(Eighteenth in a series)

“I don’t believe in serving on boards where I am not wanted.”

– John Fry, then President of Franklin & Marshall College, in his letter of resignation from the Convention Center Authority board to Commissioner Dick Shellenberger, 2005.

“Quite simply, the Convention Center Authority was the worst organization I have ever encountered, let alone been a part of. It is very clear that the Authority had no regard for the source of its revenues, the taxpayer.”

– Laura Douglas, appointed by Lancaster County Commissioners Shellenberger and Henderson in September 2005, referring to her service on the Convention Center Authority board of directors

In September of 2005, the Lancaster County Convention Center Authority (LCCCA) board of directors would have been firmly counted in the sponsors’ column.

At the LCCCA’s inception in September, 1999, both the County Board of Commissioners and the Lancaster city mayoralty were controlled by strong supporters of the project. This meant that sponsors were able to name all seven members to the LCCCA board. And the decisions the board made consistently reflected the sponsors’ positions on the project.

In 2003, as LCCCA terms ended, Commissioners Thibault and Shaub, and Mayor Smithgall, were again able to appoint or re-appoint those who reflected their support of the project. According to the enabling County Ordinance 44, the LCCCA terms were two, three, and four years in duration.

One problem the sponsors did not anticipate until 2007 was the composition, and cooperation, of the LCCCA board.

In 2007, the ’swing vote’  would revert to the County – now effectively Shellenberger and Henderson. That was when the sponsors expected the county would pose a problem to the LCCCA board.

It happened earlier than the sponsors anticipated.

On, September 1, 2005, the three county-appointed board members were: Judy Ware, John Fry, and Garth Sprecher.

Ware was a former art teacher and a philanthropist whose four-year term was ending on September 15, 2005. During her time on the board, Ware was regarded as an enthusiastic supporter of the project. Although Ware and the sponsors of the project wanted her to be re-appointed to the LCCCA board, Shellenberger and Henderson chose to replace her when Ware’s term expired.

Ware’s replacement on the LCCCA board was Laura Clampitt Douglas, a tough, smart, Texas-born businesswoman who didn’t suffer fools. At Douglas’ first LCCCA board meeting, she peppered then-board chairman, Ted Darcus, and executive director, Dave Hixson, with questions and comments on bills the board was paying. Normally, the board paid the bills without discussion.

John Fry was then president of Franklin & Marshall College, the private, liberal arts college located in the northwest section of Lancaster city. In 2003, Fry was appointed to replace Jim Pickard on the LCCCA board. Pickard’s second term had begun 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 in 2003.)

“We are lucky to have someone of John Fry’s caliber on the board,” said a beaming (soon to be ex-) Commissioner Paul Thibault, announcing Fry’s appointment, in October, 2003.

Fry, like Judy Ware, was known as a committed supporter of the downtown project.

It was assumed Fry’s term ran until 2007. However, when Fry was named to the LCCCA board at a regular Commissioners’ meeting in 2003, it was recorded in the minutes of the meeting that his term would end in 2005. A letter sent to Fry confirming his appointment transcribed the error from the minutes, with the letter also stating that the term would end in 2005.

One afternoon in late September, 2005, with these two documents – the minutes and the letter – Commissioner Shellenberger brought County Treasurer and fellow Republican, Craig Ebersole, to meet with Fry. Shellenberger showed Fry the letter and minutes indicating his term was expiring. The next day Fry submitted his resignation to the County Commissioners.

“I don’t believe in serving on boards where I am not wanted,” Fry wrote 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 appointed Deb Hall, president of the Ephrata Chamber of Commerce, to replace Fry on the LCCCA board. Like Douglas, Hall was intelligent and tough-minded. If anything, she had a harder edge than Douglas, and she, too, had questions about the project.

In October of 2005, businessman Garth Sprecher, was one of only two original board members still serving on the LCCCA board. Citing fatigue, Sprecher announced he was resigning from the board on October 15.

“Don’t read anything into this,” Sprecher said of his resignation at his last LCCCA meeting. “I’m just tired.”

