The lead news article “2 studies on Convention Center fiscal problems ongoing” reports:

“Convention Center Authority Executive Director Kevin Molloy made headlines last month when he called for county commissioners to increase the county’s hotel room tax. But even before Molloy made his pitch Jan. 19, the Pennsylvania Dutch Convention and Visitors Bureau had convened its “Lancaster County Convention Center Fiscal Impact and Recovery Task Force,” comprised of officials from the Convention Center Authority, Visitors Bureau and some of the heaviest hitters in the local tourism industry… checking account that would be expected to run out in mid-2013.” .. (more)

Asked if there was any chance the convention center could default on its bonds, Molloy said in an email that if the hotel room tax isn’t hiked, “On April 1, 2012, the covenant is triggered in our agreement with the bank [that] the CVB’s [Visitors' Bureau] share of the hotel room guest tax revenue is diverted to cover those obligations. The ramifications of this event include moving to the use of finite funds in the LCCCA’s

WATCHDOG: Perhaps the most notable aspect of the article was it did not repeat the falsehoods that an increase in the county hotel room sales tax would be borne by visitors rather than the hoteliers and that the de facto price increase would not discourage tourist business. Let’s hope that we have reached the point where we can have an unbiased and knowledgeable discussion of the consequences of alternate subsidies.

Conceivably, any increase funding for the convention center ‘white elephant’ should come from general revenues rather the already damaged and declining county tourist industry.  The hotels have been made to heavily subsidize a convention center that does not generate meaningful business for them, has lured away shows and meetings from the Rt. 30 East corridor, and which absorbs hotels’ earnings and reserves that otherwise would be used for modernization.

A cause for worry is the recent information that county hotels with more than 200 rooms are not doing well.  The City of Lancaster would face much worse consequences were the Marriott Hotel to default since the City has guaranteed payment of its mortgage bonds and indirectly owns the facility.

It is ironic that the hoteliers whose warnings and predictions were  falsely denied during the convention center planning stage are now invited to participate in the rescue plan.