By Christiaan Hart-Nibbrig
Despite the ‘miracle’ rescue of the convention center project, after the Watt & Shand building was purchased by the Redevelopment Authority of the City of Lancaster, sponsors had much to be concerned about in the spring of 2005.
The School District of Lancaster’s rejection of Penn Square Partners’ TIF property tax abatement proposal on March 15th revealed that public sentiment for the project was mixed, at best.
The TIF debate also stirred the concerns some of Lancaster’s estimable citizens like Randy Carney, April Koppenhaver, and Robert Field, who used their considerable ability and experience to question the project’s feasibility.
In early March, less than two weeks prior to the TIF vote, the Greater Lancaster Hotel and Motel Association brought in Dr. Heywood Sanders to speak before a couple hundred people at the Liberty Place auditorium in the city.
Dr. Sanders, a public policy professor at the University of Texas, was the author of a January, 2005, study from the Brookings Institute, “Space Available: The Realities of Convention Centers as Development Strategy.”
Among the study’s conclusions: “The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections.”
At the Liberty Place presentation, Sanders warned, “Don’t expect to get what you were promised. No one does. The measure of risk is the willingness of the private sector to commit to the project.”
The most pressure applied to project sponsors, and an existential threat to the project itself, was coming from the Lancaster County Board of Commissioners.
In early 2005, the three-person commissioner board – Pete Shaub, Dick Shellenberger, and Molly Henderson – wasn’t exactly “new” since they had been in office for a full year. But the dynamics of the board changed dramatically when the mercurial and often abusive, Shaub, was replaced as chairman by the much more genial Shellenberger in December, 2004.
Shellenberger needed Democrat Molly Henderson’s vote to ascend to the chair, which he got, and the two formed an unlikely majority. Shellenberger came from the most conservative wing of the Republican party, while Henderson would’ve been considered a progressive Democrat.
The two commissioners held similar views on the convention center project, however. With the chairmanship shifting to Shellenberger, the majority of the Lancaster County Board of Commissioners now looked at the project with decidedly more critical and skeptical eyes.
Prior to the March 15th TIF vote, it was apparent Shellenberger and Henderson were going to examine a variety of concerns regarding the project, including the $40 million county bond guaranty, the hotel room tax, and other issues related to the project. A possible lawsuit challenging Act 23 funding was also publicly discussed by the two Commissioners.
By late spring of 2005, the project was far from complete. Not a shovel of dirt had been turned, funding was not secured, architectural designs were not finished, and the public was demonstrably becoming more impatient and resistant to the project. It was a project with a very uncertain future.
Then, as the weather warmed into summer, the sponsors were presented with an opportunity that they seized. It came, oddly, in the form of the sale of a 200 year-old, county-owned nursing home called Conestoga View.
Prior to the summer of 2005, if the Conestoga View nursing home was mentioned at all in any of the three Lancaster newspapers, it was in the obituary section. By the end of the year, Conestoga View made the front pages, the editorial pages, and letters-to-the editor pages almost every day of the week.
The facts around the sale of Conestoga View began in the summer of 2003.
The idea to sell the facility came from Commissioner Pete Shaub. Shaub discussed his thought with Lancaster County Solicitor, John Espenshade. At the time, Espenshade and his firm, Stevens & Lee simultaneously represented Lancaster County, the LCCCA, and High Industries. Espenshade had been Lancaster County’s solicitor for more than a decade.
In 2003, Shaub and Shellenberger, despite differences in temperament, often campaigned as a team. In September, when Shaub spoke to Shellenberger about the possible sale of Conestoga View, Shellenberger agreed with Shaub that the county should sell the facility. Both believed that selling Conestoga View was consistent with their interest in shrinking government, a standard part of the Republican platform which was particularly in vogue during the early years of the George W. Bush administration.
“Conestoga View was losing money, and we felt this was the kind of thing that government should not be doing,” said Shellenberger after he left office. “This was the philosophy I campaigned on. Anything the private sector can do, the government should not be competing in and doing.”
Since Shaub was the only sitting commissioner during these pre-election meetings with Shellenberger and Espenshade, they were not in violation of the state’s open meetings, or ‘Sunshine Law,’ requirements.
After taking office in January, 2004, Shaub and Shellenberger, along with solicitor Espenshade, continued to pursue selling Conestoga View to Complete Healthcare Resources, the private company that had operated the facility for more than a decade.
