“PENN SQUARE COMPLEX IS HAILED AS ‘EVERYTHING THE CITY NEEDS’
STRONG PRAISE FROM CROWD OF NEARLY 300″
– Lancaster New Era, front page, banner headline, August 26, 1999, two weeks before County Commissioners vote on room tax to fund “complex”
After the Stadium Bill became law, in February 1999, Lancaster Newspapers’ role in the convention center and hotel project started to seep into its reporting, and bias began to show.
Dale High, Chairman and President of High Industries, had always enjoyed positive coverage from all three major Lancaster Newspapers. But now, as a Penn Square Partner, the items written about him during the year 1999 started to read more like press releases from High’s personal public relations firm rather than credible newspaper reports.
The flavor of the aggrandizement is suggested from some of the Lancaster Newspapers’ headlines from 1999:
“PA. CHAMBER NAMES HIGH TOP BUSINESS LEADER OF ‘99″ (Lancaster New Era);
“DALE HIGH HONORED AS TOP ENTREPRENEUR OF ‘99″ (Intelligencer Journal)
“LOCAL BUSINESSMAN IS TOPS AMONG U.S. ENTREPRENEURS” (Lancaster New Era)
“THE NEW ERA RED ROSE IS PRESENTED TO S. DALE HIGH” (Lancaster New Era)
A typically fawning profile of Dale High, “The High Road,” was found in the Sunday News, September 26, 1999. It begins:
“Inside the office building, prominent business executive S. Dale High sits scanning papers on a table.
“Outside, a flock of Canada geese glides prettily past High’s picture window. ‘The whole squadron,’ High remarks later as he walks outdoors to the lush park that he incorporated into the Greenfield Corporate Center.
“The sturdy office complex at his back symbolizes the vibrant Lancaster County he would like to preserve for his three children, two stepchildren and eight grandchildren. …”
The convention center and hotel project presented an ethical dilemma for Lancaster Newspapers. The 100 year old company was a major partner in what would become one of the largest capital projects in the region’s history. Given the vested economic interest of Lancaster Newspapers both as a neighbor to the project for across Queen Street and as a partner in the proposed hotel, and the multi-millions of taxpayers’ dollars involved, public questioning of the impartiality of LNP seems inevitable.
One might have thought that the top editors at LNP would have strained to soothe those concerns by vigorously investigating the project’s viability, or perhaps even hiring an outside ombudsman to review potential conflicts of ethics and professional standards.
This did not happen.
By 1999, judging by the editorial content of all three papers, evidence suggests they had decided to take a proactive role in promoting it.
There are several specific examples in 1999 of biased coverage. Here are some of them:
In addition to the over-the-top headlines (“Everything the City Needs” is one of many), there were full-color, front page, artist’s renderings of the proposed project. These lovely, airbrushed images, with smiling citizens under blue skies, were splayed on the front pages of Lancaster Newspapers before the room tax was passed. These illustrations were equivalent to front-page advertisements for the project.
The reporting was unacceptably weak. For example, many of the organizations said to be supporting the project, like the Lancaster Alliance, Lancaster Campaign, Chamber of Commerce, Downtown Investment District, Economic Development Company of Lancaster, in fact were joined by the same board members, and many of those were tied to sponsors of the project or sponsors themselves.
High; Fulton; Buckwalter were principals in the project and sat on the boards of directors of several of these organizations. Other board members were indirectly linked to the sponsors, like John O. Shirk, a partner at the Barley Snyder law firm, the principal solicitor used by Lancaster Newspapers. Those connections merited mention, but there was nothing from LNP on this.
Lancaster Newspapers, at minimum, should have disclosed the extent of its ownership interest in the project from the outset of its involvement. It was not until a court case in 2006 that LNP finally revealed its stake in the project (44% then; 50% today). The company’s downtown real estate, property values which would be affected by the project, should also have been fully disclosed. They were not.
There was virtually no journalistic due-diligence in reporting on the studies commissioned by the Lancaster Campaign, funded by the Lancaster Alliance, twenty-five percent of whose founding members made up Penn Square Partners.
The terms “feasibility study”, and “four-star hotel” were never properly defined on the pages of Lancaster Newspapers. In fact, LNP reporters, and sponsors of the project, repeatedly referred to all the market studies at some point as “feasibility” studies although they were only market studies. Negative input was downplayed or ignored. This created an inaccurate picture of what the studies actually were and their concerns.
Perhaps the most egregious early example of Lancaster Newspapers’ bias was its handling of the Ernst & Young market report on the project.
In February, 1999, the Lancaster Campaign commissioned the international consulting giant, Ernst & Young, to undertake a market study of the project. The cost of the study: $60,000. The Ernst & Young “Market Study, Cash Flow Estimates, and Economic Impact Analysis,” released to the Campaign in July of 1999, was treated as the justification of the project.
The first striking thing about the Ernst & Young study is that it isn’t a feasibility study at all. In the world of real estate appraisal, “Market” and “Feasibility” studies are distinctly different reports. Ernst & Young intentionally called its report a “Market” study because it was not the much more substantial and comprehensive “Feasibility” study, which includes, among projects of profits and losses, a market study. The so called “cash flow estimates” were industry wide, not based on the specific Lancaster project.
To underscore this, Ernst & Young themselves stated in its final Executive Summary:
“It is important to note,” the Executive Summary states, “that this does not take into account the estimated costs associated with the development of each Scenario, the financial feasibility or the anticipated returns”. [Emphasis added.]
The second noteworthy aspect of the Ernst & Young study is the secrecy with which the report was released. Unlike the Winterbottom study of the year before, which held several public meetings that included organizations and everyday citizens, the methodology of the Ernst & Young report was limited primarily to discussions with certain government officials, and a few carefully selected representatives from the hospitality industry. The community and some government officials were conspicuously left out of the process.
