By Christian Hart-Nibbrig
The timeline below covers the history of the Lancaster County Convention Center and Marriott Hotel project. The timeline is part of a comprehensive revision and edit of the convention center series originally published by NewsLanc.com. The entire revised series will be published in the coming weeks and months. The series is written with the intent that it will eventually be published in book form.
In the course of the revision, we hope to broaden the work to include the viewpoints of significant participants in the project, particularly the sponsors. The Lancaster Convention Center project — for good or ill — is an important part of Lancaster history. We hope that the time that has passed since the most controversial period of the Convention Center’s history will persuade those participants to lend their perspectives to the series.
Christiaan A. Hart Nibbrig
January 06, 2013
February – 1992
WATT & SHAND SOLD TO BON-TON. The 115 year-old landmark and historic Watt & Shand department store is sold to the York-based Bon-Ton Stores, Inc. Three years later the downtown store is closed.
June – 1993
LANCASTER ALLIANCE FORMED. A dozen powerful local business leaders, including S. Dale High, President and CEO of High Industries; Jack M. Buckwalter, Chairman of the monopoly Lancaster Newspapers; Rufus A. Fulton, Jr., Chairman of Fulton Bank; and nine others of similar stature, start a business and civic organization named the Lancaster Alliance.
In a few years, these three men – ‘Dale,’ ‘Jack,’ and ‘Rufus’ – will form an alliance, but for now they were part of the Lancaster Alliance’s founding board of directors.
This is how the Lancaster New Era reporter (and future editor in chief) Ernie Schreiber begins his front-page report on the formation of the Alliance on June 27, 1993:
“The chief executives of 12 of Lancaster County’s largest corporations have launched a new organization, the Lancaster Alliance, to help improve the economy and social conditions of Lancaster City.”
December – 1994
CONVENTION CENTER ACT PASSED AND SIGNED. The“Pennsylvania Third-Class County Convention Center Authority Act” is passed by the legislature, and signed by Governor Robert Casey on December 27, 1994.
The Act permits local county governments of third-class counties (those with populations between 210,000-500,000) to create “Authorities,” taxpayer-subsidized bodies empowered to build and administer convention centers, and to fund the projects through a hotel and motel room rental tax.
The Convention Center Act was sponsored by house member, Rep. Thomas Caltagirone, a Republican from Berks County. The real authors – the ones who conceived and drafted the bill and the ones who would benefit from its largesse for more than a decade — were attorneys at the law firm of Stevens & Lee, a powerful Reading-based corporation. Dealing in most forms of commercial law, Stevens & Lee is also an influential lobbyist in state government. The firm represented, in 1994, a number of leading corporate interests and was solicitor of record for several local governments, including Pennsylvania counties Berks, Luzerne, and Lancaster.
According to many political observers, the Convention Center Act is later utilized in a trade-off involving a very expensive stadium bill for Philadelphia and Pittsburgh that comes a few years later, one that will be strongly supported by Democrat Casey’s successor, Republican Governor Tom Ridge.
February – 1995
BON-TON/WATT & SHAND CLOSES. The historic Watt & Shand department store building (now housing Bon-Ton) on Penn Square closes its doors forever. Designed by the eminent local architect, C. Emlen Urban, the Watt & Shand anchored downtown retail since 1898. Its towering columns and ornate facade was a distinguished example of the Beaux-Arts style often used by Urban.
The four-story building, with its design, size, and central location, is also a cultural touchstone for generations of Lancastrians. When it closes, combined with the continuing problems with Lancaster Square, many felt the city’s heart had stopped.
The building languishes, unoccupied, for more than two years.
PAUL THIBAULT ELECTED COUNTY COMMISSIONER. Paul R. Thibault is elected Lancaster County Commissioner. Thibault, Connecticut-born, raised in Canada, is not endorsed by the county Republican party. He does have the endorsement and substantial financial backing of the Lancaster Alliance. Thibault becomes chairman of commissioners’ board upon taking office. Also elected with Thibault are fellow Republican, Terry Kauffman, and Democrat, Ron Ford.
July – 1996
HACC WANTS TO BUY WATT & SHAND BUILDING. Harrisburg Area Community College (HACC) trustees vote to purchase the Watt & Shand building. HACC counts on more than $8 million in state funding. The HACC plans call for razing slightly over 25 percent of the total space to make room for 90 parking spaces, an unloading area outside a day care center, and an outdoor play area. The college plans to move from its campus at Burle Industries to the downtown site in the fall of 1998, using 75,000 square feet, with long-term plans to double that usage.
The Watt & Shand facade would be preserved according to the HACC plan. Lancaster Mayor, Janice Stork, works on behalf of HACC to secure the deal.
LANCASTER CAMPAIGN FORMS. The Lancaster Alliance funds and provides advisory services to a subsidiary organization, the Lancaster Campaign. Lancaster Campaign has a small paid staff to implement its vision for the city revitalization and development. Tom Baldridge is hired by the Alliance as the executive director of Lancaster Campaign.
July – 1997
WINTERBOTTOM STUDY COMMISSIONED. The Lancaster Campaign commissions a study about how to revitalize the city. They hire LDR International Corp., a renowned urban planning firm based in Columbia, Maryland.
In an excited July 1, 1997, front page Lancaster New Era article (”Design doctor hired to revive city”), Bernard Harris and Steve Tranpnell writes:
“The doctor is in.
The Lancaster Campaign hired urban designer Bert Winterbottom today to create a diagnosis and prescription for revitalizing Lancaster. Like any doctor, he plans to ask the patient about symptoms and future needs. He will interview government and business leaders and hold forums where everyone – city and county residents – can offer their ideas.”
Winterbottom and his staff take several months to perform research. They hold multiple public meetings, conduct polls and surveys, and come up with a well publicized report, released in February of 1998.
August – 1997
STATE REJECTS HACC PLAN. The state education department rejects the college’s six million dollar funding request. There are also public objections to the college taking over the building. Some maintain that parking would be problematic. Some note that HACC would be exempt from real estate tax, depriving the City and the School District of Lancaster of needed revenue. Perhaps some did not relish attracting minorities to the downtown areas, especially in the evenings.
Among those strongly raising these objections to the HACC plan are Arthur E. “Art” Morris, former two-term Republican mayor (and later chairman and acting executive director of the Lancaster County Convention Center Authority board), and Republican mayoral candidate Charlie Smithgall, a colorful, local pharmacist.
November – 1997
CHARLIE SMITHGALL ELECTED MAYOR OF LANCASTER. Smithgall, the bellicose, gun dealer, Lancaster pharmicist, has never held elected office.
MAYOR CHARLIE SMITHGALL TAKES OFFICE, APPOINTS PICKARD SPECIAL ECONOMIC ADVISER. In one of his very first actions as mayor, Charlie Smithgall appoints James O. Pickard as “Economic Development Director.” Pickard’s top priority is finding a private buyer for the vacant Watt & Shand building. Pickard, a successful businessman, part of the local Republican political establishment and a former Pennsylvania state Commerce Secretary, takes no salary for his job.
MAYOR SMITHGALL: CITY WILL BUY WATT & SHAND. Jan. 12: A week after Smithgall’s inauguration, Smithgall adviser, Jim Pickard, announces the city of Lancaster, itself, is negotiating with Bon-Ton to buy the building. Here is how the prospective sale is reported in the Lancaster New Era (”Sale of Bon-Ton to city expected within a week”):
“In what could be a pivotal step in the revitalization of downtown Lancaster, city officials said today they expect to sign an agreement to buy the Bon-Ton department store on Penn Square this week.”
Pickard spoke about the process in selecting a private developer to whom to re-sell the building in the same article: “We want a completely open process,” he said, speaking on behalf of the mayor, adding: “This is the single most important thing we can do in the next four years.”
Mayor Charlie Smithgall publicly states he wants the city to buy the historic Watt & Shand building in order to re-sell it to a local developer, to keep it on the tax rolls, but out of the hands of out-of-town investors.
February – 1998
LDR REPORT (A.K.A., WINTERBOTTOM REPORT) RELEASED TO FANFARE. The Winterbottom Report, as it is called, examines and makes recommendations for the revitalization of three separate sections of the city: Downtown (Lancaster Square & Penn Square); North Prince Street; and South Duke Street.
The report includes a comprehensive plan that addresses such issues as streetscape enhancements, landscaping, lanes and alley rehabilitation, sidewalks, and public park improvement, new lighting, and street furnishings.
Among the proposals coming from the study is the recommendation for a “conference center” to be located downtown, at the site of the Brunswick Hotel in the Lancaster Square section of the city. “With upgrading of the [Brunswick] hotel,” writes Winterbottom on page 52 of the report, “there is the opportunity to create a small, state-of-the-art conference center and additional hotel space.”
This is apparently the moment when a downtown Lancaster convention center (still called a “conference” center) is conceived.
Winterbottom’s cost estimate for his “state-of-the art-conference center” is $6-$7 million! Winterbottom dies before seeing the completed project, a project will mutate into a $186 million-plus Convention Center/ Hotel for downtown Lancaster.
There are a curious few paragraphs regarding the vacant Watt & Shand building in Winterbottom’s report. This is what is written on page 55:
“The Watt and Shand Building at Penn Square is the heart and soul of Downtown, Lancaster City, and the County. It is already a special place and one of great beauty, charm, interest and vitality. The challenge is to further reinforce this special place and to bring about the meaningful redevelopment of the Watt and Shand Building.”
Winterbottom goes on:
“As this report is being written, the ownership of the Watt and Shand Building is being transferred from the current out-of-town owners to a small local group of owners at a fair price. [emphasis added] … Local private and public leadership must be prepared to support this project with their influence and their financial resources. This will not be an easy project. . . . While outright sale and development of the property is most desirable, the owners and the community must also be prepared to consider a variety of partnership arrangements that may involve other local investors, the City, the County and the State.“ [emphasis added]
It seemed that old Bert Winterbottom knew something before many in the community. Winterbottom died shortly after his report was released.
PENN SQUARE PARTNERS FORMED. The powerful triumvirate of S. Dale High, Jack Buckwalter, and Rufus Fulton form a business partnership called “Penn Square Partners.” All three, respectively, are the Presidents and CEOs of the county’s largest industrial business, High Industries; its monopoly publisher, Lancaster Newspapers, Inc.; and richest local bank, Fulton Financial Corp.
High Real Estate, a subsidiary of High Industries, is the designated “General Partner” of “Penn Square General Corp.” – the legal name of the partnership. Lancaster Newspapers, Inc. and Fulton Financial Corp. are limited partners, with Fulton taking a smaller investment share.
PENN SQUARE PARTNERS BUYS WATT & SHAND BUILDING. February 17. Bon-Ton sells the downtown historic structure, known as the Watt & Shand building, directly to Penn Square Partners for $1.25 million.
“’We’re looking at all the options,’ says S. Dale High, president and CEO of High Industries Inc., parent company of the real estate group.‘We see it as a mixed-use building.’
Downtown merchants and others have suggested a variety of museums, giant-screen and foreign film theaters, heritage-oriented shops, a visitor’s center and restaurants.
High says his organization intends to carry out a full market analysis to find the right combination of uses that will succeed in the building.
‘We’re not going to rush and do something shortsighted,’ High says. ‘We want something with long-term value for the community.’”
PINNACLE MARKET STUDY COMPLETED. The Pinnacle study, also commissioned by the Lancaster Campaign, recommends the Lancaster Square location for the center. Lancaster Newspapers fails to push for release of that study. The results are never released.
WINTERBOTTOM PRESENTS STUDY TO PUBLIC. February 19. Two days after it was announced that Penn Square Partners purchased the Watt & Shand Building, a public presentation of Lancaster Campaign’s vision for downtown is held at the Armstrong World Industries headquarters on Liberty Street in Lancaster. The auditorium is reportedly filled with “hundreds of people,” according to the Intelligencer Journal.
At the meeting, Bert Winterbottom speaks: “If the renovation to the Brunswick is significant,” he was quoted in the Intellarticle, “and if you can create that conference center, I predict that within five or six years you’ll have a second hotel.”
December – 1998
PENNSYLVANIA STADIUM BILL PASSES. The stadium initiative, passed in a lame duck, post-election session at the end of 1998, proposes to spend $600 million public dollars to build four new sports stadia: two in Pittsburgh; two in Philadelphia. The incentive for legislators outside of those specific counties and their immediate suburbs to fund this bill is that they will receive economic development grants that would flow to projects in their communities throughout the state. One such project is the Lancaster ‘conference center.’
February – 1999
STADIUM BILL SIGNED. Governor Tom Ridge signs the Stadium Bill in the first days of February, 1999—adding more than half a billion dollars to the Pennsylvania state capital budget. Lancaster County is virtually promised a $15 million check to build a downtown convention center.
“I figure, if we get that $15 million egg, somebody will sit on it,” Mayor Charlie Smithgall says to the Lancaster New Era.
In order to receive the $15 million from the state for construction of the convention center, the county had to match, dollar-for-dollar, the Commonwealth grant.
PHYSICAL LOCATION OF SITE CHANGES FROM LANCASTER SQUARE TO PENN SQUARE. After Ridge signs the Stadium bill, in February, 1999, the only site discussed publicly is the Penn Square location of the former Watt & Shand building, across King Street from the Fulton Bank and Queen Street from the Lancaster Newspapers’ office buildings. No public explanation is given at the time for the switch.
“We were the prime location [for a convention center];” the Brunswick’s marketing manager says to the New Era after the switch, “for whatever reason the winds had shifted to Penn Square.”
Years later, in 2009, Smithgall said of the move:
“I tried so many times to speak to the [Philadelphia-based corporate] owners of the Brunswick,” said Smithgall later. “I tried to call them directly and I told their guy here, [G&F Management executive, Daniel] Logan that I was trying to reach the owners, and no one called me back. Finally, it was time to move on.”