Sprecher’s seat was temporarily filled by Timothy Lease, general manager of a large Mountville motel. Lease resigned suddenly after less than a week due to personal issues. He was replaced weeks later by another Shellenberger and Henderson pick, Jack Craver. Craver was 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.

The changing face of the Convention Center Authority board meant that the days of unquestioned ‘rubber stamping’ of agreements and consultants’ fees were coming to an end. If the LCCCA board was going to debate amongst itself about documents and invoices, then the project could be delayed, perhaps even terminated.

The addition of county appointees Laura Douglas, Deb Hall, and Jack Craver to the LCCCA also promised to make it a much more confrontational board.

“We selected these people because they were going to ask questions that we were not getting answers to,” said Shellenberger. “We hoped the [LCCCA] board would answer their questions.”

The LCCCA board that Douglas, Hall, and Craver joined was led by Chairman, C. Ted Darcus.

If former County Commissioner Paul Thibault (an academic raised in Canada) was an unlikely player in insular Lancaster politics, Ted Darcus was an even rarer find. Darcus, short, black, and Republican, who grew up in Fairmount, West Virginia, found himself, in late middle age, something of a political powerhouse in the city of Lancaster, Pennsylvania.

Before coming to the LCCCA board in 2003, Darcus was president of the Lancaster City Council. In 1999, Darcus voted with the majority of city council to establish the LCCCA.

Darcus, the longtime executive director of the Boys & Girls Club of Lancaster, was also closely involved in the building of the new Bright Side Baptist Church in Lancaster city. Bright Side, founded in 1980 in Lancaster city, is a large Baptist church and community center that currently leases space to a branch of Fulton Bank within its walls.

Bright Side, in its new, $5 million facility built in 2003 on the corner of Hershey and Wabank Avenues, 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.

A clue to Darcus’ seeming change in disposition on the LCCCA board can be found on one wall of the large, full of energy Bright Side center. On that wall, one will see plaques listing the major donors for the new Bright Side, including High, Buckwalter, and Fulton.

Some critics have wondered whether Darcus, a leading fundraiser for Bright Side, was influenced in his actions on behalf of the convention center project by the substantial financial donations to Bright Side from project sponsors.

On January 12, 2004, the 63 year-old Darcus was voted by his fellow board members chairman of the Convention Center Authority board.

Darcus seemed 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 – went unanswered.

Ted Darcus could be a rude and belligerent chairman. Darcus had a habit of intentionally looking down at his desk when a member of the public was speaking, often pretending to read or write while citizens tried to make their points. Questions from board members were openly discouraged.

With Darcus as Chairman, no LCCCA committee met on a regular basis.

Rodney Gleiberman, general manager of the Continental Inn and a plaintiff in lawsuits against the LCCCA, and who attended dozens of meetings chaired by Darcus, had this blunt assessment of the Chairman:

“Ted Darcus was a hot-headed, dimwitted, single-minded presence on the Authority board. The man has very poor communication skills. While these might be tolerated qualities in a private company, they are totally inappropriate for running a ‘public’ entity. He was an embarrassment as chair of the LCCCA board of directors.”

Laura Douglas, the businesswoman appointed by the County Commissioners in September,2005, and who served until 2008, said of her time on the LCCCA board:

“Quite simply, the Convention Center Authority was the worst organization I have ever encountered, let alone been a part of. It is very clear that the authority had no regard for the source of its revenues, the taxpayer. … Mr. Darcus was a very strongly divisive force on the board. He was blinded by certain issues, and instead of considering them, would go ahead and move forward.”

The other three city appointees were notable for not being noticed.

Willie Borden Jr. was the only original member still on the LCCCA board. Borden, a journeyman electrician with power company PP&L, barely spoke at the meetings, and almost never voted against Pickard and the majority of the board. His was a dependable vote. Borden held the board position of Treasurer.

