By Christiaan A. Hart-Nibbrig
“It is all-out war at this point. Now it will cost them some money. We are going to exact payment out of them.”
– James O. Pickard, Chairman of the Lancaster County Convention Center Authority (LCCCA), referring to the 11 hotel operators who, for the second time, were filing a lawsuit against the LCCCA, December 2002
Sponsors of the convention center and hotel project were riding waves of victory at the close of 2001 and the beginning of 2002.
On September 12, 2001, decorum be damned, with bodies still smoldering beneath the rubble of the World Trade Center, the Lancaster County Convention Center Authority decided to hold its scheduled meeting to determine which firm would manage the public convention center.
Rejecting the recommendations of its own appointed task force, industry experts, the local tourism bureau, and the great majority of the county’s hotel and motel owners, the LCCCA voted to name Pittsburgh-based Interstate Hotels to manage the convention center. Interstate had already been hired by Penn Square Partners to manage their ostensibly privately-owned hotel.
In December, after a ten-day trial, Lancaster County Court of Common Pleas Judge Louis J. Farina repaired to his chambers to write the opinion for the court in the case in which 11 county hotel operators sued the LCCCA, the city and county of Lancaster.
When he emerged, in early January, 2002, Farina, after having gutted the hoteliers’ case with a number of devastating preliminary rulings the previous summer, decided against the hoteliers on all counts.
The bottom line rulings: the hoteliers did not prove that the “burden” of the room tax outweighed the “benefit” from spillover business the center would generate; the room tax was Constitutional; and the ‘Armstrong Amendment’ of 1999 was not “special legislation,” and would therefore stand.
It was a clear and decisive win for the sponsors, but far from the final battle of this increasingly nasty civic conflict. Within days, the same 11 hotel owners filed an appeal with the Commonwealth Court.
On January 24, in a 6-1 ‘en banc’ (full, seven-judge panel) written ruling, the Commonwealth Court remanded the case back to the Common Pleas Court in Lancaster and back to Farina. The appellate court decision was sharply critical of Farina’s judgment, writing, at one point, “This doesn’t make sense.” The Commonwealth Court essentially told Farina, ‘Get it right this time.’
The LCCCA responded by hiring renowned and politically well connected Philadelphia lawyer, Richard A. Sprague, to petition to have the case heard not at the county level, but elevated to the State Supreme Court. Sprague, whose long career included defending the rich and high profile, including basketball superstar Allen Iverson on gun charges, was and is a “power lawyer” of tremendous clout in the legal community throughout the state.
The Sunday News,with its usual equanimity, reported on its front page, February 24, 2002:
“Convention Center on the edge/Authority files with Pa. Supreme Court, citing fears project could be killed by hoteliers’ lawsuit”
The article reported a Penn Square Partners claim that Marriott had given a firm deadline in which construction must begin on the project. That date was said to be March 23, 2003. Similar to the supposed demand from Marriott regarding a common manager for both the hotel and convention center, the Partners did not produce a document confirming the Marriott ultimatum. The record does not show any reporters from Lancaster Newspapers – one of the two major Penn Square Partners – asking for, or reporting the contents of any Marriott document in either situation.
Despite the lack of corroborating documents from Marriott, Chairman Pickard took the threat from the Partners seriously. “If we don’t start the project by March 23, 2003, the project is dead,” he said.
Penn Square Partners’ spokesman, Nevin D. Cooley said at the time: “Were Marriott to withdraw from the project, then obviously, our interest in the project goes away, too.”
In his petition on behalf of the LCCCA, Sprague asked the Supreme Court to take immediate control of the now almost two-year old lawsuit.
The hotel operators were again represented by Mette, Evans, & Woodside, the Harrisburg firm that had represented them since the beginning of the litigation. The hoteliers were making the same original claims, plus arguing that the project had changed so substantially since first adjudicated by Farina that the entire “burden/benefit” question should be re-examined.
Sprague’s petition included the following: “It is the present intentions of the builders of the… hotel [Penn Square Partners] to withdraw from the project unless construction of the convention center commences by March 23, 2003.”
The hoteliers were attacked from several other fronts. Mike Sturla, the democrat state assemblyman representing Lancaster, went public and was quoted saying: “If this [hoteliers’ lawsuit] is nothing more than a delay tactic to hold up the project long enough so it goes away, then they’re doing a disservice to everyone. They should let it be known that their objective was for it to die on the vine, not truth, justice and the American way.”
The words got uglier, more warlike. At the February, 2002, LCCCA public meeting, scant months after the 9/11 attacks, Lancaster Mayor Charlie Smithgall stepped to the microphone, turned to the hoteliers in the audience, and called them, “economic terrorists.”
At a republican committee meeting a short time later, Mayor Charlie Smithgall’s wife, Debbie, stepped onto the battlefield, allegedly telling her apparently armed (and licensed gun dealer) husband, “I’ll take that gun out of your pocket and blow that son of a bitch away.” The “son of a bitch” in question was one Bernie Schriver, a fellow republican, who had the gall to present the reticent Mrs. Smithgall a flier critical of her husband’s role in the project as she entered the meeting room. Police reports were made; charges were not filed.