COST OF CONVENTION CENTER CHANGES DRASTICALLY WITH MOVE TO PENN SQUARE. Winterbottom’s estimate was $6-7 million for a center located at the Brunswick site. Now, the cost grows five times, to $30 million for the center, plus another $45 million for the “Four-Star,” “Luxury” hotel that would now be built by Penn Square Partners.
HOTEL ROOM TAX PUBLICLY DISCUSSED FOR FIRST TIME. The Third-Class County Convention Center Act of 1994 allows for an up-to 5% hotel room tax to be levied on all hotels and motels in a third-class county like Lancaster.
“I wouldn’t be interested in doing this [implementing a hotel room tax] unless I had the support of the affected community—the hotel people,” Rep. John Barley says to the Lancaster New Era.
Sen.Armstrong echoes his colleague. “The hoteliers have to support it,” says the senator.
Republican County Commissioner, Terry L. Kauffman, seems to be reading from the same memo: “It can’t compete with existing businesses. It has to help them,” Kauffman says to the New Era.
The problem was that the “existing businesses” — Lancaster County’s hotel and motel owners — didn’t think the convention center and hotel project would help them at all.
Rodney Gleiberman, general manager of the 165-room Continental Inn on Lincoln Highway East in suburban Lancaster, near the popular outlet malls and the Dutch Wonderland amusement park, says:
“If I felt that this project offered any upside to my business, I would support it. The reality is that this hospitality project has zero un-interested support from within the local hospitality industry, as it is not grounded in a complete and thorough feasibility study, any reasonable anecdotal nationwide track record, or the slightest bit of common sense.”
ERNST & YOUNG COMMISSIONED TO CONDUCT STUDY ON CENTER. The Lancaster Campaign commissions international consulting giant, Ernst & Young, to undertake a market study of the project. The cost of the study: $60,000.
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 is limited primarily to discussions with certain government officials, and a few carefully selected representatives from the hospitality industry. The general hospitality community and some government officials are conspicuously left out of the process.
July – 1999
ERNST & YOUNG REPORT COMPLETED, WITHHELD FROM PUBLIC.
August – 1999
LANCASTER CAMPAIGN RENEGES ON PROMISE TO RELEASE ERNST & YOUNG STUDY. The Lancaster Campaign, after promising that the Ernst & Young study would be released to members of the Greater Lancaster Hotel & Motel Association (GLHMA) and the Pennsylvania Dutch Convention Visitors Bureau (PDCVB), refuses to release the study.
In a letter to Allan Erselius, Executive Director of the PDCVB, August 12, 1999—four weeks after receiving the completed Ernst & Young report—Lancaster Campaign’s Tom Baldrige rescinded his offer to the hoteliers to release the complete Ernst & Young study.
“At the most recent meeting with hoteliers,” Baldrige writes, “I assured them that they would get copies of the complete Ernst & Young study as a means to further their due diligence on the project. Unfortunately—and with much apology—I have been informed by Ernst & Young that I am not permitted to share the complete report.”
The full report, finished in mid July, 1999, is not released publicly until after the County Commissioners passed the Hotel and Motel Room Sales Tax on September 15.
August – 1999
GLHMA CONDUCTS SURVEY: VOTES ‘NO’ ON CONVENTION CENTER TAX. GLHMA conducts a survey of 58 hotels listed with the county’s Pennsylvania Dutch Convention & Visitors Bureau (PDCVB). Of the 58 establishments, 54 vote against the project, three abstain pending more information. There is only one supporter among the hotels contacted — the Hampton Inn, owned by High Hotels, a subsidiary of High Industries, a partner in the hotel portion of the project.
LANCASTER NEWSPAPERS’ UNCRITICAL, BIASED PROMOTION OF PROJECT BEFORE THE VOTE TO IMPLEMENT HOTEL ROOM TAX. In addition to the over-the-top headlines (““PENN SQUARE COMPLEX IS HAILED AS ‘EVERYTHING THE CITY NEEDS’;” is one of many front-page stories), there are full-color, gorgeous artists’ renderings of the proposed project. These lovely, airbrushed images, with smiling citizens under blue skies, are splayed on the front pages of Lancaster Newspapers before the room tax is voted on. These illustrations are equivalent to front-page advertisements for the project.
There is 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” are never properly defined on the pages of Lancaster Newspapers. In fact, LNP reporters, and sponsors of the project, repeatedly refer to all the market studies at some point as “feasibility”studies, although they are only market studies. This creates an inaccurate picture of what the studies actually are.
September – 1999
VILLIFICATION OF OPPONENTS BY LANCASTER NEWSPAPER COVERAGE. It is also during 1999 that Lancaster Newspapers begins to negatively report on opponents to the project. The first charged with trying to “kill” the project are Lancaster County hotel and motel owners.
An article published one week after the room tax is 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 writes.
In the same New Era report, it is written that the Lancaster Republican officials will boycott a county GOP event scheduled for the Lancaster Host Hotel if the Host Hotel joins the threatened lawsuit over the room tax.
Lancaster Newspapers will continue the tactic of demonizing those who question the project. This approach intensifies as more opponents, some quite respected and able, enter the fray over the convention center project.
September – 1999
HOTELIERS TO COUNTY: WE WILL SUE IF TAX PASSES. September 10. Less than one week before the Lancaster County Board of Commissioners is to vote whether to impose the room tax (and an additional excise tax) on County hotel and motel owners, the Commissioners’ Board is formally notified in writing that such an action violates Pennsylvania law, and, if passed, could result in a lawsuit against the county.
“The [Convention Center] Act is not applicable to Lancaster,” warns Christopher C. Conner, an attorney with the Harrisburg-based law firm of Mette, Evans, & Woodside, on behalf of the Lancaster Host Hotel and Conference Center.
Conner seemed to have a sound legal argument. Section 13102(c) (1) of the Act is unambiguous. It reads:
“This Act shall not apply to a county which has an existing convention center which covers an area of more than 40,000 square feet.” The plaintiff Host Hotel, located just five miles from the proposed site, had 72,000 square feet of convention center space. Additionally, noted Conner, privately-owned Franklin & Marshall College also maintained a facility of more than 50,000 square feet which was also used for convention center purposes.
“It is clear from the Act,” writes Conner to the County Commissioners, “that the legislature did not intend that public financing and the imposition of a hotel room rental tax be used to construct a convention center that would compete with an existing convention center of more than 40,000 square feet.”
COMMISSIONERS IMPOSE ROOM TAX. September 15. In three separate resolutions, numbers 44, 45, & 46, the three Lancaster County Board of Commissioners – Republicans Paul Thibault and Terry Kauffman, and Democrat, Ron Ford — vote unanimously to establish a convention center “authority,” and impose two taxes: a 3.1% hotel/motel room tax and a 1.9% excise tax.
Both taxes will be levied solely on the hotel and motel owners of Lancaster County. The tax would commence January 01, 2000.
Lancaster Newspapers’ Intelligencer-Journal editorializes on the morning of the vote: “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.”
CITY COUNCIL PASSES LCCCA VOTE. SEPTEMBER 15. In a 6-1 vote, Ted Darcus, President of the City Council, along with five other council members pass a resolution forming the LCCCA.
LANCASTER COUNTY COMMISSIONERS AND LANCASTER CITY COUNCIL APPOINT MEMBERS TO LCCCA BOARD.
The LCCCA is to be comprised of a seven-member board of directors appointed by the Lancaster city Mayor (confirmed by City Council) and Lancaster County Commissioners.
The city and county will alternate the “swing” vote on the LCCCA board every four years. The original LCCCA board have four county appointees, with three city appointments.
The four initial county appointees approved by the Lancaster County Commissioners for the LCCCA board are: James O. Pickard, former Pennsylvania commerce secretary and Mayor Smithgall’s special economic advisor; W. Garth Sprecher, a senior executive of Ephrata-based D&E Communications; Camilla L. Collova, recently retired Armstrong World Industries vice president; and Paul E. Wright, retired general manager of a local Sears store.
The three city authority members named by Mayor Smithgall and approved by the Lancaster City Council are: Christina L. Hausner, an attorney; Willie Borden, Jr., an electrician and local Elks Lodge president; and E. Bradley Clark, a member of the Lancaster Campaign and vice president of Earl Realty, the parent company of Dutch Wonderland, a Lancaster County amusement park.
October – 1999
FIRST LCCCA BOARD MEETING. At its first meeting in October, 1999, after selecting officers – Pickard is named Chairman and Executive Director. The newly formed board has but one item of business. The board votes on a solicitor for the Authority. The seven members unanimously approve Stevens & Lee as LCCCA solicitor, the firm that wrote the enabling state legislation. This is a cozy relationship from the start, as the first LCCCA offices happen to be located in the Fulton building, in the office space leased and occupied by the Lancaster branch of the law firm of Stevens & Lee.
Stevens & Lee is also the lobbyist of record for High Industries, the general partner of Penn Square Partners.
SEN. GIB ARMSTRONG AMENDS CONVENTION CENTER LAW. October 19. Sen. Armstrong introduces an amendment to House Bill 148, originally intended to authorize county appropriations for Flag Day observance. Armstrong uses that pretext to reenact the Convention Center Act with a single change. Armstrong change only the scope of the Convention Center Act. This was known afterward as the “Armstrong Amendment.”
Here is the original language of the 1994 Convention Center Act:
“This Act shall not apply to a county which has an existing convention center which covers an area of more than 40,000 square feet.”
This is Armstrong’s 1999 change:
“This subdivision shall not apply to a county which has an existing convention center owned by, leased by or operated by an existing authority or the Commonwealth with covers an area of more than 40,000 square feet.” [emphasis added]
By amending the scope of the Act, Armstrong rendered the principal legal challenge on Section 13102 invalid.
There was not a single word of the change – to a law that directly impacts the people and economy of Lancaster County – published in any of the Lancaster Newspapers until after the bill passes the Senate (October 20, 1999) and the House (October 26).
November – 1999
THIBAULT, SHAUB, FORD ELECTED COUNTY COMMISSIONERS. Thibault and Ford are re-elected; Howard “Pete” Shaub, Jr. is elected for the first time. Thibault runs (and wins) un-endorsed. Again, Thibault is voted chairman of the board of commissioners.
GOVERNOR RIDGE SIGNS ARMSTORNG’S AMENDED LAW. The Governor signs the revised law on November 3. On November 5, with cameras flashing, Gov. Ridge is in Penn Square handing over (and posing next to) an oversized $15 million check to Armstrong, Mayor Smithgall, Baldridge, and the rest of the project’s sponsors and supporters.
December – 1999
HISTORIC TRUST WARNS LCCCA OF EASEMENTS ON PROPERTIES. Randolph Harris is the Executive Director of the Lancaster Historic Preservation Trust. Harris, a Yale-educated historian, and Thaddeus Stevens’ scholar, is aware the Trust owns easements on the Stevens’ properties, requiring the Trust’s approval for any alteration done to the buildings.
In 1983, the easements had been signed over to the Trust by the last owners of the buildings. Soon after the LCCCA board is formed, Harris writes a letter to chairman Pickard advising him of this fact. Pickard does not respond, and by June, 2000, all of the properties were purchased by the Authority.
January – 2000
HOTEL AND MOTEL ROOM AND EXCISE TAXES TAKE EFFECT THROUGHOUT LANCASTER COUNTY. January 01, 2000.
RON HARPER, JR. LAUNCHES WEBSITE FIFTHESTATE.COM. Political activist and independent journalist, Ron Harper, Jr. launches website, 5thestate.com. Harper combines facility with digital technology; rabbinical knowledge of the Pennsylvania and U.S. Constitutions; and the physical energy of a hyperactive humming bird, to wreak a most unique kind of civic havoc in Lancaster
March – 2000
LCCCA PURCHASES BUILDINGS AROUND SITE. The Pickard-led board begins the process of purchasing the properties around the proposed location for the convention center. The LCCCA purchases four dilapidated properties bordering South Queen Street, Vine, and Christian Streets. The land and buildings are purchased for a reported $539,900.
HOTELIERS FILE SUIT. March 24. A group of 37 of hotel and motel owners representing different hospitality establishments, large and small, across Lancaster County’s vast 940 square miles, engage Mette Evans & Woodside, and file a civil lawsuit in the Court of Common Pleas in downtown Lancaster.
The suit petitions for declaratory and injunctive relief on a total of eight counts of alleged federal and state violations of Constitutional rights.
With respect to federal Constitutional violations, the hotel and motel owners argue in their suit:
“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 hotel and motel owners argue that the tax imposed “a substantial burden on the Plaintiffs without a corresponding benefit or with a disproportionately low benefit from the tax revenues.”
The lawsuit was heard first in December of 2000. It would not be the last battle in the courtroom.
July – 2000
LCCCA ‘TOURISM TASK FORCE’ RECOMMENDS BIGGER CENTER. After months of looking at the tourism and convention center market, a nine-member, LCCCA-appointed “Tourism Task Force” goes before the LCCCA board and recommends the board expand 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,” says Bradley Clark, chairman of the task force and member of the LCCCA board of directors at the July meeting.
August – 2000
LCCCA HIRES PRICEWATERHOUSE-COOPERS FOR CENTER STUDY. At its August LCCCA board meeting, the board commissions PricewaterhouseCoopers (Pricewaterhouse), an international hospitality consulting firm, to examine the viability of a larger convention center facility, and essentially re-size and update the Ernst & Young market analysis of 1999. The cost of the new study: $77,000.