Dave Schwanger owned a successful heating oil company with his brother. In 1998, Schwanger was recruited by Sen. Gib Armstrong to run against Rep. Mike Sturla for Sturlas’ seat in the state legislature. (Schwanger was trounced on election day; Armstrong won easily). Schwanger was also close personal friends with project sponsor, Lancaster Mayor Charlie Smithgall, who named him to the LCCCA board. Schwanger was even less noticeable on the dais than the practically mute Borden. He, too, voted with the other city members en bloc.

The fourth member of the city’s LCCCA appointees was Joseph Morales, a native of Brooklyn who came to Lancaster during his teenage years in 1978. Morales worked as an instructor and administrator for IU13, an education services organization that serves public and private schools in Lancaster and Lebanon counties. Morales was more vocal during public meetings than either Borden or Schwanger, occasionally commenting on an agreement, or making a statement, but, he like the other city appointees almost never broke ranks when it came time to vote.

(Since leaving the LCCCA board in 2007, Morales has been the well-paid executive director of the controversial Lancaster Community Safety Coalition [LCSC], a privately-owned organization that has hundreds of surveillance cameras throughout downtown Lancaster. The LCSC is a subsidiary of the Lancaster Alliance, the organization founded by Dale High, Rufus Fulton, Jack Buckwalter, and nine others in 1993.)

So while the city appointees, with the exception of Ted Darcus were not demonstrative, and none had expertise in the hotel or convention center industry, there was little question how the city’s appointees saw their roles on the board.

The schism between the city and county appointees on the LCCCA board was used by supporters of the project as an example of the County Commissioners’ supposed anti-city bias on the project.

“I always had a problem with the idea that I was ‘anti-city,” Shellenberger said after he left office. “I was very familiar with the city, and I wanted to do what was best for the city. We [the Commissioners] supported Clipper Stadium, invested in the Northwest Corridor, and other important city projects. Again, the convention center involved county taxpayers’ money, and we didn’t want the public’s money wasted, or poorly spent.”
The LCCCA had two more people on the board who would have to be considered in the sponsors’ camp.

One was David M. Hixson, the board’s Executive Director. Hixson was the third Executive Director hired by the Authority. The first was Pickard, who was both Chairman and acting Executive Director at the board’s inception in September, 1999. Pickard stepped down as Executive Director in the spring of 2002, and Michael Carper, a former banker and property manager with hotel executive experience, was hired shortly afterward to replace him.

Carper quit suddenly after just six months on the job. The circumstances of Carper’s departure were sealed in the confidential termination agreement between Carper and the Authority.

Hixson was hired in the summer of 2003 to oversee the Authority’s day-to-day activities and manage all phases of the project – contracts, construction, personnel, bill paying – from the Authority’s position.

The round-faced, bespectacled, Hixson wasn’t a particularly articulate or dynamic speaker. Hixson had no experience in either the hospitality or convention center industries. Most of his former positions were as a political press spokesperson. He had a supervisory position with the department of labor in the Ridge administration before coming to the Authority.

Hixson didn’t appear to grasp some of the more complicated details of the project, seeming rather lost at times during meetings. But whatever ability Hixson lacked didn’t discourage Jim Pickard from recommending him. On that basis, Dave Hixson was hired for the $80,000 a-year (plus benefits) position. One month after Hixson was hired, Pickard resigned from the board.

When either Ted Darcus or Dave Hixson had a question, they would look to the end of the dais for the answer. Seated there, as he had since the first LCCCA meeting in 1999, was a quiet, suited, bespectacled, middle-aged man intently monitoring each meeting. This was John Espenshade the LCCCA’s solicitor of the law firm of Stevens & Lee.

Although the LCCCA board was divided 4-3 in favor of the sponsors, with Hixson and Espenshade, it was more like a 6-3 division, with the sponsors controlling the Executive Director, Chairman, and Solicitor positions.

Whether it was a one vote, or three vote advantage, for the time being, sponsors of the project clearly controlled the LCCCA board. Holding that advantage would not be easy.

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Chapter Nineteen: Witch Hunt

“Yes, Lancaster County is only liable for $20 million of the $64 million in [Convention Center] construction bonds. But that does not tell the whole story.

