The rejection by the Lancaster School Board of Penn Square Partners’ TIF proposal was understandably disappointing to project sponsors. They were used to getting what they asked for from governmental bodies. And while the funereal words they chose after the vote were, at best, disingenuous, no one could argue the sponsors didn’t have a reason to be upset.
The defeat of the TIF plan, at least in this one instance, showed that the entire local establishment did not bow obediently to the demands of the private partners. The school board said ‘No’ to Penn Square Partners; and Dale High, and Jack Buckwalter, and Charlie Smithgall, and Gib Armstrong, and Mike Sturla et al were not used to anyone saying that to them, especially concerning their beloved project.
There would be harsh retribution for the insolence.
The Sunday News, like the two dailies owned by Lancaster Newspapers, was undisguised in its contempt for the school board after the March 15th vote.
On Easter Sunday, nearly two weeks after the TIF vote, as the sponsors were being quoted in all the Lancaster newspapers saying the project was “dead,” the still fuming Sunday News ran an editorial, “In the dark,” which began:
“Ironic, isn’t it, that during ‘Sunshine Week’ the School District of Lancaster board once again ran afoul of Pennsylvania’s open meetings law?
“It was more than a slap in the face to the public’s right to know, during a week set aside by national newspaper editors to raise awareness of that right, that board members and their solicitor were again making an end run around the Sunshine Act with a vote on Penn Square Partners’ request for a tax increment financing district for the proposed downtown hotel.
“Obviously, we think the board made a mistake in failing to approve the TIF district. We had been hopeful that a new deal negotiated by state Sen. Gib E. Armstrong and Rep. Mike Sturla would get a better reception, although the whole TIF deal may be dead now.
“But the company that publishes the Sunday News, Lancaster Newspapers Inc., is a limited partner in Penn Square Partners. So saying we’re disappointed in the board’s vote won’t exactly shock anyone.
“We are offended, though, by the orchestration of that vote in contradiction of the Sunshine Act.”
Members of the school board personally felt the sting of the sponsor Lancaster Newspapers.
“Some very venomous things have been said about this board,” said SDL president, Patrice Dixon, who was lobbied heavily leading up to the vote. Dixon voted ‘no’ on the PSP proposal.
“It was vengeful,” said former school board member, Mike Winterstein. “It really felt like we crossed the line with the ‘Mennonite Mafia.’ They were out to get us. We better watch out.”
If the sponsors’ reaction to the school board was severe, then the punishment that would be meted out to two of the three sitting Lancaster County Commissioners was absolutely brutal in comparison.
The sponsors of the hotel and convention center project had sound justification to be extremely concerned about the current board of Lancaster County Commissioners. During the campaign of 2003, all of the commissioner candidates, including the formidable Constitution Party Candidate, Jim Clymer, opposed the 2003 $40 million county bond guaranty.
Now, in early January, 2005, with Republican Dick Shellenberger replacing erratic and volatile Pete Shaub as chairman (Shaub remained on the board), the Commissioners were faced with the TIF issue.
Before the SDL vote on the TIF, Shellenberger and Democrat Molly Henderson had submitted “57 Questions” to Penn Square Partners, LCCCA, and RACL. The questions concerned the TIF and many other areas of financing and feasibility of the project, including potential tax payer risk, and the legality of the tax itself. The Commissioners were demanding answers to very difficult questions.
The unwillingness of Penn Square Partners to respond to the Commissioners’ questions raised serious concerns in Shellenberger and Henderson.
Shellenberger and Henderson were now looking at all aspects of the project. They, along with special counsel Howard Kelin, were examining the county guaranty, the tax itself, and the area of the tax. This was likely viewed as a serious threat to the project sponsors.
Furthermore, according to terms of the TIF the County, though it would receive the smallest slice of the property tax revenue from the project, had the authority to order an assessment of the former Watt & Shand property, including whether it was taxable, through the county’s assessor’s office.
Most critically, in September 2007, before the end of their terms, the county would name the pivotal ‘swing’ vote to the Lancaster County Convention Center Authority board of directors.
The last was a major concern of the sponsors.
Shellenberger and Henderson were a political odd couple. Shellenberger was from the most conservative wing of a conservative Lancaster County Republican Party. Raised in the Mennonite Church in Lancaster County, Shellenberger is a former farmer and restaurant owner, whose vivacious wife, Pam, had been a key member of the ‘kitchen cabinet’ of U.S. Representative Joe Pitts, another right-of-center Republican.
Henderson, the former head of Public Health for the city of Lancaster under Republican Smithgall, would be considered a ‘progressive’ Democrat. She was a strong supporter of Hillary Clinton’s Presidential bid. Henderson’s husband, Alex, is a powerful Lancaster attorney. (A former managing partner [currently senior partner] at a top-tier Lancaster law firm, Alex Henderson, a Republican committeeman, also chairs the executive board of directors of Lancaster General Hospital, as well as the Lancaster Area Sewer Authority.)
Coming from opposite ends of the political spectrum, Shellenberger and Henderson came to believe that the convention center project was poorly conceived, executed for benefit of lawyers and consultants, and designed to be dependent on endless taxpayer subsidization.
Both Commissioners were deeply concerned by the rising cost and expanding scope of the project, and the rubber-stamp spending of the LCCCA board, especially as it became apparent that no independent feasibility study had been performed, contrary to the promoters’ claims.
On the issue of the convention center, Chairman Shellenberger split party ranks with Shaub (a rarity in GOP dominated Lancaster County), as well as the City’s Republican Mayor Smithgall and powerful State Senator Armstrong.
Henderson broke party ranks on the convention center with the only elected Democratic State Representative from Lancaster County, Mike Sturla. Sturla and Armstrong were close allies on the convention center project.
Shellenberger and Henderson started taking measures at the county level to see that the project was not railroaded without check.
“I had to understand how it was going to affect the taxpayers,” said Shellenberger. “And until I got answers to those questions – and I wanted public input, too – I wasn’t going to just vote for it because they [the sponsors] wanted me to.”
Perhaps the first shots in what would become a multi-year battle by the Lancaster Newspapers against Shellenberger and Henderson were targeted primarily at Commissioner Henderson. On the 23rd of March, 2005, on the front page of the Intelligencer Journal was an article, “Shaub attacks Henderson over center: Accuses her of sabotage,” which begins:
“Lancaster County Commissioner Pete Shaub on Tuesday accused fellow Commissioner Molly Henderson of ’sabotage’ in ‘trying to kill’ the downtown convention center/hotel project.
“‘Commissioner Henderson has repeatedly put up roadblocks to try to kill this project,’ Shaub said. ‘As soon as she heard that (state) Sen. (Gibson E.) Armstrong and (state) Rep. (Mike) Sturla are having an opportunity to form a compromise and let this city accomplish its vision, she wants to kill the project.’”
The second shot appeared on April 3rd, one week after the ‘miraculous’ resurrection of the project. In another lengthy front page story, the Sunday News (“Good Golly, Molly: Henderson’s questions on downtown project rile her friends in both parties”) takes direct aim at the two commissioners who were raising questions about the project.
“In a convoluted saga that has been full of strange twists, the weird factor is off the charts in seeing Henderson and Republican Dick Shellenberger as the last remaining roadblocks to the convention center, while Shaub is its fiercest defender.”
This was just the beginning of the undeclared (but very real) war of words by Lancaster Newspapers against Shellenberger and Henderson. The fallout from the Commissioners’ alliance on the convention center issue was swift and not to be anticipated, and literally defines a period of Lancaster County history.