As it did with the Ernst & Young report, Lancaster Newspapers reports that Pricewaterhouse was conducting a “feasibility study.” Again, this is misleading. Pricewaterhouse never claims it to be more than a market study, nor did it perform a genuine feasibility study.
Both the Ernst & Young and Pricewaterhouse reports recommend a single or “common” manager for the hotel and convention center.
November – 2000
PRICEWATERHOUSE DELIVERS REPORT AT LCCCA MEETING. At the LCCCA board meeting on November 8, 2000, representatives from Pricewaterhouse deliver their findings to the board and the public.
The Pricewaterhouse consultants estimate construction costs for the larger facility could reach $35 million, which could support a facility as large as 114,000 square feet – nearly double the original projected size.
December – 2000
HOTELIER TRIAL BEGINS. Under Judge Louis Farina, the hotelier case challenging the hotel room tax begins. There are only 11 plaintiffs in the suit, after more than two-dozen original litigants drop the suit.
HOTELIER TRIAL ENDS. In December, 2000, after a ten-day trial, Lancaster County Court of Common Pleas Judge Louis J. Farina repairs to his chambers to write the opinion for the court in the case in which 11 county hotel operators sued the LCCCA, the city and county of Lancaster. The 11 plaintiffs are all that remain from the original 37. Most cite legal costs as the reason for dropping out of the suit.
January – 2001
FARINA RULES IN HOTELIER CASE. In early January, 2000 after having gutted the hoteliers’ case with a number of devastating preliminary rulings, Judge Farina decides against the hoteliers on all counts.
The bottom line rulings: the hoteliers do not prove that the “burden” of the room tax outweighed the “benefit” from spillover business the center would generate; the room tax is Constitutional; and the ‘Armstrong Amendment’ of 1999 is not“special legislation,” and would therefore stand.
It is a clear and decisive win for the sponsors, but far from the final battle of this increasingly nasty civic conflict. Within days, the same 11 hotel owners file an appeal with the Commonwealth Court.
LCCCA SENDS OUT ‘REQUESTS FOR PROPOSALS’ FOR MANAGER OF CENTER. January, 2001, the LCCCA board mails approximately 20 requests for proposals to potential managers of the convention center. By March, the board had winnowed the number to five firms, and by May, 2001, three companies made the ’short list’ as finalists: Spectacor Management Group, Global Spectrum; and Interstate Hotels.
All three firms are based in Pennsylvania, and experienced managing large and small conference and convention centers nationally. Spectacor, headquartered in Philadelphia, has the most experience with convention centers, managing more than 90% of the public convention space in the country, including several of the largest facilities in Pennsylvania. Global Spectrum, also based in Philadelphia, manages the Philadelphia Convention Center, among other large centers. Interstate, a Pittsburgh-based company, has a long partnership with Marriott Hotels, and also manages many large conference centers and several convention centers across the country.
HISTORIC TRUST PLANS TO CREATE STEVENS/SMITH HISTORIC SITE. The Historic Preservation Trust announces plan to create a ‘Thaddeus Stevens and Lydia Hamilton Smith National Historic Landmark.’. The Trust recommends that the LCCCA restore all of the buildings and create a museum around the Stevens/Hamilton theme.
February – 2001
LCCCA: ‘WE WILL SAVE HISTORIC FACADES.’ LCCCA chairman Pickard announces the Authority will preserve the building facades.
“Those facades, at the very least, will have to be incorporated into the architecture of the convention center building,” Pickard is quoted in the Lancaster Newspapers. “Overall, the aesthetics will fit in. Even though it’s going to be a new building, we want it to reflect the heritage of Lancaster.”
Pickard clearly bristles at having to address the Stevens property issue. He states the Convention Center Authority was unaware of the easements when it purchased the buildings in March, 2000. Pickard blames the company overseeing the sale, Commonwealth National Title Insurance Co., for not making the Authority aware of the easements. The Authority planned to raze the buildings entirely, until Harris objected, citing the easements.
The Convention Center Authority and Historic Preservation Trust explore the possibility of integrating the historic buildings into the convention center design. But center planners object, concerned that it will reduce the size, and jeopardize the viability of the project.
April – 2001
RACL INVOKES EMINENT DOMAIN TO MOVE HISTORIC BUILDINGS. In April, after negotiating with the Redevelopment Authority of the City of Lancaster (RACL), the Convention Center Authority board votes unanimously to invoke eminent domain and relocate – as in physically transport – the whole of the three historical buildings across the street to a vacant parking lot behind the Swan Hotel.
“For one public body to be making a decision with another public body in a vacuum, without consulting with people who know about historic preservation law, is not wise,” Harris fumes after the meeting to move the buildings. “This was scripted, orchestrated, ad infinitum,” Harris continued, “(the LCCCA) wanted to make the perception we were all engaged in this discussion. But it’s a smokescreen. It’s bogus.”
May – 2001
RACL VOTES TO NULLIFY HISTORIC TRUST EASEMENTS. May 22. The RACL board votes unanimously to nullify the Stevens/Smith easements held by the Trust. The Intelligencer Journal reportes:
“Nullifying the easements on the historic properties is valid, as long as the convention center authority buys the Swan Hotel, said Thomas Weber, chairman of the redevelopment authority.“
LCCCA MEETINGS BECOME CIRCUS: HARPER PRESENTS PICKARD WITH ‘HUMBLE PIE. At the May LCCCA board meeting, gadfly journalist, Ron Harper, Jr., presents chairman Pickard with a chocolate cream pie—“humble pie,” Harper calls it. With mock deference, Harper places the pie in front of Pickard, who sits in his center seat on the raised dais. In a rage, Pickard roughly grabs the pie and flings it back toward Harper. He misses, but the entire act was recorded by the local WGAL television news cameras, and played for the folks at home. Pickard looks unhinged. The small crowd was stunned.
“You’ll get no apology from this chair,” Pickard snarls at Harper. Pickard is criticized by the Lancaster Newspapers, and later apologizes for his actions (but not to Harper) at the next meeting.
HOTEL OWNERS URGE SEPARATE MANAGER FOR CONVENTION CENTER AND HOTEL. In May, and (again in August) the Greater Lancaster Hotel and Motel Association (GLHMA) send a letter to Pickard and the LCCCA board urging a separate manager for the convention center, distinct from the still-unnamed hotel operator.
“The bottom line is that we opposed a common manager, period,” says GLHMA member. Rodney Gleiberman today. “We were not opposing this common manager, or that common manager. We opposed all common managers based upon the inherent conflict-of-interest, and what we knew would be another item to tip the scales in favor of the hotel competing against us on an uneven playing field.”
July – 2001
PENN SQUARE PARTNERS ANNOUNCE MARRIOTT FLAG FOR HOTEL. On July 24, Penn Square Partners announces that Marriott has been selected as the hotel ‘flag’ under which its hotel would be built, and that Interstate Hotels, Inc. would manage the hotel.
PENN SQUARE PARTNERS: INTERSTATE HOTELS SHOULD MANAGE BOTH HOTEL AND CENTER. July 25, Nevin Cooley, High Industries executive and Penn Square Partners President and spokesman, urges the LCCCA board to select Interstate as joint manager of both the “private” hotel and “public” convention center.
This is when the battle over the convention center explodes publicly. The fight is staged on the front pages of Lancaster Newspapers, which finds itself with a hot news story in the usually slow ‘dog days’ of late summer.
August – 2001
MAJOR DEBATE ABOUT MANAGEMENT OF CENTER. LCCCA TASK FORCE RECOMMENDS SEPARATE MANAGERS FOR PROJECT. August 15. The Tourism Task Force comes back to the LCCCA board with its recommendation. By a vote of 7-2, the Task Force recommends Spectacor manage the convention center.
On August 16, 2001, a group of hoteliers write a letter to Chairman Pickard, among other suggestions, state:
“We experienced SMG’s proposal first hand and found their presentation compelling. We left the meeting optimistic that SMG’s expertise in operating similar Convention Centers coupled with Interstate’s proven track record in successful hotel management will provide the Penn Square Project the best management team possible.”
On August 17, the Intelligencer Journal publishes an article, “WILLOW VALLEY WEIGHS IN ON MANAGER BID,”describing how the management of the Willow Valley Resort, which had been in lockstep with the Partners and the Authority until this point, recommended Spectacor and separate management.
On August 19, with a melodramatic, extra bold, stacked banner headline, the Sunday News blares:
“DOWNTOWN HOTEL TEETERS ON BRINK // PARTNERS IN WATT & SHAND BUILDING WILL PULL OUT IF CONVENTION CENTER AUTHORITY TAKES ADVICE OF TOURISM TASK FORCE FOR SEPARATE MANAGEMENT AND FACILITIES”
At a LCCCA meeting on August 22, three top hospitality industry experts, each with decades of experience, speak on behalf of separate management for the public convention center.
One of the experts, Robert Butera, president and CEO of Philadelphia’s Pennsylvania Convention Center, questions whether, in fact, common management was a condition Marriott placed on Penn Square Partners, as the Partners publicly claimed.
“If that’s what it is, let’s call it that,” Butera says. “But it’s not. It’s a direct subsidy [to Penn Square Partners].”
Much of the Lancaster political and business establishment publicly supports Interstate. These supporters included County Commissioner Paul Thibault, Richard Kneedler, President of Franklin & Marshall College: the School District of Lancaster, and, perhaps the project’s most fervent supporter, Lancaster Mayor Charlie Smithgall, is quoted, “I don’t care if [Spectacor] is the most spectacular convention center manager in the world. I think it’s better to have Interstate manage it than to have nothing.”
September – 2001
LCCCA PICKS INTERSTATE TO MANAGE BOTH CENTER AND HOTEL. The LCCCA board votes 5-1 to give the management contract to Interstate Hotels.
The September 12, 2001, vote on who will manage the convention center is so heated, on the day before, it draws the attention of Knight-Ridder, which picked up the story and runs, “Lobbying Intense as Lancaster, Pa., Convention Center Vote Nears.”
The Knight-Ridder article begins: “As the vote nears on an operator for the planned Lancaster County Convention Center, the people who will be making that decision are reading letters and e-mails and answering their telephones. ‘I have never in my life received as much information about how I should vote on anything as I have in the last couple of weeks,’ said Paul E. Wright, one of seven appointed Convention Center Authority board members expected to cast their vote Wednesday morning….”
The chambers at the Southern Market Center are unusually crowded, especially for a morning meeting. Approximately two-thirds of the audience members are in favor of Interstate managing the convention center.
Dale High himself approaches the microphone: “This is not a matter of us taking our ball and going home,” he says, speaking on behalf of Penn Square Partners. As we saw with the Twin Towers; these things can be taken away in a day.”
After High speaks, the audience erupts into applause.
January – 2002
COMMONWEALTH COURT SIDES WITH HOTELIERS’ APPEAL. On January 24, in a 6-1 ‘en banc’ (full, seven-judge panel) written ruling, the Commonwealth Court remands the case back to the Common Pleas Court in Lancaster and back to Farina. The appellate court decision is sharply critical of Farina’s judgment, writing, at one point, “This doesn’t make sense.” The Commonwealth Court essentially tells Farina, ‘Get it right this time.’
February – 2002
SPONSORS THREATEN TO PULL OUT OF PROJECT… AGAIN. The Sunday News reports on its front page, February 24, 2002: “Convention Center on the edge/Authority files with Pa. Supreme Court, citing fears project could be killed by hoteliers’ lawsuit”
The article reports a Penn Square Partners claim that Marriott had given a firm deadline in which construction must begin on the project. That date is said to be March 23, 2003. Similar to the supposed demand from Marriott regarding a common manager for both the hotel and convention center, the Partners do not produce a document confirming the Marriott ultimatum. The record does not show any reporters from Lancaster Newspapers – one of the two major Penn Square Partners – asking for, or reporting the contents of any Marriott document in either situation.
Despite the lack of corroborating documents from Marriott, Chairman Pickard takes the threat from the Partners seriously. “If we don’t start the project by March 23, 2003, the project is dead,” he said.
Penn Square Partners’ spokesman, Nevin D. Cooley said at the time: “Were Marriott to withdraw from the project, then obviously, our interest in the project goes away, too.”
LCCCA HIRE ATTORNEY RICHARD SPRAGUE. The prominent Sprague is successful getting the lawsuit heard at the PA. SUPREME COURT.
PICKARD STEPS DOWN AS EXECUTIVE DIRECTOR, MAINTAINS CHAIRMANSHIP. Michael Carper is hired as Executive Director. Carper resigns after six months. He has a confidentially agreement preventing comment on his departure.
July – 2002
SUPREME COURT AFFIRMS FARINA’S DECISION. July 16. The State Supreme Court, in a 13-page ruling written by Chief Justice Stephen Zappela, affirms Farina’s decision and rebuking the Commonwealth Court’s remanding the hoteliers’ case back to the lower court.
September, October – 2002
LCCCA WINS HOTELIER LAW SUIT. In the second week of September, 2002, both sets of lawyers go before the Commonwealth Court in Harrisburg. Three weeks after oral arguments are heard, on October 4, the Court returned its decision: Another complete victory for the Authority and sponsors of the project. The decision was unanimous.
“Hey, we are the clear winners and they are clear losers,” gloats Pickard to Lancaster Newspapers.
LCCCA POSSIBLY MISREPRESENTS STUDY IN STATE APPLICATION. In an application to a state agency for a $15 million grant, LCCCA chairman Jim Pickard characterizes the Pricewaterhouse market study as supporting the “economic feasibilty” of the project. It is shown later that using the term “feasibility” to refer to the Pricewaterhouse study is erroneous. The question is whether it is an intentional misrepresentation.