But now that Shellenberger was in office, meeting with Shaub privately to discuss potential official action meant possibly violating the Sunshine Law.
The two Commissioners, Shaub and Shellenberger, according to a later grand jury investigation into the sale, deliberately and carefully kept newly-elected Commissioner Henderson ‘out of the loop’ and completely ignorant of these ongoing negotiations.
Shellenberger and Shaub were able to circumvent the Sunshine Law restrictions by either meeting with Espenshade individually, or by using a common practice known as “walking the halls.”
‘Walking the halls’ describes a practice where a surrogate of one official, in this case a County Commissioner, meets with another Commissioner. Then the surrogate ‘walks the halls’ back to the other commissioner’s office and briefs him. This goes back and forth, and it is done frequently as a practical way of not awaiting a public meeting in order to discuss matters between quorums of Commissioners. (Two of the three commissioners constituted a quorum on the commissioners’ board.)
The person walking the halls on behalf of then-board Chairman Shaub was County Administrative Officer, Don Elliot, (who happened to use Penn Square Partners’ President, Nevin Cooley, as a professional reference on his application to the county.)
The person walking the halls as Shellenberger’s representative was an administrator with a newly created position of Chief Services Officer (CSO) named Gary Heinke.
Gary Heinke and Dick Shellenberger were close personal friends. For several years, they shared many Bible studies, and regularly socialized together. Sometime in 2001, Heinke moved with his family to Minnesota.
After Shellenberger won the Republican endorsement in February, 2003, he contacted Heinke and asked his friend if he would be interested in returning to Lancaster to work as the Chief Services Officer for the county after Shellenberger took office.
Heinke was interested, and Shellenberger, Shaub, and Espenshade all helped Heinke get the job. The three sent Heinke material and job-related questions in advance of the formal interview for the position.
Shaub, Shellenberger, and Espenshade also had several meetings with Heinke, none of which the other candidates for the position received. (Elliot was the only candidate to receive advance material for the Chief Administrative Officer post.)
Neither Commissioner Henderson nor the county human resources department were aware of the preferential treatment afforded Heinke and County Administrative Officer Don Elliot.
With unanimous commissioners’ approval, Heinke was hired as Chief Services Officer. He began work on March 29, 2004. Weeks later, his job responsibility was expanded to include supervising five new departments, and overseeing Conestoga View.
During 2004, as sale negotiations continued between Shaub, Shellenberger, Espenshade, and Complete HealthCare Resources, the relationship between Shaub and Shellenberger deteriorated drastically.
The high-strung, combustible Shaub, who in his previous term often clashed with fellow Republican Paul Thibault, now frequently, and publicly, lashed out at Shellenberger and Henderson.
When Shellenberger took over as chairman, it pushed Shaub to an even angrier, less predictable place.
The animosity between Shaub and Commissioners Shellenberger and Henderson was intensified by their present positions on the convention center project.
While Shellenberger and Henderson were increasingly dubious about the project and demanding answers from sponsors, Shaub, after initially questioning the pace of the project, remained a staunch supporter of it.
The deal Shaub, Shellenberger, and Espenshade were secretly hammering out with Complete Healthcare Resources had the county selling Conestoga View and its grounds for a total of $13.5 million – $8.5 million for the buildings, the balance for compensation and assurances that no job cuts would be made and no indigent patients denied care. The facility had a long history of caring for the elderly poor.
The county morgue and a youth intervention facility, which also occupied the Conestoga View grounds, would remain, according to the agreement.
On July 6, 2005, at a regular Commissioners’ meeting, in a 3-0 vote, the Commissioners’ voted to enter into an agreement to sell Conestoga View to Complete HealthCare Resources. This resolution was an official action that indicated the County of Lancaster was intending on finalizing the sale at a later date.
The first reaction to the now-pending sale in the Lancaster Newspapers appeared on July 10, 2005, in the “Coffee with Clyde” column, written by then-Sunday News editor, Dave Hennigan.
The “Clyde” columns were usually cornball collections of observations and homilies put forth by Hennigan’s alter ego, the titular Clyde.
But the column published on that Sunday in July had a decided edge to it. Perhaps there was a voice other than Hennigan’s whispering in ‘Clyde’s’ ear.
“July 10, 2005
Coffee With Clyde
Good morning, Clyde. What’s going on?
