CC Chapter Seven Revised: The Convention Center Grows

By Christiaan Hart-Nibbrig

In late March of 2000, as the LCCCA was negotiating to buy property around the proposed convention center,  the LCCCA appointed a “Tourism Industry Task Force” to investigate the appropriate size, design, and market for the convention center.

It was just six months earlier that Ernst & Young recommended a 61,000 square foot convention center in its report for the Lancaster Campaign.  The Ernst & Young report superseded the LDR International “Winterbottom Study” of a year earlier.  Winterbottom recommended a “small” conference center on Lancaster Square.

The nine-member Tourism Task Force was led by E. Bradley Clark, an LCCCA board member and commercial realtor.  Also on the task force were Blaise Holzbauer, a non-voting member of the authority board and Willow Valley Resort manager, and Brad Brubaker,  president of the Pennsylvania Dutch Convention and Visitors Bureau (PDCVB)

Also named to the Task Force, along with two restaurateurs, a theater director and Lancaster Alliance board member, were Peter Chiccarine, an executive with the Eden Resort, and Mark Clossy, general manager of the Lancaster Host Hotel.

Chiccarine and Clossy’s hotels were among the 37 plaintiffs suing the LCCCA, Lancaster County, and City of Lancaster

On April 8th, both Chiccarine and Clossy were unanimously voted off the task force by the LCCCA board.  The hoteliers had been appointed only two weeks earlier.

“It’s regrettable,” said LCCCA Chairman James Pickard at the meeting where Clossy and Chiccarine were removed from the task force.  “Unfortunately, our hands are tied.  There is a clear conflict of interest.”

“I didn’t get a chance to attend one meeting,” Chiccarine was quoted in the New Era. “I was looking forward to giving honest input into the issues that need to be discussed on that committee.”

In July, the Tourism Task Force went before the LCCCA board and recommended an expansion of the size of the convention center from 61,000 square feet to at least 100,000 square feet.

“We strongly recommend the authority employ further research to study why the convention center should be initially designed and built to be no less than 100,000  net square feet of exhibit space,” reported Clark to the LCCCA board

The next month, at the August, LCCCA board meeting, the board commissioned PricewaterhouseCoopers (Pricewaterhouse), another accounting consulting giant, to examine the viability of a larger convention center facility.  Pricewaterhouse was to essentially re-size and update the Ernst & Young market analysis of the year before

Three months later, Pricewaterhouse delivered its study at the November 8th LCCCA meeting.  Robert Canton, National Director of the PricewaterhouseCoopers’ Sports, Convention and Leisure Services practice, and the principal author of the study, presented the report.

The study – “Market and Economic Analyses for the Proposed Convention Center in Downtown Lancaster” – is actually very similar to the Ernst & Young study, except it only focuses on the publicly-owned convention center, and not both the center and the privately-owned hotel.   The introduction describes the scope as Market analysis, building program, utilization, financial and economic impact estimates.”

Like Ernst & Young, Pricewaterhouse noted some of the weaknesses of the Lancaster project:  poor air access to the site, and limited downtown amenities and entertainment options.

The major difference between the studies is that Pricewaterhouse recommended a much larger convention center than Ernst & Young

Pricewaterhouse recommended a convention center of between 100,000 and 114,000 square feet of “Total Public Space,” and a “Gross Building Area” of between 160,000 and 180,000 square feet.

The Pricewaterhouse consultants estimated that construction costs for the larger facility could reach $35 million, a $5 million increase from Ernst & Young’s estimate, on a facility nearly double the size.

Pickard said a larger facility was appropriate because more land was purchased by the convention center authority than originally envisioned for the project.

“It appears that PricewaterhouseCoopers has done a very thorough job,” Pickard said upon receiving the Pricewaterhouse study. “I am pleased with the recommendations, and encouraged to hear that the demand for the convention center is even greater than we originally anticipated.”

During the public comment portion of the meeting, after Pricewaterhouse’s Robert Canton presented his report, Peter Chiccarine, the executive with the Eden Resort, and a litigant against the Authority, exchanged angry words with Chairman Pickard and Authority solicitor, John Espenshade.

Chiccarine wanted the board to answer questions about the Pricewaterhouse study.

“You’ve got to make up your mind which jersey you’re wearing, but you are not going to play for both teams — not in my ballpark,” Pickard snarled to Chiccarine.

Chiccarine continued to challenge Pickard, and the chairman told Chiccarine to sit down.   Chiccarine did not, and continued to demand public discussion of the Pricewaterhouse report.

Pickard told Chiccarine he was out of order when he continued to press Pickard.  LCCCA solicitor, John Espenshade, told Chiccarine  he could either sit down or leave.  When Chiccarine did neither, Espenshade instructed someone to call police.
Chiccarine left on his own at that point.  On his way out, Chiccarine told a New Era reporter that he had approached Pickard about discussing the Pricewaterhouse report the day before and Pickard told him to bring it up at the LCCCA meeting.

 

“He set me up,” Chiccarine said of Pickard as he left the meeting.

 

The hoteliers’ lawsuit against the LCCCA, Lancaster County, and City of Lancaster, was heard in the first week of December, 2000.

After a ten-day trial (the case was suspended for the Christmas holidays, and resumed the second week of January) Lancaster County Court Judge Louis J. Farina repaired to his chambers on January 13, 2001, to write the opinion for the court.

By now, there were only 11 plaintiffs remaining of the original 37.  Most cited the legal costs as the reason for dropping out of the suit.  The Brunswick Hotel, next to where the center was to be originally built, withdrew without commenting.

On February 5th, after having gutted the hoteliers’ case with a number of devastating preliminary rulings the previous summer, Judge Farina decided against the hoteliers on all counts.

The bottom line according Farina: the hoteliers did not prove that the “burden” of the room tax outweighed the “benefit” from spillover business the center would generate to other hotels; the room tax was Constitutional; and the ‘Armstrong Amendment’ of 1999 was not “special legislation,” and would therefore stand.

“Plaintiffs simply cannot prove that the tax has produced any direct burden in and of itself. ….Plaintiffs simply cannot carry their heavy burden to prove the hotel tax unconstitutional,” Farina wrote in his 43-page opinion.

It was a clear and decisive win for project sponsors, but far from the final legal battle of this increasingly nasty civic conflict.

Within days, the same 11 hotel owners filed an appeal with the Commonwealth Court:

“The County Ordinances, the City Ordinance and the Armstrong Amendment, facially and as applied to the Plaintiffs, constitute arbitrary, capricious, irrational and unreasonable regulations and legislation which violates Plaintiffs’ substantive due process rights as secured by the Fourteenth Amendment to the Constitution of the United States…”

The battle would continue…

XXX

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Updated: February 4, 2013 — 7:12 am
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