown Frederick’s renewal, and did so in an aesthetically pleasing way.

But there’s an important difference between the Carroll Creek project and the proposed convention center: flood retention is a true public good.

A public good, by definition, benefits a large group of people, but for structural reasons it’s difficult (if not impossible) to collect private payments for it. For example, firefighters don’t just benefit the owner of the house on fire, but the owners of neighboring houses that avoid catching fire. Yet firefighters aren’t about to go door-to-door demanding payment from all those neighbors before extinguishing a blaze, and the shrewd neighbor could refuse to pay, knowing the firefighters will still put out the fire to protect the other houses.

Given such problems, public goods are often provided by government because it can force people to pay. Usually, private provision is far more efficient than government because buyers and sellers can negotiate for what they want. But with public goods, government is often the best—though imperfect—option.

Retaining floodwater is a public good. But hotel/convention centers and pro stadiums aren’t: they have specific customers who can easily be charged for their use. When politicians use public money to provide such facilities, they don’t provide what the public wants; they provide what the politically powerful want. That often end up costing the public a great deal.

To analyze Frederick’s hotel/convention center proposal, Samuel looks at similar projects in similar cities around the country. The results aren’t encouraging. Perhaps the best comparison is Lancaster, Pa., whose publicly financed downtown conference center and Marriott-operated hotel opened in 2009. The facility is handsome and impressive. It’s also a commercial failure, unable to generate anywhere near enough revenue to pay its operating costs, let alone its debt service. It requires $6 million in annual subsidies to keep its doors open. That’s $6 million, year after year, that could go to schools, or farmland preservation, or repairing roads or emergency services—or remain in the pockets of taxpayers. Expect similar results if Frederick follows through on its plans, Samuel warns.

Some Frederick leaders have dismissed his analysis, saying he would condemn the downtown to further decay. Nonsense. Samuel doesn’t oppose urban renewal policies, only bad, wasteful—and arguably cronyist—ones. Hagerstown and Washington County would be wise to avoid such policies, too.