“If ‘hotel [room sales] tax’ proceeds fall short of the amount needed to make construction bond payments, Lancaster County government is liable to make up the difference. About the only way that would happen is if hotel occupancy would collapse to about half of its current level; since ‘hotel tax’ collections have only slipped a few percentage points during the worst recession in decades, that is not likely to happen.

“*But what about the OPERATION of the convention center?* This is the issue that Craig Lehman has failed to address.

“It is obvious that the operational budget for the convention center is woefully inadequate. It is already clear that the convention center will need to generate more revenue than anticipated by the “pro-forma” estimates to make ends meet. This will be difficult, especially since utilization of the LCCCA’s spaces is booked at not much more than half of pre-opening estimates. And no major trade shows have been booked beyond the spring of 2010.

“Note that the LCCCA does NOT have any taxing authority; only the County Commissioners can raise taxes. Yes, the LCCCA can legally take the share of the ‘hotel tax’ that currently goes to the Pennsylvania Dutch Convention and Visitors Bureau. But would the County Commissioners willingly let the PDCVB lose such a large part of its funding? Especially since the ‘hotel tax’ funds the three full-time PDCVB employees whose job it is to promote the hotel and convention center.

“What will happen when the convention center needs additional funds to pay for its unanticipated operational losses? Would the County Commissioners really allow the convention center to close when it runs out of money?

“*Of course not.*

“Craig Lehman’s promises will quickly be forgotten, ignored, or rationalized when the LCCCA eventually is forced to come begging for more money.

“I challenge anyone to ask Craig Lehman exactly what he will do when the LCCCA needs additional operating subsidies. It will be interesting to see what kind of spin he puts on that answer.”

The Editorial on Saturday’s Lancaster New Era “Jewel in crown of downtown” goes on to gush: “The convention center/hotel is billed as a top-notch, one-of-a-kind facility, and it does not disappoint.”

Time will tell whether or not it will “disappoint.” The same things were reported upon the opening of the Hilton Hotel in Lancaster Square some decades ago. But because of a paucity of hotel demand in downtown Lancaster (which still exists), it soon had to be taken over by its lender who could not find a buyer for decades and then sold at a tiny percent of the original cost. The Hilton, later called Ramada, and now The Brunswick, never has come close to meeting its expectations.

As for retired Fulton Bank former CEO Rufus Fulton possessing the “vision,” let’s just say that Fulton Bank was content to be a 10% part of Penn Square Partners when they were planning a $40 million improvement. As the project changed and grew towards $180 million, the bank appeared a hostage and ceased to invest further. It allowed its share in the limited partnership to shrink. Finally they were able to sell out to High and the Newspapers.

Furthermore, we suspect that the newspapers also got taken for a ride. However, their executives just weren’t smart enough to take notice. Moreover, they ‘whored’ their news departments which have not recovered the public’s confidence

Meanwhile Dale High’s firm raked in lavish development fees and got quasi-competitive construction and construction management contracts, first dibs on naming rights, along with eventual half ownership of a hotel underwritten by grants, real estate tax exemptions (despite PSP’s promises to the contrary), and city tax payers guarantees. Despite representations by PSP of having made a major investment, most of the so called investment is simply future payments out of anticipated revenue for debt service on the bonds.

Only time will tell whether the Marriott will be Lancaster’s “jewel” or a few years down the road a “thorn.”

Nevertheless, we wish the Marriott and the Convention Center well. After all, it is we taxpayers who have most of the skin in the game.

[Kevin] Molloy says people who come to the convention center are part of the “rubber-tire market” that lives two or three hours away and can drive here at a time when many people are cutting back on travel expenses.

Could someone explain this to me? I thought it was meant to be a convention center. Now it’s limited to people who live two or three hours away?

Why would they come to a convention center?  For what events?

In response to “COMMENTARY: Where the rubber hits the road”:

Well…just because it is now open, doesn’t make it ‘right’ for Lancaster City or County taxpayers, especially in the years ahead. We can only hope (and pray!), that things go better than anticipated (which would be a first), and that we don’t have to address a misguided albatross down the road.