“The county commissioners played a little ‘full steam ahead’ on Wednesday,” my jogging friend said, sipping his coffee.
Indeed, Clyde. What do you mean?
“They approved the sale of Conestoga View in record time, Mr. Editor. It took the commissioners only six days from when it became public to unload a piece of Lancaster.”
What’s the point, Clyde?
“What’s the rush, Mr. Editor? They pulled this stunt over a holiday weekend, when few people could react, and when a couple did complain, they ignored their request to postpone the vote…”
The harshest and most outspoken critic of the Conestoga View sale was former Lancaster mayor, Art Morris. Morris, the former track star often seen jogging about town, attended every county commissioners’ meeting throughout the summer and fall, angrily opposing the sale. There were many good reasons for opposing the sale on its merits, and Morris was convinced that the transaction was a sell out of the poor and vulnerable.
At the commissioners’ meetings, Morris, crisply clad in a business suit, tall and well-spoken, peered over his glasses, speaking directly to the commissioners, excoriating them for selling the facility.
“There is absolutely no justification for the speed with which you are moving forward on this sale,” Morris told the commissioners at an August 24 commissioners’ meeting, six weeks after they announced the pending, not yet complete, sale.
Morris, who had a regular column in the Sunday News, saw his comments and opinions on the sale frequently included in front page reports in the Lancaster newspapers. His scathing criticisms were reflected, as well, in the editorial and letters-to-the-editor sections.
After the July 6th vote, as if by orchestration, waves of letters to the editor opposing the sale also began to appear in all three papers.
“Last Wednesday, I learned that our county commissioners had been in secret negotiations for many months to sell the Conestoga View Nursing Home,” read one letter printed in the Intelligencer Journal on July 14, 2005.
“I would like to let the public know how the sale of Conestoga View has affected the staff and residents. The staff and residents were informed of the sale the morning before it came out in the evening newspaper. That was a slap in the face,” read another in the Lancaster New Era on August 13, 2005.
These letters were typical, and they were printed by the dozens during those summer months.
A readers “poll” in the Intelligencer Journal showed 96 percent of the self-selected respondents opposed the sale of Conestoga View.
Other prominent local officials and ex-officials – like Sen. Gibson Armstrong, Lancaster city Mayor Charlie Smithgall, former County Commissioner Paul Thibault, – all very publicly opposed the sale.
County Controller (and future County Commissioner) Dennis Stuckey made public his office’s analysis of the sale, concluding that Conestoga View was not losing money, as the current board claimed, but rather was operating at a cash flow profit.
“We think there was some faulty logic coming up with the [Commissioners’] numbers,” Stuckey told the New Era. “It’s operationally sound at this point.”
At one summer commissioners’ meeting, Paul Thibault, told his successors, “There are holes in this agreement you could drive a truck through.”
With characteristic delicacy, Lancaster Mayor Charlie Smithgall told the Commissioners they shouldn’t sell Conestoga View. “This is the last and only place that will take ventilator patients, quads, paraplegics, etc.”
Also in the audience at each county commissioners’ meeting were Smithgall’s 70-something year-old mother-in-law, Jane Albright; Chamber of Commerce President, Tom Baldridge (“We cannot support the sale as presently structured,” said Baldridge.); and Lancaster Township Supervisor, Tony Allen, (who encouraged Shellenberger to release himself “from the evil clutches of Molly Henderson,”).
Several of these people wore white t-shirts with “Save Our Home” printed on them.
These critics of the Commissioners had something else in common apart from opposition to the Conestoga View sale – all, including Morris, were strong, day-one, on-the-record supporters of the convention center project.
Six days before the final vote to close the Conestoga View sale, on September 22, 2005, Senator Gib Armstrong and Lancaster Mayor Charlie Smithgall publicly called for Commissioner Shellenberger’s resignation.
“The guy [Shellenberger] is out of control,” Armstrong was quoted on the front page of the Lancaster New Era, talking about his fellow Calvary Church congregant, Shellenberger.
Mayor Smithgall, in the same New Era article, said: “He should resign. It is time. … The county commissioners – Shellenberger and Molly Henderson – seem bent on killing any forward movement in the city, especially in downtown.”
Two days later, Commissioner Pete Shaub, the original and driving force behind the Conestoga View deal, reversed his position and announced he would not vote to finalize the sale.
“The numbers just don’t add up,” the unpredictable Shaub said, referencing Controller Stuckey’s report.