Pickard’s quote from the application:
“Please see the attached Market and Economic Analyses for the Proposed Lancaster County Convention Center prepared by PricewaterhouseCoopers, LLC. This report represents the results of the market and economic feasibility for the project and includes a recommended building program and utilization estimates as well as a financial and economic impact analysis.”
October – 2002
PRICEWATERHOUSE UPDATES 2000 MARKET STUDY. Nevin Cooley comments: “So, in order to evaluate the appropriate size [of the project], PricewaterhouseCoopers is going to go back into the marketplace and evaluate the pros and cons of the two potential sizes for the flat floor space,” Cooley says at the LCCCA board meeting. “Some ideas have emerged as to other types of activities that might be able to be held in the space, but we need to know the financial feasibility and viability of expanding the use of the facility. That wasn’t part of the study done several years ago,” says Cooley.
November – 2002
PRICEWATERHOUSE PRESENTS UPDATE REPORT. Pricewaterhouse consultants present updated report. Among the recommendations is an expansion in the physical size of the convention center. The center is now projected to be 114,000x square feet.
During the public comment portion of the meeting, after Pricewaterhouse presents its report, Peter Chiccarine, an executive with the Eden Resort, and a litigant against the Authority, exchanges angry words with Pickard and the Authority’s solicitor, John Espenshade, who is also the county solicitor and partner at the Stevens & Lee law firm.
December – 2002
SPONSORS CONTINUE ATTACK ON HOTELIERS. December 6. At a press conference, top Lancaster county and city officials, along with Chairman Pickard, express their collective outrage at the hoteliers. The officials announce their intention to counter sue the hoteliers under the Dragonetti Act, which addresses the issue of filing frivolous lawsuits.
At the press conference, County Commissioner Ron Ford says the hoteliers “are holding the people of Lancaster County hostage to their own self-interest.”
Mayor Smithgall is at the press conference to say he wants the hoteliers held accountable for the “serious economic harm” he says they are bringing to the city.
County Commissioner Chairman, Paul Thibault, says: “This extremism has got to come to an end,” adding the owners of the Eden Resort, Drew Anthon and Peter Chiccarine have a “war to the death mentality. They won’t stop until they’ve killed this project that will be a benefit to them and everyone else in the county.”
March – 2003
LCCCA HIRES CONSULTANTS DAN LOGAN AND ROB HAZARD. These two consultants, whose companies are Growth Business Development and Metrovision respectively, will bill the LCCCA well in excess of one million dollars in less than three years. There is virtually no work product to show for the two.
“For 20 years Hazard has been actively involved in asset development business, specifically publicly owned or sponsored convention centers that headquarter hotel facilities,” enthuses Pickard after Hazard is hired.
Hazard has a connection to the project, having worked for Interstate Hotels, Inc., the company that was to manage both Lancaster Marriott Hotel and Convention Center facilities. In 2001, on behalf of Interstate, Hazard worked with the Authority on negotiations between the Authority and Interstate.
[At a board meeting in 2006, county-appointed LCCCA board member, Laura Douglas, questions executive director Dave Hixson about Logan’s one person, Medford, New Jersey-based firm, Growth Business Development and about Hazard’s MetroVision:
“There are a number of these extremely high bills without itemization or some sort of results or some sort of actual work to show for it,” Douglas says.
April – 2003
KUNZLER RAISES POSSIBLITY OF COUNTY BOND BACKING. In an April 20 Letter to the Editor to the Sunday News, local businessman, Chris Kunzler, publicly raises the issue that a government guaranteed bond will be necessary to finance the convention center:
“The convention center alone is expected to cost $55 million, with $15 million supposedly coming from the state. The hotel tax is generating approximately $3 million a year. This $3 million in tax revenue will not come close to servicing the debt on a $40-million bond issue. Let’s not forget the ongoing operating losses of the convention center and the money being spent to promote it. Who will guarantee this bond? And when the project fails, where will the funding come from then? Taxes? Who will be responsible for the losses — the community, with additional taxes?”
STATE MUSEUM COMMISSION WARNS PENN SQUARE PARTNERS: YOUR PLANS MAKE WATT & SHAND NOT ‘HISTORIC’. In a scathing letter to High Real Estate executive Thomas D. Smithgall, (and no relation to Mayor Smithgall) dated April 23, 2003, the Pennsylvania Historical and Museum Commission sharply criticizes the proposed project:
“Given the extent of development and demolition, it is our opinion that the project as proposed does not meet the Secretary of the Interior’s Standards for Rehabilitation & Guidelines for Rehabilitating Historic Buildings and therefore will adversely affect the Lancaster Historic District. In addition, due to the extent of demolition and development, it is our opinion that the National Park Service would not approve the project for federal tax credits.”
“A 12-story tower (220 rooms) will be added on top of the Watt & Shand building. Its location on top of a historic building is grossly out of character out of scale and character with the historic building.
“The project will also result in substantial change in character to the Watt & Shand building because of the extensive changes needed to make the building a convention center hotel. 1) From what we can tell, there will be no sense that one is entering a former department store as a result of creating a 4-story [full height] atrium, a seamless connection to the convention center, the removal of all historic fabric [plaster beams and columns, pressed metal ceilings, relocation of elevators to relate to the new tower, loss of historic stairs, replacement of all original sash. 2) The removal of the original display windows and recess a new exterior wall on the principal elevation in order to create an arcade inconsistent with the building’s historic character.”
May – 2003
ELECTION PRIMARY ELECTS SHELLENBERGER, SHAUB, HENDERSON COMMISSIONER CANDIDATES. The May 20 primary consists of six Republicans and three Democrats. The Republicans include: incumbent Commissioner, Howard ‘Pete’ Shaub; Richard ‘Dick’ Shellenberger, a restaurant owner; Dennis Stuckey, the County Controller; James Huber, former four-term County Commissioner; Steve McDonald, County Recorder of Deeds; and Scott Martin, County Youth Intervention Director.
The Democrats field: Bill Saylor, a former television newsman; Jon Price, a township supervisor in tiny Clay Township; and Molly Henderson, a college professor and former Lancaster City public health official.
Only Shellenberger is endorsed by the Republican Party, while the Democrats endorse all three candidates. This was the first indication the race wouldn’t follow strict convention.
When the votes are counted, Dick Shellenberger collects the most, with 21,823 votes. Pete Shaub garners 15,465, for second place and his name as one of two Republicans on the November ballot. Shaub has more than 4,000 votes more than third-place finisher, Dennis Stuckey. Huber and McDonald finished fourth and fifth in that order.
For the Democrats, Henderson garners 6,272 votes, beating Saylor by almost 1,500 votes. Price comes within 300 votes of Saylor.
June – 2003
TED DARCUS APPOINTED TO LCCCA BOARD. Former city council member C. Ted Darcus is named to the LCCCA board as a city appointment. Darcus is a long time director of the YMCA.
BRIGHTSIDE CHURCH $5 MILLION CENTER OPENS. The $5 million Brightside Church and community center opens on the corner of Hershey and Wabank Avenues in Lancaster. Brightside serves a mostly African-American population, providing education, youth, and employment services. It is a center of the African-American community in Lancaster. Bright Side particularly serves the local youth community, Ted Darcus’ clientele, and has many services for them, including after-school programs, education tutorials, day camps, and summer excursions.
On a wall at the entrance of the center, one sees plaques listing the major donors for the new facility. Among the names most prominently displayed, include High, Buckwalter, and Fulton. There is a branch of Fulton Bank within Brightside.
JIM CLYMER ENTERS COMMISSIONERS RACE. Jim Clymer indicates to the Lancaster New Era that he is leaning toward running a third-party campaign for commissioner, saying his conservative principles are more in line with Lancaster County voters than either Democrat candidate.
“I decided to run for commissioner because none of the other candidates were willing to take a position against the convention center,” Clymer says.
Weeks later, Clymer files candidate’s papers to run for Lancaster County Commissioner. To get his name on the November ballot, Clymer is required to collect a minimum 1,500 signatures from registered voters attesting to his fitness to serve as a county commissioner. By July 31, when Clymer turns in his signatures, he has almost 3,000 valid names, nearly double the necessary number. Jim Clymer is now going to have a voice in this election.
“In business, you don’t just go out and start a new project without looking at what’s happening in other places. Convention centers are failing all over the place. What does this city have that will make a difference? We don’t even have air service,”Clymer says during the campaign.
What most people anticipated would be a traditional two-way contest between Democrats Bill Saylor and Molly Henderson, is now a battle that includes Jim Clymer for the third Commissioner’s seat.
LCCCA HIRES FAIRMONT CAPITAL AS FINANCIAL ADVISER. At its regular June board meeting, the LCCCA awards the financial advisers contract to Philadelphia-based Fairmont Capital Advisors, “an independent financial advisory firm.”
Fairmont’s senior vice president is Thomas Beckett, who becomes the Authority’s principal financial advisor. Beckett is said to have 15 years municipal market experience, and is hired to provide expertise in the bond markets for the Authority.
Like Logan and Hazard, Beckett’s bills are simple statements that lacked detail. Beckett, too, was paid several hundred thousand dollars for his consultancy.
July – 2003
SHAUB, SHELLENBERGER, ESPENSHADE DISCUSS SELLING CONESTOGA VIEW. During summer months of 2003, the two Republican ’shoe-in’ commissioner candidates, Pete Shaub, and Dick Shellenberger, are quietly engaging in regular, private meetings with Lancaster County solicitor, John Espenshade.
The topic of the meetings between Shaub, Shellenberger, and Espenshade — which occurred privately among the three after the primary election and before Shellenberger took office — is the potential sale of the county-owned Conestoga View Nursing Home.
Since Shellenberger has not yet been elected, the meetings do not violate the state’s open meetings, or Sunshine, laws.
Espenshade, the county solicitor for more than 15 years, is also solicitor for the Lancaster County Convention Center Authority (LCCCA), and at Stevens & Lee.
Stevens & Lee still represents High Industries as High’s registered lobbyist in Harrisburg.
August – 2003
LCCCA RECEIVES CH JOHNSON MARKET STUDY*. Rob Hazard’s Metrovision was the Authority’s point person on this study.
HVS MARKET STUDY SUBMITTED TO PENN SQUARE PARTNERS*. Like all of the previous studies commissioned by the sponsors, the HVS study is a market, not feasibility, study.
September – 2003
DAVID HIXSON HIRED LCCCA EXECUTIVE DIRECTOR. Hixson comes on the recommendation of former executive director Jim Pickard. Hixson worked in the press office during the Ridge administration.
COMMISSIONER CANDIDATE JIM CLYMER PROPOSES COUNTY-WIDE REFERENDUM ON CONVENTION CENTER PROJECT. The idea does not come to fruition.
October – 2003
F&M PRESIDENT JOHN FRY NAMED TO LCCCA BOARD. Fry is appointed to replace Jim Pickard on the LCCCA board. Pickard’s second term began only a month earlier. (Pickard, the Board’s first Chairman and Executive Director, stepped down from those positions in 2002, but remained a voting board member until resigning from the board entirely at this point in 2003.)
“We are lucky to have someone of John Fry’s caliber on the board,” says a beaming (soon to be ex-) Commissioner Paul Thibault, announcing Fry’s appointment, in October, 2003.
COUNTY COMMISSIONERS HIRE BOND COUNSEL FOR GUARANTY. On October 16 —without a formal request from the LCCCA— Commissioner Thibault and the rest of the Commissioners’ board vote to hire bond counsel to explore a county guaranty.
At the meeting, Clymer raises the question of how the board could hire counsel unless it had—outside of public view—discussed the official action privately.
“Something doesn’t smell well in Denmark,” says Jim Clymer at the crowded October 16th Commissioners’ meeting.
COMMISSIONERS HOLD PUBLIC MEETING ON COUNTY BOND GUARANTY. On the 22nd of October, the Commissioners hold a public meeting to discuss the county bond guaranty.
COMMISSIONERS PASS BOND GUARANTY. On October 29, less than a week before the election., in the form of County Ordinance 73, the Lancaster County Board of Commissioners, in a 2-1 vote (Shaub voted against) pass the bond guaranty.
The $40 million Citizens Bank construction bond, although guaranteed by the commissioners, will be a debt of the Convention Center Authority. According to governing Pennsylvania law — the Convention Center Act of 1994 — until that debt is “fully met and discharged,” including interest, there is nothing any subsequent board of commissioners can do about lowering or abolishing the tax.
November – 2003
SHAUB, SHELLENBERGER, HENDERSON ELECTED COUNTY COMMISSIONERS. November 4. Dick Shellenberger, Pete Shaub, and Molly Henderson are elected to the board of Lancaster County Commissioners. Jim Clymer garners an impressive 18,000 votes. Shellenberger is the leading vote-getter, with more than 41,000 ballots in his column.
January – 2004
SHELLENBERGER, SHAUB, HENDERSON TAKE OFFICE. January 7.
DARCUS NAMED CHAIR OF LCCCA BOARD. January 12, 2004. C. Ted Darcus is voted by his fellow board members chairman of the Convention Center Authority board.
Darcus seems to take his meeting management style from his predecessor on the board, Jim Pickard, who ran the LCCCA meetings with an imperious iron gavel. As with Pickard, under Darcus, questions from the public – during public meetings – go unanswered.
Ted Darcus proves to be a rude and belligerent chairman. Darcus has a habit of intentionally looking down at his desk when a member of the public is speaking, often pretending to read or write while citizens try to make their points. Questions from board members are openly discouraged.
February – 2004
GARY HEINKE HIRED. Gary Heinke is hired as Chief Services Officer for Lancaster County. A personal friend of Commissioner Shellenberger, Heinke begins work on March 29, 2004. Weeks later, his job responsibilities are expanded to include supervising five new departments, and overseeing Conestoga View.
