CC looming crisis: The hypocrisy of the sponsors

It is with a sense of déjà vu that we read the breathless and alarmist early paragraphs of the Lancaster Sunday News report Convention center gets deadline extension on debt”:

The Lancaster County Convention Center is living on borrowed time.”

“A consultant sounded the alarm a year ago that the nearly 4-year-old center could be forced to close if revenues were not significantly increased or financing fees cut.”

This is a familiar pattern since the inception of the project whereby the Lancaster Newspapers warns that the ‘sky will fall’ unless the public opens its purse to benefit  the various sponsors, when each one shares responsibility for what went wrong.

Meanwhile the county commissioners, whose predecessors had vigorously opposed the project, are struggling to salvage the ‘white elephant’ and are under attack from the very parties they are endeavoring to help!

Does Commissioner Chairman Scott Martin rue he ever volunteered a proposal?   His reward may be the end of a promising political career that seemed headed directly to Congress and from there who knows where else.

The article warns:

Martin’s original proposal, released in August, calls for an additional $100,000 annual contribution from the city or a guarantee of center debt. It also calls for PSP to increase the food and beverage royalties it pays the center authority from 5 to 12 percent.  If that additional revenue is part of the negotiations, that could prove problematic.”

The City, which indirectly owns and has guaranteed the debt for the Marriott Hotel, is on the hook for over $30 million dollars in bond guarantees if the Convention Center closes and the Marriott goes the way of the Brunswick for lack of downtown business.

The Lancaster Newspapers and the S. Dale High interests should be doing many times more to redress one or the other’s misrepresentations over the decades and their Penn Square Partner’s  one-sided contract with the LCCCA.

Having already exploited the hotel industry with which the Marriott competes, having displaced convention business from the Rt. 30 East corridor, and having  produced nil added room revenue with the project,  Penn Square Partners and the City now seek a still a further increase in the Hotel Room Rental and Excise  Tax of 5%:

The article reports:  “The increase would add $1 to the cost of the average hotel room rental in the county, [Mayor Rick] Gray said. That wouldn’t turn anyone away, he believes”

Gray is either benighted or doesn’t want to recognize that almost each dollar in tax actually comes out of the bottom line of the hotel operators, driving down the value of their investments and depriving them of needed funds for renovation in order to remain competitive with other areas.   It is a case of still more taxes ‘killing the goose that lays the golden egg.’

Concerning the Tourist Bureau, first they said they backed the Martin Plan, now they say they aren’t sure.  They are in a tight spot.

Right now the Commissioners have guaranteed half of the Convention Center debt, with annual limitations.  Let Martin obtain far greater concessions from Penn Square Partners and the City, and then make a deal with Wells-Fargo for significantly lower interest and fees in exchange for the County guaranteeing the full Convention Center debt.  That would be a win-win outcome for all the parties.  Given the dismal alternatives, even for the tax payers.

We add a caveat at this time.  As part of any such settlement, the City should agree to allow the County to  permanently appoint five of the nine LCCCA board members.  If the County is to be  liable for all of the Convention Center debt, it should be able to choose the majority.

The Commissioners had better get greater concessions from the City, Penn Square Partners and Wells-Fargo now because they may not have another good opportunity in the future.

 

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Updated: February 11, 2013 — 9:46 am
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