It is recommended that persons and scholars seeking to expand their knowledge of this sordid chapter in Lancaster’s history visit Lancaster Post series about Convention Center, a valuable collection of documents and insightful and carefully researched articles by “Artie See”, often based upon his presence at LCCCA committee and board meetings.

Of paricular interest to scholars is the listing of contracts and documents pertaining to the conventionc center project.

This so-called “poetry path” will insert an abstract wavy pattern into the sidewalk of the only remaining part of Penn Square which is truly historic.  The Central Market, Old City Hall, and the Griest Building are all listed on
the National Register of Historic Places.

This will seriously detract from the appearance of this part of Penn Square.

Is there no respect remaining at all for our heritage?

From PATRIOT-NEWS:

Three of the largest state employee unions wanted to remove one of the more pressing issues that Gov.-elect Tom Corbett will find on his doorstep when he walks into office on Jan. 18. They sought a one-year extension to their labor contracts that expire June 30.

Leaders of the American Federation of State, County and Municipal Employees Council 13, Pennsylvania Social Services Union Local 668 and United Food and Commercial Workers approached outgoing Gov. Ed Rendell as well as members of Corbett’s transition team about the idea.

While Rendell saw advantages for his successor to not have to deal with labor negotiations right off the bat as he did when he first was elected in 2003, the incoming governor showed no interest when the two discussed the matter last week…

Click here to read the full article.

Wow Robert. Were you always a socialist in capitalist clothing? Now you are blaming the lenders for duping and ensnaring purchasers. Really?? So when they bought the property or refinanced, they were forced by the lenders to sign the documents? Oh yeah, now I remember being in my bank and seeing all the loan officers packing heat. In fact, at my bank they installed a “rack” for the really thoughtful borrowers who weren’t sure they wanted to be duped.

Seriously Robert, get a clue. Is your position on this due to you having substantial real estate holdings that you are being negatively impacted by the cleansing process? If so, then you need to disclose that as you would expect other publications, who you have criticized for lack of transparency, to do.

EDITOR: Our real estate holdings were not impacted by “the cleansing process.” According to Stiglitz’s chapter “The Mortgage Scam” there were 100% non-recourse loans, mortgages with “teaser rates” whereby interest is low enough to qualify the buyer but then shoot up, negative-amortizatoin loans which allowed the buyer to choose how much to pay back, and “Liar loans”, so called because there was no verification of incomes stated on the application. Would those originating and selling the loans been likely to have done so if they had to own them and suffer the consequences of future default?

FINANCIAL TIMES:  A new Chinese anti-ship missile that will significantly alter the balance of military power in the Pacific is now operational, according to a senior US commander.

Admiral Robert Willard, the top US commander in the Pacific, said the Chinese ballistic missile, which was designed to threaten US aircraft carriers in the region, had reached “initial operational capability”.

His remarks signal that China is challenging the US ability to project military power in Asia much sooner than many had expected…  (more)

NEWSMAX:  Confidence among U.S. consumers unexpectedly fell in December, restrained by concern that jobs will remain scarce in 2011.

The Conference Board’s confidence index unexpectedly fell to 52.5, lower than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the New York-based research group showed today. Another report showed home values dropped more than economists projected.

The loss of confidence is at odds with a report from the University of Michigan that showed sentiment improved to a six- month high in December, and with data showing holiday spending posted the biggest gain in five years. Federal Reserve policy makers this month said “depressed” housing and high unemployment remained constraints on consumer spending, supporting their plans to expand record monetary stimulus…  (more)

CBC NEWS: The Canadian dollar hit and surpassed parity with the U.S. dollar on Tuesday, the first time in had accomplished the feat in more than a month.

Early in the morning, the loonie surged to hit the $1 US level. That was the first time the Canadian currency had hit the benchmark since Nov. 10. By 8:30 a.m., the loonie was changing hands at 100.13 cents US, up 0.94 of a cent on the day.

On Monday, the Chinese government hiked interest rates in an attempt to get inflation under control. That should have sent investors flocking to safety havens such as the U.S. dollar, but so far that hasn’t happened. The U.S. dollar was lower against most of its major benchmarks on Tuesday…

(Forty-eighth in a series)

Different law firms represented the parties to the contracts among Penn Square Partners (PSP), the Redevelopment Authority of the County of Lancaster (RACL), and the Lancaster County Convention Center Authority (LCCCA), and it is not the intention of this article to question the integrity of the law firms.   However, consider that subsidiaries of the High Group had acted as convention center project developer and chief planner and strategist, as project manager, as fifty percent equitable owner of the Marriott Hotel, and as the major contractor for the construction.  The relationship among PSP, RACL, The City of Lancaster and the LCCCA was so intertwined that the parties were inclined to go along with requests by Penn Square Partners and its general partner’s principal S. Dale High.  Evidence of this is the agreements contained provisions which are virtually unprecedented among organizations dealings at arms’ length and devoted to the public’s interest.