For much of 2004, Heinke and County Administrator, Don Elliot, ‘walk the halls’ on behalf of Shellenberger and Shaub, as the two commissioners secretly negotiate the sale of Conestoga View. County (and LCCCA) solicitor, John Espenshade of Stevens & Lee, is centrally involved in these negotiations. Commissioner Molly Henderson is deliberately kept ‘in the dark’ about these discussions.
July – 2004
‘ACT 23’ IS PASSED. The amendment known as ‘Act 23’ passes in the legislature. The principal author of the Act 23 amendment is Sen. David Brightbill, a Lancaster County Republican. Brightbill’s amendment adds language allowing “convention centers” and “hotel establishments” to fall within the Department of Community and Economic Development (DCED) funding guidelines. (Brightbill went to work for the Stevens & Lee law firm in its government affairs division after leaving the legislature in 2007.) Sen. Gibson Armstrong is also a co-sponsor of Act 23. [12 Pa.C.S. §3406(b)(11)]
December – 2004
INTELL PUBLISHES ARTICLE DESCRIBING RACL PURCHASE OF WATT & SHAND. In a front page story on December 17, 2004 – three months before the School District of Lancaster (SDL) will vote on the TIF – the Intelligencer Journal publishes an article (“City to buy Watt & Shand”). The article outlines a plan by which the city of Lancaster, using one of its municipal authorities,, the Redevelopment Authority for the City of Lancaster (RACL) will purchase the landmark building from Penn Square Partners.
The RACL plan exempts the hotel from property taxes, and no longer comes with an offer by PSP to contribute annually to the SDL in lieu of property taxes.
The plan, according the Intel article, will also allow the City of Lancaster, through RACL, to apply for annual grants through the state’s Department of Community and Economic Development (DCED), under the newly passed ‘Act 23,’ which would rebate to PSP an anticipated million dollars of annual state sales tax generated directly or indirectly by the convention center project. (Eventually the rebate is pledged to service a $14 million loan from Fulton Bank.)
January – 2005
SHELLENBERGER REPLACES SHAUB AS CHAIR OF COMMISSIONERS’ BOARD, ALIGNS WITH DEMOCRAT HENDERSON. The ‘coup’ results in deep animosity between Republicans Shellenberger and Shaub. Shellenberger is now aligned with Democrat Henderson in opposing the convention center.
PENN SQUARE PARTNERS AND OTHER SPONSERS LOBBY SCHOOL BOARD FOR ITS TIF PROPOSAL. During the month of January, Nevin Cooley and Charlie Smithgall are among the sponsors quietly but persistently lobbying School Board of Lancaster members to adopt the Penn Square Partners Tax Increment Financing (TIF) plan.
The proposed Penn Square Partners TIF calls for the SDL to re-direct 90% of the school real estate taxes it was to receive from the hotel to pay down the hotel mortgage bonds. Full tax payments will be available to the school district in 20 years when the mortgage bonds would be paid off. If certain return on investment – 12% – iss exceeded during the TIF period, the Partners tax payment will increase.
Mike Winterstein, a school board member who will soon vote on the TIF, remembers Mayor Charlie Smithgall lobbying him during the weeks before the school board vote: “I recall the meeting very well,” Winterstein says. “Smithgall is trying to get us to pass their [Penn Square Partners’] TIF and he says, ‘Well, if you don’t do it, we’ll just take it off the tax rolls.’ I couldn’t believe it.”
February – 2005
COMMISSIONERS SHELLENBERGER AND HENDERSON SUBMIT 57 QUESTIONS TO LCCCA; RACL; PSP. The questions concern the proposed TIF plan and many other areas of financing and feasibility of the convention center project, including potential tax payer risk, and the legality of the tax itself. The Commissioners are demanding answers to very difficult questions.
The unwillingness of Penn Square Partners and the other sponsors to respond to the Commissioners’ questions raise serious concerns in Shellenberger and Henderson.
PSP’S COOLEY LOBBIES SCHOOL BOARD IN LETTER. In a letter to the president of the school board, Patrice Dixson, Penn Square Partners President, Nevin Cooley, references the HVS market study of 2003, which he incorrectly, and repeatedly, characterizes as a “feasibility study.” (It is later certified that the study is, in fact, a market study, not the much more comprehensive ‘feasibility’ study, which projects revenues and expenses, profits or losses, and also includes a market analysis. )
March – 2005
LANCASTER GENERAL PUBLIC OVERWHELMINGLY OPPOSES PARTNERS’ TIF PLAN. Public sentiment strongly opposes the TIF. According to an Intelligencer Journal poll published March 12, three days before the School Board vote, 93% of respondents oppose the plan.
SCHOOL BOARD REJECTS PARTNERS’ TIF PLAN. On March 15, at McCaskey High School, the SDL resoundingly rejects of the Partners’ plan. In a 7-1 vote (with one abstention), the School Board refuses to back the TIF.
SPONSORS SAY PROJECT FINISHED AFTER LOSING TIF VOTE. Lancaster Newspapers’ reports immediately after the TIF vote:
“Supporters of a downtown Lancaster hotel and convention center on Thursday pulled the plug on a tax relief plan they said was needed to support the project. And the center project remains barely alive today,” reads a New Era article after the vote.
Says Penn Square Partner and Lancaster Newspapers CEO, Jack Buckwalter: “We are very disappointed. Over the past seven years, we have made our best efforts to bring the Watt & Shand building back to life. It appears that we cannot proceed under the conditions as set by the school board. So the project very well at this juncture could die.”
Dale High releases a written published statement two days after the ‘Ides of March’ school board vote. “We have stopped all work on our portion of the project, effectively immediately.”
High immediately instructs his construction company to remove all signs from the Watt & Shand building promoting the project coming soon.
“We made it clear that this is our best offer,” says Nevin Cooley following the meeting. “There is nothing more that we can do. If I could have offered something different, I would have. We can’t go forward and the community and the taxing authority will continue to have a building that is empty and deteriorating and not generating anything in new taxes. . . . There is no ‘Plan B.”
On March 22, a week after the vote, Rep. Mike Sturla, another ally of the project in Harrisburg says to the New Era after a revised TIF proposal to the school board was made: “We’ve unloaded our tool box. This is the end.”
March 22“The project proposed by Penn Square Partners holds a promise of good for the county, the city and the school district,”candidate Gray stated on March 22, 2005.
Three days later, March 25, the Intelligencer Journal virtually pronounces the project dead. “Disarray hits Penn Sq. plans/Leaders halt tax deal negotiations,” the headline reads. The article strikes an ominous tone:
“Plans to build a luxury hotel and convention center on Penn Square suffered another blow Thursday night, when hotel developer Penn Square Partners ended attempts to obtain property tax breaks for the project. The partnership had said it needed millions in property tax abatements from City Council, county commissioners and the School District of Lancaster board to build the 300-room Marriott Hotel.
“The collapse of negotiations concerning the tax deals places the status of the hotel and adjoining convention center in doubt.”
“‘We’re out of time,’ says state Sen. Gibson Armstrong, one of the chief proponents of the project. ‘It’s impossible to pull everything together.’”
The next day, on Good Friday, March 26, the Intelligencer Journal reports that a $22 million funding gap may doom the project. “A $22 million funding gap that first surfaced in early 2004 continues to threaten the proposed downtown hotel/convention center,” the article begins.
‘MIRACULOUS’ SAVING OF THE PROJECT. On Monday March 28, 2005, one day after Easter Sunday, Lancaster County citizens read that the project proclaimed to be “dead” only days before had been miraculously resurrected.
“HOTEL PLAN RESCUED,” exclaimeS the Lancaster New Era in its headline.
The article begins, breathlessly:
“Skip the school board. Forget the county commissioners’ 57 questions.
“The Lancaster City Redevelopment Authority this morning unveiled a new way to finance – and keep alive – a proposed 300-room convention center hotel on Penn Square.” [underline added.]
As it turns out, what the sponsors “unveiled” was not “a new way to finance” the hotel. Rather, it is a “Plan ‘B’” that is far more favorable to PSP than what they presented to the SDL. And it is the exact plan that one of Jack Buckwalter’s newspapers reported on in detail three months prior, on December 17, 2004.
In the ‘new’ financing scheme, not only will the SDL receive no real estate taxes whatever for twenty-years, but the offer of “$150,000″ in annual payment that Dale High for PSP had “agreed to guarantee” is now gone.
The TIF and RACL proposals awaken the public, and open a new front of opposition to the project. Among the citizens who become active around the TIF issue are April Koppenhaver, a local art gallery owner and realtor, and Randolph Carney, a field services engineer; today a member of the SDL.
Both Carney and Koppenhaver begin regularly attending, monitoring, and commenting at LCCCA public meetings. Carney, particularly, documents all aspects of the projects. He shares the information on LancasterFirst.org, a website he co-founds with Koppenhaver and Ron Harper, Jr.
While Koppenhaver is an emotional voice of opposition to the project, Carney is deliberate, calm, and unfailingly polite. It is Carney who likely knows and understands more about the project than anyone on either side of the issue.
April – 2005
ROBERT FIELD BECOMES INVOLVED IN CONVENTION CENTER ISSUE. In early April, Lancaster businessman, activist, and philanthropist Robert E. Field travels to the Penn Square offices of Rufus Fulton, CEO of Fulton Bank, to discuss the project with him. Fulton, whose bank holds the smallest stake in Penn Square Partners, refers Field to Jack Buckwalter, Chairman of Lancaster Newspapers. Buckwalter, in turn, suggests that Field meet with Dale High, CEO of High Industries, and the general partner of Penn Square Partners.
The three meetings take place over a four-day period. Field recalls the meetings:
“My conversation with Rufus at the bank gave me reason to believe that he lacked confidence in the convention center project. I surmised that Fulton felt obliged to go along with major clients of the bank by taking a small partnership interest. Jack, at the newspaper, explained that he had been immersed over the past year in directing other Steinman enterprises, and had left the convention center project in the hands of Dale High. When I met with High, I asked Dale if there was a feasibility study, and he said ‘Yes,’ but he declined to let me see it. He did not dispel my perception of the existing downtown hotel market (or lack thereof.) According to Dale, he had assurances from major firms that they would move to downtown provided the convention center project went ahead. High’s explanation of why the new hotel would succeed struck me as: ‘If we build it, they will come.’”
RACL BUYS WATT & SHAND FOR 6.8 MILLION; ORIGINALLY PURCHASED IN 1998 FOR 1.25 MILLION. The sale effectively takes the place of the TIF plan, and removes Penn Square Partners from paying property taxes on their hotel.
CITY COUNCIL APPROVES ACT 23 APPLICATION; CONTROLLER CAMPBELL BLOCKS APPLICATION. On April 12, the Lancaster City Council votes 6-1 to apply for the $36 million in bond funds for the hotel. Luis Mendoza, a Republican, dissents. Mendoza explains that Council members have not been provided sufficient information, despite his many requests.
Here is the timeline of the events surrounding the Act 23 application:
- ·April 12, 2005: City council votes to apply for $36 million in Act 23 funding.
- ·April 20, 2005 Controller Campbell is presented with documents related to the financing of the Act 23 grants.
- ·April 22, 2005, Controller Campbell sends letter to Mayor Smithgall stating that he would not execute the documents in question until he had assurance of the legality of the application in the form of an independent review by counsel of the Controller’s choosing to investigate the issues raised by Kelin’s memorandum.
- ·April 22, 2005 the Mayor sues the Controller to compel him to sign the documents.
- ·April 25, 2005, the Controller is ordered to appear in common pleas court; judge entered a preliminary “Mandamus” order requiring the Controller to execute the documents and, in the alternative, allowing the Mayor to sign as attorney-in-fact.
- ·April 27, 2005 The April 25 court order made permanent
- ·May, 2005 Campbell files appeal with Pennsylvania Commonwealth Court
- ·September 14, 2005 Campbell loses appeal to Commonwealth Court. County files amicus brief on behalf of Campbell.
June – 2005
LCCCA HIRES MAURICE WALKER. The Convention Center Authority hires Bulls Advisory Group managing partner, Maurice Walker, at $300 per hour. Walker, with an MBA from the University of Virginia, has expertise in the commercial real estate and finance industries. Over an 18-year period Walker worked in the areas of development, technology, operations, investment asset management, compliance, business development/retention. He is a highly qualified consultant.
It is Walker who effectively runs the Authority, along with John Espenshade. He becomes executive director Dave Hixson’s right-hand man.’ By the time Walker’s contract is terminated in 2007, after just over two years, the consultant has been paid $1,124,642.61.
July – 2005
COMMISSIONERS VOTE TO ENTER AGREEMENT TO SELL CONESTOGA VIEW. On July 6, at a regular Commissioners’ meeting, all three Commissioners’ vote to enter into an agreement to sell Conestoga View to Complete HealthCare Services, the company that has run the facility for the previous 12 years. This vote means they are intending on finalizing the sale at a later date.
August – 2005
OPPOSITION TO CONVESTOGA VIEW SALE FEATURED IN LANCASTER NEWSPAPERS. Leading the opposition to the sale is former mayor, Art Morris, who attends all commissioners meetings, sharply criticizing the pending sale. Morris also writes letters to the editor, and rebukes the sale in his personal column in the Sunday News.
September – 2005
JUDY WARE REPLACED ON LCCCA BOARD. During her time on the board, county-appointee Judy Ware is regarded as an enthusiastic supporter of the project. Although Ware and the sponsors of the project want her to be re-appointed to the LCCCA board, Shellenberger and Henderson choose to replace her when Ware’s term expires on September 15.
Ware’s replacement on the LCCCA board is Laura Clampitt Douglas, a tough, smart, Texas-born businesswoman who doesn’t suffer fools. At Douglas’ first LCCCA board meeting, she peppers board chairman, Ted Darcus, and executive director, Dave Hixson, with questions and comments on bills the board is paying. Normally, the board pays the bills without discussion.