The Lancaster City Council also took shots at the hoteliers as they pursued their case. The Council in a resolution, written by Councilman John Graupera, and sent to the Supreme Court as an amicus curae brief (‘friend of the court’), wrote: “the actions of the hoteliers are not defensible.”
Richard Sprague was successful in persuading the state’s highest court to decide the case on an expedited timetable, a move that was met by project sponsors with jubilation.
The Lancaster New Era ran a front page banner headline and accompanying article on April 24, 2002:
“Big win for center, hotel/Pa. top court’s decision to hear controversial case delights backers of proposed convention center, hotel for downtown Lancaster. A favorable ruling soon might allow construction to begin in early 2003.
“In what supporters are hailing as a major victory, the state Supreme Court decided Tuesday to take fast-track action on the fate of Lancaster’s downtown convention center and hotel. . .”
In the first week of May, 2002, attorneys for the Authority – Sprague and Scott Spencer of the Stevens & Lee firm — and those representing the hotel owners – Christopher Conner and Kathy Simpson from Mette, Evans — submitted written briefs before the State Supreme Court. The LCCCA submitted 50 pages of argument and 92 pages of supporting documents, like the City Council resolution.
“The hoteliers should not, in effect, be permitted to destroy this important economic stimulus project by delaying it, when they cannot succeed on the merits of their challenges,” the Authority’s brief states.
The hoteliers filed a 42-page brief, largely relying on the Commonwealth Court’s en banc ruling of January, 2002.
When the Supreme Court still had not decided the case by the end of June, the sponsors of the project again sounded an apocalyptic knell regarding the project’s future.
A Sunday News front page article on June 30, 2002:
“Court’s silence may force decision on center/Authority chairman says convention project at ‘crisis point’; to call meeting on fate if Pa. Supreme Court doesn’t act by Friday”
This article was striking because of the extremist language the sponsor Lancaster Newspapers editors used in socially conservative Lancaster County. According to the article, the Court’s delay “could mean aborting plans to build a convention center and luxury hotel in downtown Lancaster.” And High spokesman, Tom Smithgall, said in the same item: “They’ll [hoteliers] try to do anything they can to kill this project.” [emphasis added.]
Pickard backed off his “crisis” mentality at the July LCCCA meeting, vowing continuing support of convention center and saying there was “no plan to abandon project.”
The Convention Center Authority and its supporters got the news they were waiting for on July 16, 2002, when the State Supreme Court, in a 13-page ruling written by Chief Justice Stephen Zappela affirmed Farina’s decision and rebuking the Commonwealth Court’s remanding the case back to the lower court.
The lawsuit was not completely settled, however. The Supreme Court said there were remaining issues that should be decided by the appellate Commonwealth Court for an “expeditious review.” Those issues included whether the so-called ‘Armstrong Amendment’ was “special legislation” specifically intended to help only the Lancaster convention center project. The plaintiffs’ claim that the project had substantially changed in size, scope, and cost was also to be heard at the appellate court.
In the second week of September, 2002, both sets of lawyers went before the Commonwealth Court in Harrisburg. Three weeks after oral arguments were heard, on October 4, the Court returned its decision: Another complete victory for the Authority and sponsors of the project. The decision was unanimous.
“Hey, we are the clear winners and they are clear losers,” gloated Pickard to Lancaster Newspapers.
The hoteliers were not prepared to accept this defeat. Taking the advice of one of the jurists on the Commonwealth Court, the same group of 11 plaintiffs filed another suit. “The project had unquestionably changed,” says one of them today, the Continental Inn’s, Gleiberman. “It was much bigger and much more expensive. And when one of the judges on the appeals court suggested, during open oral arguments, that we file a second lawsuit arguing that fact – that it was a completely different project than the one Farina looked at — that is exactly what we did.”
The reaction from the sponsors on the new litigation was swift, brutal, and united. In a rare joint press conference, on December 6, 2002, the top Lancaster county and city officials, along with Chairman Pickard, expressed their collective outrage at the hoteliers, and their intention to counter sue them under the Dragonetti Act, which addresses the issue of filing frivolous lawsuits.
At the press conference, County Commissioner Ron Ford said the hoteliers “are holding the people of Lancaster County hostage to their own self-interest.” Mayor Smithgall was there to say he wanted the hoteliers accountable for the “serious economic harm” he said they were bringing to the city. And County Commissioner Chairman, Paul Thibault, said: “This extremism has got to come to an end,” adding the owners of the Eden Resort, Drew Anthon and Peter Chiccarine had a “war to the death mentality. They won’t stop until they’ve killed this project that will be a benefit to them and everyone else in the county.”
The hotel operators, who continued to be taxed for every room they rented, didn’t see things in quite the same way. And in the coming year, the opponents of the project would be getting some unexpected and very powerful support. The nasty war was about to get a lot nastier.