Below are outstanding anomalies:

1)      Penn Square Partners was only fronting $11 million dollars, in a form that remains unclear,  towards the $72 plus cost of the hotel while the rest of the rest of the funding was either public funds or loans guaranteed by the RACL and the City of Lancaster.

2)      Despite only an investor in the Marriott Hotel, Penn Square Partners claimed half of any additional funds contributed to the state for the convention center portion of the project.

3)      Penn Square Partners was to receive 50% of the proceeds from naming rights to the convention center, even though their investment was strictly in the hotel

4)      Furthermore, LCCCA agreed to the shameless demand that S. Dale High as an individual should have certain first claims to acquiring the naming rights to the convention center, a provision that would discourage other bidder and prevent the auctioning of the rights to the highest bidder.

5)      A High Group subsidiary was awarded the food concessions contract at the convention center and was only required to pay 5% of revenue up to a threshold figure and 10% commission thereafter rather than standard industry practice ranging from 20% to more than 30%.

6)      Significant facilities to be utilized by the hotel were provided at the cost of the convention center.  According to Taxpayer Tragedy by ‘Artie See’ in the Lancaster Post, “..parts of the buildings that are being built and will be maintained by the LCCCA, such as the hotel kitchen and ballroom, for which the Penn Square Partners will pay $100 a year to use.”

“The ‘Declaration of Condominium’ agreement, dated March 27, 2007, includes the following excerpt from section 2.2(m):

‘Convention Center Unit’ means Unit number 1 to be owned by the LCCCA which will consist of the following areas of the Property and the Building currently constructed and to be constructed on the Property, as more specifically depicted on the Plats and Plans:

(i) All Interior areas on the Watt & Shand Meeting/Administration Level;

(ii) All Interior areas on the Watt & Shand Ballroom A Level, except the Hotel Business Center;

(iii) All Interior areas on the Watt & Shand Ballroom B Level;

(iv) Those Interior areas on the Watt & Shand Lobby Level identified as Kitchen (and notwithstanding anything to the contrary contained herein, including Kitchen equipment), Mechanical and Sound Control Room.

7)  Although the Project represented three distinctly different economic interests – PSP for the Marriott, LCCCA for the Convention Center, and the  common areas with divided ownership between PSP and LCCCA, the entire project was served by only a single electric meter, and with no provisions for submetering.  When queried by NewsLanc, they said this was on the instructions of High executive Tom Smithgall at the time that High was Project Manager.  When this was brought to Smithgall’s attention, he said he would have to ask around and never responded back to NewsLanc.

Studying the plans and agreements among the parties was a formidable task.  Chair Ted Darcus gave the LCCCA board members the documents less than two days before the meeting.  The City board members joined Darcus in voting down the county appointees’ request that the approval of plans be held over to either the next board meeting or an earlier special meeting to allow them to perform their due dilligence of review the material.

8)  The multi-story large break out area in front of the convention center exhibition center is continuous with the lobby of the Marriott with no provision for closing off the areas, thus requiring the wasting of huge amounts of energy at high cost to heat and aircondition the vast area despite the convention center only being in use a small fraction of the time.  This particular design flaw would seem to be a sign of questionable competence.

“This clearly means that the LCCCA will pay to build, own, and maintain areas which will also be used by the Penn Square Partners.”

###

Chapter Forty-Nine: Puzzling Propaganda

The following article appeared in the Lancaster Post on September 5, 2008:  by Artie See

The taxpayer-financed hotel and convention center in downtown Lancaster, PA would have never been built had it not been for a series of questionable actions taken by local public officials. At no other time during the last half-century have so many Lancaster City and County “public servants” done so much to benefit so few.

In 2003, County Commissioners Paul Thibault and Ron Ford decided to not run for another term. As the political campaigns to replace them took shape, most of the candidates for County Commissioner questioned the wisdom of proceeding with the greatly-enlarged hotel and convention center proposal. As “lame ducks”, Thibault and Ford took desperate action late in the year to make certain no future County officials could ever kill the project: they enacted a County guarantee for a future $40 million convention center bond sale. To make certain their successors could never revoke their actions, Thibault and Ford authorized a $40 million bank loan from Citizens Bank, called it a “bond sale”, then deposited the balance (less hundreds of thousands of dollars in legal fees) into the same Citizens Bank. This action cost taxpayers $18,000 a month for over three years, the difference between interest paid and interest earned. The third County Commissioner at the time, Pete Shaub, voted against these actions; ever the opportunist, after his reelection he worked to support the project.