FRY LEAVES LCCCA BOARD, REPLACED BY DEB HALL. Amid controversy about when Fry’s term ends, Commissioner Shellenberger informs Fry that his seat will be filled by another person.
“I don’t believe in serving on boards where I am not wanted,” Fry writes in a letter to Shellenberger. “For reasons that are not clear to me, you have requested that I immediately submit my resignation as a member of the Authority.”
Shellenberger and Henderson appoint Deb Hall, president of the Ephrata Chamber of Commerce, to replace Fry on the LCCCA board. Like Douglas, Hall is intelligent and tough-minded. If anything, she has a harder edge than Douglas, and she, too, has questions about the project.
On September 22, 2005, Senator Gib Armstrong and Lancaster Mayor Charlie Smithgall publicly call for Commissioner Shellenberger’s resignation.
“The guy [Shellenberger] is out of control,” Armstrong is quoted on the front page of the Lancaster New Era. Armstrong, citing Shellenberger’s alleged pressuring of John Fry to resign from the LCCCA board and the handling of Conestoga View as the reason for asking for Shellenberger’s resignation.
COMMISIONERS VOTE TO SELL CONESTOGA VIEW. On September 28, 2005, at a packed Commissioners’ meeting, Shellenberger and Henderson vote to finalize the sale. Shaub, though expressing privately that he wants the sale to go through, dissents. This ignites a firestorm of criticism on the pages of Lancaster Newspapers.
October – 2005
ROBERT FIELD’S OP-ED ON DEVELPING WATT & SHAND SITE. On October 2, in a guest op-ed in the Sunday News, Robert Field shares his thoughts on the convention center. In the article (“Build on Success to Revitalize City”), Field points out the inherent difficulties in supporting a downtown hotel in the city of Lancaster.
In the piece, Field asks: “Is the downtown situation so unpromising that we need to do ‘something,’ no matter how great the subsidy, how much is put at risk, and how questionable the prospects for success?”
ORIGINAL LCCCA BOARD MEMBER SPRECHER RESIGNS FROM BOARD; ANOTHER PICK FOR SHELLENBERGER AND HENDERSON. Garth Sprecher, one of only two original board members still serving on the LCCCA board, resigns. Citing fatigue, Sprecher announces he is resigning from the board on October 15.
“Don’t read anything into this,” Sprecher says of his resignation the October LCCCA meeting. “I’m just tired.”
Sprecher’s seat is temporarily filled by Timothy Lease, general manager of a large Mountville motel.
Lease resigns suddenly after less than a week due to personal issues. He is replaced weeks later by another Shellenberger and Henderson pick, Jack Craver. Mr. Craver is a former hotel executive with decades of top-level experience in the hospitality industry, including management of the world renowned Plaza Hotel in New York City.
MAYORAL CANDIDATE RICK GRAY SAYS HE WILL ‘EVALUATE VIABILITY’ OF CENTER IF ELECTED. On October 13, the Lancaster New Era reports:
“If elected mayor, Rick Gray would immediately meet with his top advisers to evaluate the viability of the downtown hotel and convention center….‘Keeping the county commissioners’ concerns in mind,’ he told the Lancaster Rotary Club Wednesday, if he and his advisers decide it is not what the city needs, Gray said he’d ‘pull the plug’; on the $134 million project if he found it was not viable. . . .”
HEINKE BECOMES TARGET. In a New Era article on October 24, “Who is Gary Heinke?”, questions are raised by Art Morris about Heinke’s background and credentials listed on his resume.
On that same day, the Commissioners announce they are ordering an investigation into Heinke’s hiring. Thomas Myers, head of the county’s human resources department, is named to lead the investigation.
The next day, October 25, Heinke tells the Commissioners the information on his resume is accurate.
An article published Octobert 25 by the New Era (“A question of credentials”) uncovers several glaring misrepresentations on Heinke’s resume. It is 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.
October 28, 2005, Gary Heinke resigned as Chief Services Officer.
November – 2005
RICK GRAY WINS ELECTION. On November 6, Democrat Rick Gray narrowly defeats incumbent Republican Charlie Smithgall for Lancaster city Mayor.
DISTRICT ATTORNEY TOTARO LAUNCHES GRAND JURY INVESTIGATION ON HEINKE HIRING. On November 10, the day the county’s Myers Report is to be released, Lancaster County District Attorney Donald Totaro announces that his office is launching a grand jury investigation. It is only the third grand jury impaneled in the County’s history. The other two were murder cases.
Totaro then blankets the fifth floor of the County Courthouse, which holds the Commissioners’ and other county offices, with more than 80 subpoenas, including handing them to all three Lancaster County Commissioners.
Totaro launches the grand jury investigation before reading the Myers report. The Myers report concludes that Heinke falsified his resume, but not his county application for employment.
It didn’t seem to matter what the Myers report said; Totaro is determined 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,” says a pleased Art Morris after Totaro’s announcement.
FOX 43-TV/OPINION DYNAMICS POLL. Fox-43 TV, working with pollster Opinion Dynamics, conducts poll concerning convention center project. The startling revelation of the poll is that 78% of respondents with an opinion oppose taxpayer backing of a county bond. The poll is underwritten by Robert Field.
Lancaster Newspapers ‘buries’ and distorts the poll. Field pays for half-page advertisement showing results of poll.
December – 2005
‘OUT OF COMMISSION’ ARTICLE PUBLISHED. On Sunday December 11, 2005, in a massive 3,500 word article, “Out of Commission,” Sunday News staff writer Helen Colwell Adams paints a disturbing image of the County Commissioners. Adams depicts them as in-fighting, immature incompetents.
Colwell Adams surveys several of the Commissioners’ harshest critics.
Key quotes from the article:
“‘I’ve never seen so many lawsuits,’ state Sen. Gib E. Armstrong, a key supporter of the convention center, said. ‘I don’t think Don [Totaro] would form a grand jury if he didn’t think he had anything,’ Sen. Armstrong said, referring to the ongoing [grand jury] investigation.’”
William “Bill” Adams, former CEO of Armstrong Industries and founding member along with Dale High, Jack Buckwalter, and Rufus Fulton, of the Lancaster Alliance, wrote on the website of Friends of Better Government, a Republican political action committee founded by Paul Thibault:
“A question for our local historians: Was a board of commissioners in Lancaster County ever under criminal investigation by the district attorney?; that is, before 2005? Before 2005, affairs on the fifth floor already were spiraling out of control. The word ‘lame’ does not begin to describe Molly Henderson’s nervous attempts to distance herself from the disaster that is The Great Conestoga View Fiasco.”
Colwell Adams closes her massive article, which is accompanied by unflattering pictures of all three Commissioners, by quoting an anonymous “community leader.”
“Do all three of them remain for the next two years?” one community leader wondered last week.
“That’s the million-dollar question. I suspect Don Totaro might have a lot to do with that.”
ROBERT FIELD LAUNCHES NEWSLANC.COM. On the Newslanc.com website, which is updated daily, Field writes a “Watch Dog” column, in which he discusses and often praises or criticizes local items published in the Lancaster newspapers. Field pays particular attention to coverage the convention center issue.
MAYOR-ELECT GRAY CONSIDERS CENTER’S VIABILITY. On December 9, a month after his election, and only weeks prior to being sworn in, Gray states his ambivalence about the project again: “We’re taking a good look at the project right now with the idea of whether we can move it ahead or not,” says the Mayor-elect.
KENNY REPORT CERTIFIES THAT NO FEASIBILITY STUDIES HAVE BEEN CONDUCTED BY PROJECT SPONSORS. Mark Kenney, MAI, analyzes all of the studies performed on behalf of the convention center project. Kenney’s report is dated December 22, 2005:
“In conclusion, my review of the five reports discussed above indicates that they are meant to be market or marketing studies, and neither are represented as feasibility studies nor include sufficient information or analysis to be considered feasibility studies.” – Mark Kenney.
In a interview with NewsLanc, Kenney spoke about the two types of studies. “The difference between a market or marketing study and a feasibility study may not be known to the general public and used interchangeably,” Kenney says.“But people in the real estate business surely know the difference between the terms. You use a feasibility study to examine all the financials – taxes, investment, income, expenses, insurance, financing costs, everything – to determine if the project should be built. A market study doesn’t include all of that, and focuses, as the name suggests, on the marketing aspect of the proposed project.”
January – 2006
MAYOR RICK GRAY TAKES OFFICE. Gray is sworn in on January 3.
FARM & CENTER MEETING DRAWS CROWD OF OPPONENTS…. AND A NEW MAYOR. On January 4, LCCCA board members Laura Douglas, Deb Hall, Jack Craver hold a public meeting at the Farm & Home Center. The meeting is attended mostly by project opponents, about 200 of them.
Mayor Rick Gray, who takes office only the day before, appears at the meeting and denounces opponents and supports the project. This position is far different the one he publicly states only weeks prior. The meeting, and Gray’s remarks, are well-covered in the local print media.
Also on January 4, County Commissioner Molly Henderson sends letter to the LCCCA and Mayor-elect Gray making four proposals regarding project:
GRAY CRASHES COMMISSIONERS’ MEETING. A week after the Farm & Home Center meeting, Mayor Gray appears at the January 11 county commissioners meeting and tells commissioners if they want a feasibility study they should pay for it themselves. Commissioners consider the mayor’s offer but do not act immediately. Gray soon backs away from call for study, and adds conditions for its performance, including a short deadline.
ROBERT FIELD OFFERS $50,000 TO SUBSIDIZE FEASIBILITY STUDY. In a joint letter to Shellenberger and Gray dated January 11 (copying all three Lancaster newspapers), Robert Field offers $50,000 to subsidize a feasibility study on the project.
COMMISSIONERS VOTE TO CONTACT PRICEWATERHOUSE AGAIN. On their January18 meeting, the County Commissioners vote 3-0 to contact Pricewaterhouse about performing a complete feasibility on project. Ten days later, on January 28, Pricewaterhouse declines to conduct the feasibility study. No public explanation is given.
RACL FINALIZES WATT & SHAND PURCHASE FROM PENN SQUARE PARTNERS. On January 31, the final sale is completed for RACL ownership of Watt & Shand from Penn Square Partners. The city agency pays $7.25 million. The original purchase price in 1998 was $1.25 million. Story is not reported until February 9 by Lancaster Newspapers.
Also on January 31, the Historic Preservation Trust gives approval to develop historic Thaddeus Stevens interactive museum on site of Stevens’ former home and office.
February – 2005
SPONSORS DON’T HAVE TRAFFIC PERMIT. On February 2, NewsLanc discovers and reports project hasn’t gotten necessary “Highway Occupancy Permit” from the Pennsylvania Department of Transportation (PennDOT). The private partners petition for a waiver for Traffic Impact Study, but PennDOT rejects the partners’ waiver request. Partners eventually put up a letter of credit in lieu of the traffic impact study.
COMMISSIONERS SEARCH FOR FIRM TO CONDUCT FIRST FEASIBILITY STUDY. On February 8, County Commissioners Shellenberger and Henderson vote to solicit “Requests for Proposals” for first true feasibility study on project. Shaub dissents.
COMMISSIONERS HIRE PKF TO PERFORM FEASIBILITY STUDY. On February 15, Lancaster County Commissioners vote to hire Pannell, Kerr, Forster (PKF) Consulting to perform feasibility study. PKF is preeminent in the field of hospitality consulting. The cost of the study is projected to be $115,000. Robert Field ups his contribution to $65,000.
COMMISSIONERS CHALLENGE ACT 23. On February 22, Lancaster County Commissioners file lawsuit challenging ACT 23 funding of project. Howard Kelin is hired as the county’s special counsel in the litigation.
SPONSORS REFUSE TO COOPERATE WITH PKF. Former county commissioner Paul Thibault criticizes selection of PKF, saying the consulting firm is biased because it served as expert witness in hotelier litigation.
LCCCA executive director Dave Hixson announces his board will not cooperate in any way with PKF study. Penn Square Partners president Nevin Cooley says the same, as does Charles Simms, chair of RACL.
LCCCA BOARD MEMBER CRAVER LETTER EXPLAINS NEED FOR FEASIBILITY STUDY. On February 22, LCCCA board member Jack Craver writes a published letter to the editor calling for full comprehensive feasibility study. LCCCA chairman Ted Darcus wants “gag” order imposed on board members after Craver’s letter is published. “We can’t have people doing their own thing,” says Darcus.
LCCA PURCHASES LAUNDRY PROPERTY ON EAST KING STREET, ADJACENT TO PROJECT SITE. February 24.
COUNTY COMMISSIONER SHAUB PUBLICLY CRITICIZES SELECTION OF PKF. February 25.
COUNTY CHALLENGE TO ACT 23 HEARD IN COMMONWEALTH COURT. Lancaster County is represented by Howard Kelin. February 28
March – 2006
COMMISSIONER SHELLENBERGER REJECTS DARCUS’ ‘HORSETRADING.’ On March 1, County commissioner chairman Dick Shellenberger rejects offer from LCCCA chairman Ted Darcus that proposes the LCCCA take the county bond risk if commissioners will drop lawsuit and kill feasibility study. Shellenberger declines, saying,“I am not interested in horse trading.”
SITE DEVELOPMENT BEGINS. On March 4, asbestos and hazardous debris is removed from Watt & Shand building in preparation for demolition.
ROBERT FIELD DEFENDS UNDERWRITING FEASIBILITY STUDY. On, March 6, Robert Field has a Sunday News opinion item published: “Why subsidize a feasibility study?” Field writes: “Having determined that we were on the cusp of spending $140 million (most of it financed by the public) on a project that had not been subject to a professional economic feasibility evaluation I believed it imperative that a genuine feasibility study be undertaken.”