On September 28, 2005, at a packed Commissioners’ meeting, Shellenberger and Henderson voted to finalize the Conestoga View sale to Complete HealthCare Resources. Shaub, though expressing privately that he wanted the sale to go through, dissented.
If the Lancaster Board of County Commissioners, specifically Shellenberger and Henderson, thought the media firestorm would end after the sale of Conestoga View they were completely mistaken.
The scale and vitriol of the response in Lancaster Newspapers after the vote could not to be anticipated. Letters condemning the sale continued. ‘Clyde’ kept grousing about it each week. In the month after the sale, there were more than 100 separate articles and letters on Conestoga View in the three Lancaster newspapers. All the items were negative except for one – Commissioner Henderson’s published explanation of the sale.
The first Sunday News editorial after the vote, (“A Shameful Deal” on October 2, 2005,) captured the tone of the Lancaster Newspapers’ response:
“Barring a miracle, by the time you read this, Conestoga View will be the property of Complete HealthCare Resources. The sale was to take effect at 12:01 a.m. Saturday.
“We’d hope the Lancaster County commissioners would be ashamed, but they’ve proven themselves a shameless lot.
“They did a sloppy deal in secret to sell the county nursing home, sprang it on the public, then whined that the county would lose millions if the commissioners backed out. …
“…With a gang that not only can’t shoot straight but can’t even shoot themselves in the foot properly, why should we trust that they’ve done the right thing by the people of Lancaster County?”
That was far from the last word on the subject.
Former mayor Art Morris was not letting go of the issue. His approach after the vote seems to have been to try to find an issue, any issue, that would reverse the sale, or cast the Commissioners in a disreputable light.
Morris criticized the Commissioners on the hiring of lawyers; specifics of the deal; and the speed the sale. He followed Conestoga View vans after the sale was complete, reporting they hadn’t changed license plates. He wanted to know why county-issued gas cards were still being used.
And in the days and weeks following the September 28 vote, all three Lancaster newspapers continued to publish articles, some two-and three-thousand words, harshly critical of “the commissioners.” Most ran with photographs of all three commissioners, and all included the scathing remarks of Art Morris, who refused to let the story go.
But the fact was that the sale of Conestoga View was perfectly legal. State law did not require, by specific exemption, the county to put the property out for bid. Multiple appraisals were required by the County Code before it was sold. The county got multiple appraisals.
In late October 2005, four weeks after the final sale of Conestoga View, Art Morris finally got his wish. His ‘throw-everything-against-the-wall-and something-will-stick’ approach yielded a direct hit: Gary Heinke.
Gary Heinke, Shellenberger’s friend hired in 2004, was first mentioned as a target of investigation on October 24, 2005.
In a New Era article, “Who is Gary Heinke?”, questions were raised by Morris about Heinke’s background and credentials listed on his resume.
On that same day, the Commissioners announced they were ordering an investigation into Heinke’s hiring. The head of the county’s human resources department, Thomas Myers, was to lead the investigation.
The next day, October 25, Heinke told the Commissioners the information on his resume was accurate.
An article published on that date, October 25th, by the afternoon New Era, “A Question of Credentials,” uncovered several glaring misrepresentations on Heinke’s resume.
It was also revealed that Gary Heinke not only received advice from Shellenberger, Shaub, and solicitor John Espenshade prior to his hiring, but he also substantially lied about his work experience and educational credentials on his resume.
On October 28, 2005, Gary Heinke resigned as Chief Services Officer.
On November 10, the day the Myers Report was to be released, Lancaster County District Attorney Donald Totaro announced that his office was launching a grand jury investigation into the Heinke hiring.
It was only the third grand jury impaneled in the history of Lancaster County. The other two were murder cases.
After announcing the grand jury investigation, Totaro blanketed the fifth floor of the County Courthouse, which held the Commissioners’ and other county offices, with more than 80 subpoenas, including handing them to all three Lancaster County Commissioners.
Totaro launched the investigation before reading the Myers report. The Myers report concluded that Heinke falsified his resume, but not his county application for employment.
It didn’t seem to matter what the Myers report said; Totaro was going to use Heinke’s hiring to investigate the Lancaster County Commissioners.
“I hope [the District Attorney] expands the investigation to include all aspects of the Conestoga View sale,” said a pleased Art Morris after Totaro’s announcement.
Again, Art Morris would have his wish granted.