It was one of the most extraordinary public meetings in the Watchdog’s long memory…anywhere. The purpose was to hurriedly approve the restructuring of the Convention Center debt and additional borrowing of $750,000 through an arrangement with Wells Fargo to purchase all outstanding bonds and become the bond owner rather than the bond guarantor.
Wells Fargo is the successor to the Wachovia Bank which had guaranteed the issuance of ‘low floater, tax exempt’ bonds through a Letter of Credit not very long before the banks rapid financial decline and ‘shot gun’ marriage to Wells Fargo. The term of their guarantee was five years and the reason given for immediate approval of the restructuring was a September 1st deadline for important Authority action, although the guarantee remains in place until March, 2012.
The high price this is costing the LCCCA; its need to postpone a payment of principle under its current loan agreement; the unusual short term of 18 months of the loan agreement extensions; the financial condition of the convention center; the implications for the future; the flatness of revenues from the county hotel room sales tax and causes; the ‘usurious’ default rate (prime plus three -on tax exempt financing) facing the Authority if restructuring did not take place; the cavalier treatment of the Authority by Wells Fargo both now and potentially repeatedly over the next thirty-five years … all unfolded over the course of the hour and a half formal meeting and private discussions among board members and participants that followed.
Chairman Kevin Fry was generous in allowing members of the audience to participate in the discussions, even allowing them to question and engage in dialogues with board financial consultant Thomas K. Beckett, Jr. Beckett had also been the adviser on the initial financing of the convention center.
Audience members were few but those participating were an informed and outspoken group: Randy Carney, perhaps the foremost scholar of the convention center project; Peter Chiccarine, a principle in the Eden Resort and Fulton Steamboat hotels; Steven J. Geisenberger, CPA, CVA who has advised the financial committee; and Robert Field, a. k. a. the Watchdog, an investor builder and also the publisher of NewsLanc.
Covering the event for the Lancaster Newspapers, Inc. was Bernard Harris, who appeared to be trying to avoid noticing the highly newsworthy information being exchanged among participants in his presence.
Field told Harris that NewsLanc was going to hold off writing its full report of the revelations until after the Intelligencer Journal / New Era had an opportunity to publish its article. The public can measure how far the Lancaster Newspapers, Inc. has recovered from its past biases and lapses by how candidly it reports on revelations of the meeting.