PENN SQUARE PARTNERS SHOW ‘WORST CASE’ SCENARIO. In a multi-thousand word special to the Sunday News on March 13, Penn Square Partners releases its self-perfomed “study” showing ‘worst case’ scenario impact on city and county taxpayers.
The study says that if county overnight stays decline by an unthinkable 29%, and no one used either the hotel or convention center, that the taxpayer cost would be, at most, $24.39 per city taxpayer, and $2.46 for county taxpayers. The“study” is given prominent placement on the front page of the Local News section.
CONSTRUCTION BIDS SOUGHT FOR PROJECT. On March 20 LCCCA seeks 19 construction contracts for project. Board members Douglas, Hall, Craver protest receiving documents related to bid process only days before the vote. “It’s more of ‘we’ll ram this through, regardless,” says Deb Hall.
ACT 23 AMENDMENTS PASSES IN SENATE. On March 21, the PA State Senate passes Sen. Armstrong’s amendment to Act 23 legislation by gutting another bill and inserting the Act 23 reforms. The changes directly benefit project and renders Commissioners lawsuit moot. The move is orchestrated and moved through the Senate by Appropriations chairman, Sen. Gibson Armstrong.
This is the second time Armstrong has ’strong-armed’ legislation directly benefiting the project. The bill goes to the House and is met with sharp criticism by the entire Lancaster County Republican delegation who complain about the secretive “heavy-handed tactics” of Armstrong.
APRIL – 2006
ARMSTRONG BILL WITHDRAWN DUE TO PROTEST FROM LANCASTER HOUSE DELEGATION. On April 6, Armstrong’s bill is withdrawn from a House vote due to heavy protest from Lancaster’s House delegation.
LCCCA DENIES MOTION TO LIMIT SPENDING. On April 13, the LCCCA board tables motion introduced by Laura Douglas to cap spending on project. There are no effective restraints on the cost of the now-$140 million project.
CONTRACTS FOR DEMOLITION AWARDED. On April 18, RACL’s “Convention Center Task Force” awards contracts for demolition of Watt & Shand building.
RACL FLOATS ANOTHER $2 MILLION BOND. On April 25, the Redevelopment Authority for the city of Lancaster (RACL) announces floating an additional $2 million bond, making city exposure $14 million.
HOUSE PASSES ARMSTRONG ACT 23 AMENDMENT. On April 26, the PA State House passes Armstrong’s amendment, 146 to 41. All Lancaster County Republicans vote against the bill that directly benefits project and renders county lawsuit moot.
May – 2006
PKF RELEASES ‘EXECUTIVE SUMMARY’ OF FEASIBILTY STUDY; “ALTERNATIVE USE FOR SITE” RECOMMENDED. On May 5. the PKF “Executive Summary” is released. Among its conclusions are that the project will lose $1.3 million per year and that project sponsors should consider “downsizing” or “find an alternate use for the site.” The report is immediately excoriated by project supporters.
OBLENDER’S DEMOLISHED WITHOUT PERMIT. May 5. It is reported in Lancaster Newspapers that the preliminary demolition of Oblender’s building was conducted without a city demolition permit. Demolition is temporarily halted. This is a rare public embarrassment for project sponsors.
AUTHORITY ANNOUNCES BID OPENINGS. May 7. The LCCCA announces that the construction bids will be opened in two phases: smaller contracts May 9; the rest May 17. The reason for the delay is that contractors are said to need more time to study project.
FIRST CONSTRUCTION BIDS UNSEALED. May 9. First construction bids are unsealed by LCCCA. Thirteen bids are received for four contracts: pre-cast concrete, laundry service, food service, fire protection.
SHELLENBERGER AND HENDERSON VOTE TO PETITION STATE REGARDING COUNTY GUARANTY. May 10. County Commissioners Henderson and Shellenberger vote to petition the state Department of Community and Economic Development to review the county’s 2003 $40 million bond guaranty. Commissioner Pete Shaub votes against the motion, and publicly charges his fellow commissioners with violating the Sunshine Law: “Commissioner Henderson and Commissioner Shellenberger, you continually violate the Sunshine law.”
GOV. RENDELL SIGNS ACT 23 LEGISLATION. May12. Pennsylvania Governor Edward Rendell signs Act 23 bill, as amended by Sen. Armstrong. This codifies the RACL/PSP tax issue on the hotel tax issue. Penn Square Partners will not pay property taxes although it will be the “primary user” of the hotel. It is a major victory for project sponsors.
LCCCA OPENS REMAINING CONSTRUCTION BIDS. May 17. LCCCA opens remaining construction bids. The low bids immediately put the project at least $13.6 million over budget, pushing it from $89 million to $102.6 million.
PRICEWATERHOUSE DISTANCES ITSELF FROM OWN STUDY. In an email to LCCCA board member Jack Craver, Robert Canton, lead consultant for the Pricewaterhouse report, voiced serious professional concerns about the feasibility of proposed project.
Canton writes: “In March of this year , I was so concerned that [PriceWaterhouse Cooper’s] analyses (demand study, economic impact, etc.) of a different building program were being used to ‘promote’ the proposed convention center development, that I wrote a note to Mr. Hixson requesting that all reference to PwC be removed from the LCCCA website.”
The memo also included: “Regardless of any review of our prior studies, the physical characteristics of the development that I understand to be proposed are VERY different from the project I studied (the equivalent of using a study of a 500 room Marriott to evaluate a 300-room Hampton).” [emphasis added.]
PKF SUBMITS FULL FEASIBILITY REPORT TO COUNTY COMMISSIONERS. Despite no cooperation from the LCCCA and other sponsors, PKF delivers a professionally prepared and thorough feasibility study of the project.
In the 83-page report, PKF frames the analysis around the key trend of supply growth in the meetings industry outpacing demand growth, thus creating a more fiercely competitive environment for conventions events. This issue was developed in a Brookings Institute study of 2005 that detailed the trend in depth. “… [O]ur findings lead us to conclude that the potential economic benefits are not likely to be sufficient to justify the risks involved, including the potential need to raise the hotel tax to fund operating deficits after several years should the reserves become depleted. We therefore recommend that, prior to proceeding further with this project, the parties involved consider exploring a downsizing of the project or an alternate use for the site.”
COMMON CAUSE RAISES QUESTIONS ABOUT CONVENTION CENTER PROJECT. Barry Kauffman, Executive Director of Common Cause/PA, writes a letter to Pennsylvania Governor Edward G. Rendell, urging the Governor to direct the Auditor General to investigate the LCCCA.
Kauffman’s letter merits only a single sentence reference in a Lancaster Newspapers article on another topic, and the reference is buried in the fifteenth paragraph.
Still, the Common Cause letter to Rendell is a stinging public slam on the Authority’s operations. Kauffman writes:
“The apparent lack of transparency and accountability regarding this Project have prompted Common Cause/PA to express these concerns to you, and we ask that you instruct the Secretary of Community and Economic Development to 1) conduct a complete review audit of state funding pertaining to this project; 2) ensure that this Project is in full compliance with all state laws regarding grants, contracting public input and oversight; and 3) ensure that all public records about this Project be made available in full compliance with state law.”
TOTARO’S GRAND JURY EXPANDS TO INCLUDE COMMISSIONERS. The grand jury, at Totaro’s request, and with Farina’s approval, expands its investigation to include several other possible charges that involve the Lancaster County Commissioners.
These expanded charges, according to the report, include: “Criminal conspiracy (18 Pa.C.S. § 903), Penalty for neglect or refusal to perform duties (16 P.S. § 411), Meetings open to public (16 P.S. § 460), Assistant County Solicitors (16 P.S. § 904), Contract procedures; terms and bonds; advertising for bids (16 P.S. § 1802), Authority to sell or lease real property (16 P.S. § 2306), and Open meetings (65 Pa.C.S. §701 et seq.)”
BID OVERAGE ACTUALLY $25.4 MILLION. May 24. The Intelligencer Journal reports that the LCCCA bids actually put the project $25.4 million over budget. Sponsors are urged by commissioners Shellenberger and Henderson to abandon the project; sponsors vow not to “throw in the towel.”
SHELLENBERGER AND HENDERSON VOTE TO REVOKE GUARANTY IF BONDS RE-MARKETED. May 24. At its regular public meeting, Commissioners Shellenberger and Henderson vote to revoke the $40 million county bond if the LCCCA re-markets bonds to get tax exempt variable or fixed rates. The motion, introduced by Henderson, is made despite objections from county solicitor Howard Kelin.
SHELLENBERGER AND HENDERSON FLOAT ‘PLAN B’. May 24. At the same meeting as the Henderson resolution, Shellenberger and Henderson refer to a “Plan B” alternate use for the site. Marilyn Berger, a high-end Lancaster real estate broker; Lehr Jackson, a prominent developer; and William Roberts, a restorer of historic properties, were negotiating to purchase the former Watt & Shand property to convert it to condos and street-level shops. The Berger-Jackson-Roberts alliance is not disclosed at this point. The ‘Plan B’ is soon abandoned without comment.
HENDERSON PUBLICLY QUESTIONS BED TAX. May 31. At a special commissioners’ meeting in East Donegal Township, Commissioner Henderson publicly questions whether the geographic area from which the hotel and motel room rental tax was drawn is legal. “[I]t is time for the county commissioners to reconsider whether or not the entire county is the appropriate area for the bed tax,” she says at the meeting.
June – 2006
DEMOLITION RESUMES ON SITE. June 1. Demolition resumes after sponsors acquire permit. Large portions of the home and business of Thaddeus Stevens are razed. The budget gap – now more than $25 million – is still not filled.
LCCCA MEMBER HALL ASKS FOR LEGAL AUDIT. June 8. LCCCA board member, Deb Hall, introduces a motion to have a “legal audit” of legal fees paid by the Authority. The motion does not pass.
HIGH RESIGNS AS CONSTRUCTION MANAGER. June 8. High Construction Company resigns as Construction Manager of the project in order to bid for the lucrative “General Trades” contract. As Construction Manager, High Real Estate was involved in setting bidding criteria, giving the company a distinct competitive advantage when it later bids for the contract.
LCCCA VOTES TO SUE SHELLENBERGER AND HENDERSON. June 13. LCCCA board votes 4-3 to sue Lancaster County Commissioners Shellenberger and Henderson. They are joined in the suit by Penn Square Partners and RACL. An affidavit submitted by the LCCCA financial adviser says the two commissioners are creating “immediate, imminent, and irrevocable” harm to the project.
STEVENS HOUSE DEMOLITION DELAYED DUE TO PROTEST. June 15. Due to pressure from historic preservationists and project critics, a two-week delay in the demolition of the Thaddeus Stevens property is announced jointly by the LCCCA and Historic Preservation Trust.
SUNDAY NEWS BEGINS ‘COUNTDOWN’ TO END OF SHELLENBERGER AND HENDERSON TERMS. June 18. The Sunday News begins “countdown” until the end of the terms of Shellenberger and Henderson. There are 564 days remaining in the terms of the commissioners.
Also, the Sunday News editorial calls for the release of the Stevens & Lee legal invoices. “ The Convention Center Authority only gives naysayers ammunition when it withholds information on attorneys bills,” the editorial reads.
SHELLENBERGER AND HENDERSON HOLD EPHRATA PUBLIC MEETING; WIDESPREAD OPPOSITION TO THE PROJECT DISPLAYED. June 22. County Commissioners Shellenberger and Henderson hold evening public meeting at the Ephrata Public Library. Dozens of citizens speak, the majority against the convention center project. The meeting is called by the commissioners to hold a public discussion on the possibility of shrinking the geographic area of the hotel room rental tax.
COUNTY CHALLENGES BOND GUARANTY. June 27. Through the county’s special counsel, Howard Kelin, the county begins challenge of 2003 guaranty, signed by then commissioner chairman Paul Thibault. Kelin argues that the language of the bond guaranty and the Trust Indenture drafted by another Stevens & Lee attorney on behalf of the LCCCA is in conflict.
COMMISSIONERS HIRE PHILLY LAW FIRM IN DEFENSE AGAINST LCCCA SUIT. June 27. Commissioners Shellenberger and Henderson hire Philadelphia-based firm of Dillworth Paxson to represent them in the lawsuit brought against them by the LCCCA.
LANCASTER CITY COUNCIL SYMBOLIC SUPPORT OF PROJECT. June 27. Lancaster City Council votes unanimously to pass a resolution supporting a countywide collection of the hotel room tax. This is a symbolic gesture in support of the project.
SHELLENBERGER AND HENDERSON THREATEN TO REVOKE BOND. June 28. Commissioners Shellenberger and Henderson vote to officially notify the LCCCA that unless construction begins by August first, they will consider that a violation of the terms of the bond agreement and therefore revoke it.
LCCCA AUDIT: $258,000 IN THE RED. June 30. An Audit reveals LCCCA has $258,000 deficit.
July – 2006
LCCCA VS. SHELLENBERGER AND HENDERSON TRIAL BEGINS. July 12. What are known as the “Madenspacher hearings” begin, named after the presiding judge, Joseph Madenspacher.
The LCCCA, RACL, and Penn Square Partners, have sued county commissioners Shellenberger and Henderson, arguing they are threatening the project with attempts to revoke bond guaranty.
TWO HOTELS SUE SPONSORS: BED TAX UNCONSTITUTIONAL. July 12. Horst Hotels, LLC and Ephrata Motels Partners sue RACL, LCCCA, and Penn Square Partners, arguing the room tax is unconstitutional.
MADENSPACHER TRIAL ENDS. July 17.