A reading of the report suggests why it was kept secret. While Ernst & Young conclude that a 61,000 square foot convention center and a 281-room adjoining hotel is the “most appropriate” of the four “scenarios” it analyzed, the report was far from conclusive in recommending going ahead the center and hotel project.
Moreover, the Ernst & Young study lists 23 “Critical Success Factors” for the project. The report names only three “Competitive Strengths” for the Lancaster project (costs to attendees; event costs; road access from major feeder markets).
There were a total of seven “Competitive Weaknesses,” (air access; cultural and entertainment attractions; population; industry concentration; historical demand for lodging/meeting facilities; market image; other quality of life issues.) It seems Ernst & Young thought Lancaster had more going against it than for it.
But one wouldn’t know that from reading Lancaster Newspapers. The articles published by LNP on the Ernst & Young read as if its reporters and editors had not seen the study.
Additionally, there was no pressure from LNP to release the Ernst & Young study prior to the Commissioners’ vote in September, 1999. LNP Chairman, Jack Buckwalter, was a founding member of the Alliance, the organization that paid for the report. Buckwalter should have publicly insisted the report be published in all three papers.
Finally, Lancaster Newspapers ought to have reported that Ernst & Young, who was being paid to conduct a market study commissioned, in part, by Dale High, had named High “National Entrepreneur of the Year” and “1999 Master Developer of the Year.” Ernst & Young was hardly an arms-length consultant in this study.
It was also in 1999 that Lancaster Newspapers began to report of opponents of the project derisively. The first charged with trying to “kill” the project were Lancaster County hotel and motel owners.
The news articles depicted Lancaster County citizens who would be hit first and most directly by the tax as litigious whiners, not wronged taxpayers unfairly forced to pay for its competition.
An article published one week after the room tax was passed in the Lancaster New Era, on September 22, 1999, (“F&M President Blasts Hotel Operators”), begins:
“Franklin & Marshall College President Richard Kneedler has lashed out at county hotel and motel operators who may include the college’s Alumni Sports and Fitness Center in a legal challenge they’re considering against a planned downtown convention center.
“In a letter to members of the Lancaster Hotel & Motel Association, Kneedler made it clear that the college and its trustees are “strong supporters” of plans to build a $30 million convention center just south of Penn Square.
“’This is of major importance to the City of Lancaster and the County of Lancaster,’ Kneedler said of the convention center and an adjacent $45 million hotel planned for the former Watt & Shand building. ‘For a few hotel managers to try to block or stalemate this project is very unfortunate.’”
Later in the article, Kneedler, after citing the number of hotel rooms the college generates, is quoted in his letter to the hoteliers in what seems a veiled threat:
“Please contact your association and tell it that angry words, false statements, and threats of lawsuits do not further discussion, will never help our community and will only provoke adverse reactions that everyone will regret,” Kneedler wrote.
In the same New Era report, it is written that the Lancaster Republican officials would boycott a county GOP event scheduled for the Lancaster Host Hotel if the Host Hotel joined the threatened lawsuit over the room tax.
Lancaster Newspapers continued the tactic of demonizing those who questioned the project. This approach intensified as more opponents, some quite respected and able, entered the fray over the convention center project.
The Ernst & Young study was completed in July, 1999, and submitted to the Lancaster Campaign on July 19th. For weeks, members of the Greater Lancaster Hotel & Motel Association (GLHMA), had been asking the Campaign’s Chairman, Tom Baldrige, to provide complete copies of the document. Baldrige, after promising the hoteliers they could review it, withdrew his “overpromise” of the full report in early August.
The hoteliers, instead, were given the Executive Summary of the report and, after reading it, immediately issued a sharp rebuke of its findings. In a GLHMA “Resolution 08-99″, dated August 19, 1999, the hoteliers affirmed:
“…based on the information provided to date from the partial Ernst & Young report, the GLHMA is opposed to the proposed Penn Square Conference Center, further, that upon review of such partial report and such limited information, the new business said to utilize such facility cannot be substantiated…”
Rodney Gleiberman, General Manager of the Continental Inn, and a present and past member of GLHMA, says, “When Ernst & Young did its study, they did not speak with one current customer, tour operator, or local lodging operator to gauge what effect the room tax might have,” said Gleiberman. “In my opinion, their conclusions were not only incomplete, but irresponsible, as well.”
Others were interested in seeing the complete Ernst & Young report before the County Commissioners were scheduled to vote on imposing the room tax at their September 15, 1999 board meeting. In a letter to the Lancaster County Commissioners, dated September 07, 1999, Allan Erselius, Executive Director of the Pennsylvania Dutch Convention and Visitors’ Bureau (PDCVB), urges release of the full report:
“The Ernst & Young Feasibility Study [sic] is the basis from which we are to make our decision, yet the full report has been seen by only a select few. We would encourage you to release the full report to our Board of Directors and key hoteliers in order to gain their expertise in developing a well-rounded marketing plan.”
Luis A. Mendoza was Lancaster City Councilman in 1999. He, too, was stonewalled. “I made several requests to [Lancaster Campaign Chairman] Tom Baldrige, asking for a copy of the study,” said Mendoza, a Republican. “I was the only one on Council asking to see it, and I never got to see it before the county voted on the tax, and before we voted on whether to set up the Authority.”
Whether the editors and reporters at the Intelligencer-Journal, Lancaster New Era, or Sunday News themselves read the Ernst & Young study is not clear, but their support of the project and the enabling taxation of Lancaster County business was unequivocal. In an editorial on the day of the vote on the tax, the morning Intell wrote:
“We also believe that the county commissioners should impose a room tax on hotels throughout the county to help pay to build the convention center and to promote tourism in both the city and county.”