Just over a year later, the leadership of the Penn Square Partners announced that they could no longer afford to build their “private” hotel if they also had to pay the full amount of taxes that would be owed on the building. The Penn Square Partners proposed that their real estate taxes would be frozen at the 2003 rates on the vacant Watt & Shand building for 20 years, in exchange for a promise of additional payments in lieu of taxes IF their profit margin would ever exceed an unrealistic 12%. The elected board of the School District of Lancaster held several public hearings on this issue; during one held at Edward Hand Middle School, both Democratic State Rep. Mike Sturla and Republican Mayor Charlie Smithgall shouted threats at school board members. Several of the school board members later received messages that if they didn’t approve the PSP tax abatement, additional State funding for the SDoL would be denied.

On Tuesday, March 16, 2005, at McCaskey East High School, the Penn Square Partners presented a slightly improved offer to the SDoL, which was presented to the school board in a motion by one of its members – but it was never seconded, so it died. The school board then attempted to negotiate by approving a counter-proposal; this was immediately rejected by S. Dale High himself, who declared the project dead. Mr. High’s anger at being rejected was demonstrated when he ordered the signs on the inside of the Watt & Shand building’s windows to be scraped off the next day.

Lancaster mayor Charlie Smithgall, aided by Rep. Mike Sturla and Sen. Gib Armstrong, frantically worked for the next several days to come up with a way to give the Penn Square Partners exactly what they wanted. Their solution practically ripped the “private” out of the “private-public partnership”: Lancaster City, through its Redevelopment Authority, would purchase the Watt & Shand complex from the Penn Square Partners (which had bought it for $1.25 million) by turning $7 million in previous State loans into grants. The Redevelopment Authority of the City of Lancaster would then build the hotel, practically guaranteeing that the structure would be tax-exempt. The Penn Square Partners would then only need to pay $10 million (later increased to $11 million) in “equity” (what form was never made public) to furnish and equip the $75 million hotel building; they would also make payments on a $24 million construction mortgage over 20 years. The deal (as approved by City Council) promised nominal payments in lieu of taxes to the Redevelopment Authority of the City of Lancaster, which holds title to the hotel building.  (In 2010, RACL provided money received from the PSP to the Mayors’ Office Of Special Events, which supposedly helps to pay for police overtime; these funds do NOT appear anywhere in Lancaster City’s budget.)  As a result, an agency of the Lancaster City government built the hotel for the benefit of the Penn Square Partners, and the SDoL will receive no taxes from the site for decades.

Out of several other examples of questionable actions by government officials to support the hotel and convention center project, one more is noteworthy. When bids for constructing the project were opened in July of 2006, they were more than $20 million over budget. The Penn Square Partners publicly proclaimed the project dead, one of over a half-dozen times they had done so. After weeks of frantic negotiation, once again involving Rep. Mike Sturla and Sen. Gib Armstrong, Lancaster mayor Rick Gray announced the funding gap had been closed, and the project saved. But many of these savings have never materialized:

- The Penn Square Partners did increase their investment from $10 to $11 million in “equity”.

- $7 million was added to the LCCCA’s borrowing power when the Lancaster City Parking Authority agreed to build the project’s parking garage.

- An expected $1.5 million increase in the Act 23 construction bond turned out to be just over half a million dollars.

- Most of an expected $5.25 million in “value engineering” was nothing more than fiction.

- A $3 million easement for the Watt and Shand facade, which was to have been provided by the Historic Preservation Trust, has never been mentioned since.

- $2 million in naming rights for the convention center has never been pursued by the LCCCA, because contractual agreements require half of this amount be given to the PSP.

In other words, the project was “saved” with the equivalent of smoke and mirrors.

How did the LCCCA proceed without these additional funds? It simply borrowed more money.

At the Annual meeting of the board of trustees of the Lancaster Public Library (Duke Street), Stacey Youcis was elected as president.  She served as vice-president in 2010.   Youcis is employed at Lancaster General Hospital as Vice President – Operations.

Anna Ramos was chosen as vice-president and Jim Dougherty as secretary.

Haley Field, who had resigned as president when the renovation plans were cancelled, continues as treasurer.

Gary Weaver, president during 2010 and prime mover to cancel plans to renovate the library in 2008, is stepping off the board.  John McGrann, president in 2009, and the other major proponent of the last minute cancellation of plans for renovation, remains on the board.

Haley Field is the wife of Robert Field, investor builder and publisher of NewsLanc.com, who had served as project manager for the proposed renovation and expansion project.  According to Robert Field, “The renovation was at had.  We had state funding and adequate commitments from major donors.    Plans were ‘shovel ready.’  We also had a very good friend in Senator Arlen Specter for access to  funds for the expansion component from the Recovery Act.  And then the rug was pulled out from under the project in a moment of ignorance and panic on the part of a couple of ring leaders on the board.  It has been a rare and bitter personal disappointment for Karen and me,  and a great loss to the community. I hope that somehow we can yet achieve what was allowed to slip from our grasp.”