MADENSPACHER ISSUES TEMPORARY INJUNCTIONS AGAINST COMMISSIONERS. July 25. Judge Madenspacher issues temporary injunctions against Commissioners Shellenberger and Henderson, enjoining them from tampering in any way with the county guaranty or county financing of the project.
LAST CONSTRUCTION BID OPENED. July 27. The last of the construction bids is opened, with High Construction – another subsidiary of the majority partner in PSP – the only bidder. Combined with bids opened previously, the project is at least $20 million over budget. Penn Square Partners immediately declares:
“It is unlikely that we can organize any combination of resources and strategies that will allow us to move forward with the project as currently designed.”
Another headline: “Bids doom center plans: Penn Square Partners says $20 million ‘gap too great.’”
The project is practically pronounced dead.
August – 2006
COUNTY SUIT CHALLENGING ACT 23 DEFEATED IN COMMONWEALTH COURT. August 4. The county’s lawsuit challenging the Act 23 funding is defeated in Commonwealth Court, which holds Act 23 does not violate the uniformity clause of the state constitution.
|MAYOR GRAY MIRACULOUS $20 MILLION PLAN TO FILL FUNDING GAP. August 11. Lancaster Mayor Rick Gray introduces a plan to deal with the $20 million funding gap by shifting funds between accounts, demanding over $5 million in concessions from contractors, and soliciting $3 million in to purchase an “easement” for the facade of the Watt & Shand building.
The press coverage of Gray’s ‘miraculous’ bridging of the deficit are normally used for the end of war, or mass killing, or major political assassination.
(Writes Randy Carney: “But by December of 2006, this plan had been proven to be nothing more than “smoke and mirrors,”when most of the projected savings failed to materialize. As a result, the LCCCA board is forced to increase borrowing from $42 to $64 million, bringing the total projected cost of the project to approximately $170 million.”)
LCCA APPROVES BID CONTRACTS. August 15. LCCCA approves 13 contracts in a 4-0 vote. Later that evening, the RACL board approves the same contracts.
NEW MADENSPACHER HEARINGS SCHEDULED. August 24. After meeting with attorneys for the county and project sponsors, Judge Madenspacher announces there will be hearings scheduled for September 28, 29 to address the county bond guaranty.
SHELLENBERGER AND HENDERSON APPEAL COURT DECISION. August 29. Commissioners Shellenberger and Henderson vote to appeal the Commonwealth Court Act 23 ruling to the State Supreme Court.
September – 2006
TWO HOTELS DROP SUIT AGAINST LCCCA, PSP, RACL. September 15. Horst Hotels, and Ephrata Motel Partners withdraw their lawsuit against RACL, LCCCA, and Penn Square Partners. The hoteliers wanted the tax abolished and the funds they paid refunded to them.
NEW MADENSPACHER HEARINGS BEGIN. September 28, 29. Madenspacher hearings begin again, focusing on the 2003 $40 million partial county guaranty. The county’s counsel, Howard Kelin, argues that the inconsistencies between the bond agreements renders the guaranty invalid. Counsel for the sponsors argue the agreements are substantially the same and binding.
October – 2006
WATT & SHAND LETTERS REMOVED FROM BUILDING. October 13. Four-foot high Watt & Shand letters are removed from the building.
MADENSPACHER ISSUES RULING: PERMANENT INJUNCTION AGAINST COMMISSIONERS. October 24. Judge Madenspacher issues permanent injunction against Commissioners Shellenberger and Henderson, preventing them from revoking the county’s guaranty of the project.
SHELLENBERGER, HENDERSON APPEAL MADENSPACHER RULING. October 31. Shellenberger and Henderson again vote to appeal a legal defeat. They vote to appeal the Madenspacher decision in Commonwealth Court.
November – 2006
SHELLENBERGER, HENDERSON ASK M&T BANK TO DEMAND CENTER FINANCING IN PLACE BEFORE FLOATING BOND. November 8. Lancaster County commissioners Shellenberger and Henderson write a letter to M&T Bank demanding that project developers have construction financing in place before floating the construction bond. County special counsel, Howard Kelin, gives the bank a November 15 deadline.
LCCCA FINANCIAL ADVISER: PROJECT COST NOW $165. 5 MILLION. November 16. The LCCCA financial adviser, Thomas Beckett, announces at its meeting that the cost of the project has grown $10.1 million, bringing the total now to $165.5 million.
STATE COURT REJECTS COMMISSIONERS’ APPEAL. November 22. The State Supreme Court rejects county appeal without hearing the case. They also decline to hear a companion suit filed by city resident April Koppenhaver, who is also suing regarding the city Act 23 financing.
December – 2006
LCCCA’S BECKETT: CENTER WILL NOW COST $170.5 MILLION. December 13. At a LCCCA finance committee meeting, financial adviser Tom Beckett again announces the project will cost an additional $5 million, bringing the total now to $170.5 million.
ALL THREE COMMISSIONERS PLEAD GUILTY TO SUNSHINE VIOLATIONS. December 14. After a 13-month grand jury investigation, covered breathlessly by Lancaster Newspapers, Commissioners Dick Shellenberger and Pete Shaub plead guilty to two violations of the state’s Sunshine Law related to the sale of Conestoga View. Commissioner Molly Henderson pleads guilty to one Sunshine Law violation. Shellenberger and Shaub are fined $200; Henderson, $100.
Lancaster Newspapers cover the Commissioners’ pleas like it is the ‘crime of the century.’ The credibility of the once-proud Steinman publishing empire is now permanently soiled.
LCCCA VOTES TO INCREASE BORROWING FROM $47 MILLION TO $64 MILLION. December 14. At the regular LCCCA meeting, the board votes 4-3 along city/county lines to increase borrowing limit from $47 million to $64 million. The board also votes to authorize its advisers to negotiate bond interest rates.
JUDGE FARINA ORDERS GRAND JURY REPORT SEALED FOR 20 DAYS. December 15. After the grand jury submits its report, Lancaster president judge Louis J. Farina orders the grand jury report sealed for a minimum of 20 days to allow those criticized in the report time to respond. The date for release is given as January 8, 2007.
SHAUB SAYS HE WILL RESIGN. December 26. Commissioner Pete Shaub announces he will resign his office, effective February 4, 2007, with eleven months remaining in his term. Shaub says he will return to the construction industry.
HEINKE/CONESTOGA VIEW GRAND JURY REPORT RELEASED. JAN 11. A careful reading of the final grand jury report, submitted December 14, 2006, and sealed until January 11, shows, after a 13-month taxpayer-funded investigation, no criminal charges, only two summary $100 violations against Shellenberger and Shaub, one against Henderson.
SWAPTION PROPOSAL ADOPTED BY LCCCA*. Presented by LCCCA adviser, Tom Beckett, LCCCA board votes to enter into risky interest rate agreement with Wachovia Bank. (Wachovia will be acquired by Wells Fargo the following year.)
February – 2007
COMMISSIONER SHAUB RESIGNS. February 4. Shaub is replaced by Republican Sharron Nelson, a former Manheim Township School Superintendent.
COMMISIONER SHELLENBERGER ANNOUNCES HE WILL NOT SEEK RE-ELECTION IN FALL ELECTION. February 7. Shellenberger makes his announcement in the Merchandiser newspaper in a paid advertisement.
COMMISSIONER HENDERSON ENDORSED BY DEMOCRATIC PARTY. February 10. The embattled Henderson decides to run for re-election after securing the endorsement of her party. Craig Lehman is also endorsed by the Democrats.
March – 2007
MAJOR FINANCIAL AGREEMENTS SIGNED BETWEEN LCCCA, PSP, AND RACL . March 27. The major financial contracts are codified by the respective sponsors. One of the most important, the “Declaration of Condominium,” includes the following excerpt from section 2.2(m):
“Convention Center Unit” means Unit number 1 to be owned by the LCCCA which will consist of the following areas of the Property and the Building currently constructed and to be constructed on the Property, as more specifically depicted on the Plats and Plans:
(i) All Interior areas on the Watt & Shand Meeting/Administration Level;
(ii) All Interior areas on the Watt & Shand Ballroom A Level, except the Hotel Business Center;
(iii) All Interior areas on the Watt & Shand Ballroom B Level;
(iv) Those Interior areas on the Watt & Shand Lobby Level identified as Kitchen (and notwithstanding anything to the contrary contained herein, including Kitchen equipment), Mechanical and Sound Control Room.”
This section means that the LCCCA will pay to build, own, and maintain areas which will also be used by the Penn Square Partner’s “private” hotel. Note that even though the hotel will use the only kitchen in the entire complex 80% of the time, taxpayers are being forced to pay for 100% of its construction and maintenance!
Section 5.3(a) of the Declaration of Condominium spells out how proceeds from the sale of “naming rights” for the convention center will be allocated:
“…fifty percent (50%) to the Unit Owner of the Convention Center Unit and fifty percent (50%) to the Unit Owner of the Hotel Unit.”
The “Hotel Unit” owners are Penn Square Partners.
Section 5.3(b) reads:
“S. Dale High (who may nominate High Industries or any affiliate thereof to exercise the rights granted in this Section 5.3(b)) shall have a right of first offer with respect to all Naming Rights.”
WACHOVIA LETTER OF CREDIT SIGNED. (EXPIRES IN MARCH 2012) The Lancaster County Convention Center Authority will now sell $64 million in construction bonds.
April – 2007
ART MORRIS AND RB CAMPBELL NAMED TO LCCCA BOARD. Morris is a city appointment, and Campbell, the former city Controller and a city resident, is appointed by the county.
One of the first things the new board members do is review the consulting contracts with the LCCCA board.
After reviewing these contracts, the LCCCA board severs all consultants – including Dan Logan, Maurice Walker, and Stevens & Lee – with the exception of the board’s litigation attorney, John Fenningham.
August – 2007
LCCCA EXECUTIVE DIRECTOR DAVE HIXSON RESIGNS. Art Morris becomes interim acting executive director of the LCCCA board, and also takes over as chairman from Ted Darcus. Darcus remains on the board. Morris leads the board for the next eight months.
During Morris’ tenure at the LCCCA, the Authority implements a new committee meeting policy. Now, instead of one monthly public meeting, the LCCCA holds 3-4 meetings per month. Also under Morris, the board now responds to questions from the citizens. This is the first time in the eight years of the LCCCA that the board has adopted this policy.
September – 2007
TOM LECRONE NAMED TO BOARD. Lecrone – a former interim County Administrator – replaces Deb Hall as a county appointment.
October – 2007
KEVIN FRY NAMED TO LCCCA BOARD. Fry replaces Jack Craver, who has recently passed away.
November – 2007
SCOTT MARTIN DENNIS STUCKEY, AND CRAIG LEHMAN ELECTED COUNTY COMMISSIONERS. Commissioner Henderson loses re-election bid.
January – 2008
HENDERSON FILES LIBEL SUIT. Former Commissioner Molly Henderson argues that Lancaster Newspapers acted with “actual malice” in covering her official actions as county commissioner. She files the libel suit in Chester County, an adjacent county to Lancaster. Lancaster Newspapers has a small circulation in Chester County.
WELLS FARGO ACQUIRES WACHOVIA; TAKES OVER BOND ISSUES. According to the LCCCA’s financial adviser, Tom Beckett, the new deal offered by Wells Fargo is a direct purchase agreement, in which the bank holds all the bonds. That will save the authority about $60,000 a year in remarketing fees, Beckett says.
March – 2008
KEVIN MOLLOY HIRED AS LCCCA EXECUTIVE DIRECTOR. Molloy, former executive at the Erie Convention Center, is recommended for the position by Senator Gibson Armstrong.
ART MORRIS’ PROJECTIONS DETERMINE FUNDS ON HAND INSUFFICIENT TO FINISH PROJECT. As a result of Morris’ analysis, Sen. Gib Armstrong wrests a grant from the state of $3 million.
June – 2009
CONVENTION CENTER OPENS.
January – December– 2010
CONVENTION CENTER OPERATING LOSS OF $3.96 MILLION. According to the authority’s 2010 audit, posted on its website, the authority had an operating loss of $3.96 million for the fiscal year that ended Dec. 31, 2010.
Josh Nowak, director of sales and marketing for the Lancaster County Convention Center and Lancaster Marriott at Penn Square, says between June 2010 and June 2011 there were 572 events at the “integrated facility,” involving more than 11,000 “event days” — and 272,000 people who attended the events.
And for the year 2011, revenue from the convention center alone, he says, is projected to be up 22 percent over 2010.
Molloy believes it can be made up. While the tax may be flat this year, he notes that in 2010, it was up nearly 10 percent over 2009 — although 2009 revenues were down 9 percent compared to 2008.
June – 2011
HENDERSON SUIT TOSSED. A Chester County judge refuses to hear the case.
November – 2011
LCCCA RESTRUCTURES DEBT.
March – 2012
WELLS FARGO/WACHOVIA LETTER OF CREDIT EXPIRES.
HENDERSON APPEAL FAILS. Former Commissioner Molly Henderson’s libel action against Lancaster Newspapers and former Mayor Art Morris is denied by the PA Commonwealth Court.
COMMISSIONER SCOTT MARTIN PROPOSES TO RENEGOTIATE UNFAIR AGREEMENTS. Martin’s proposal focuses on the concessions contract between the LCCCA and Penn Square Partners. A High Group subsidiary was awarded the food concessions contract at the convention center and was only required to pay 5% of revenue up to a threshold figure and 10% commission thereafter rather than standard industry practice ranging from 20% to more than 30%.
MAYOR GRAY PROPOSES RAISING TAX. The mayor proposes raising the room tax from its current 3.9% to 5%, the highest allowable under the law.
March – 2013
DEBT AGREEMENT ENDS WITH WELLS FARGO.