The Convention Center has indeed failed

The people behind the downtown Lancaster taxpayer-financed hotel and convention center project have been EXTREMELY aggressive in bringing business to their facility.  Consequently, the project has not yet “failed miserably”.

But it has indeed failed.

In 2010, the convention center LOST just over $1,400,000 taxpayer dollars to bring in more than $1,300,000 in revenue.  This might not be so bad if it would have created an even greater amount of economic development, but where is it?

Since the project’s construction bonds were sold in March of 2007, many more businesses have closed or moved out of downtown Lancaster than have opened. The only direct benefit to taxpayers has been the construction of a new Subway restaurant across King Street from the hotel.  Other businesses may have benefited in some ways from the project, however many downtown Lancaster merchants complain that their business drops off substantially whenever a sizable convention is in town.  And the first and second blocks of East King Street – in the shadow of the hotel tower – are still an economic disaster area, with more vacancies than occupied properties.

Meanwhile, the School District of Lancaster is facing ever increasing deficits.  Because the Penn Square Partners refuses to pay real estate taxes on their “private” hotel (with their building owned by Lancaster City), property owners in Lancaster City and Township are now paying more than they would be had the Penn Square Partners kept their word.

This project has clearly failed to keep its promises to local taxpayers.

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Updated: February 12, 2011 — 7:48 am

2 Comments

  1. If the convention center were a business, it would be reporting that during 2010 it lost $1,400,000 on revenue of $1,300,000, with operating costs the total of both. The tragedy is that taxpayer dollars seem to be considered somehow different than business dollars.

    Meanwhile, the Penn Square Partners keep their revenue figures a closely-guarded secret, even though they are operating rent-free in a taxpayer-owned building. They are paying down a $24 million construction bond for their building, in addition to their initial $11 million “equity” investment to furnish and equip the hotel. The total cost of the hotel building was in excess of $76 million, with taxpayers funding the balance.

    That’s not all.

    Adding insult to injury, the hotel receives ALL revenue from the third and fourth floor ballroom and meeting rooms, even though these spaces were built and are being maintained by taxpayers. Many events have already been held in the “convention center” where the organizers and attendees had no idea that their money was going directly to the Penn Square Partners.

    But wait, there’s more!

    100% of the hotel’s kitchen was built and is being maintained by taxpayers, as is the connection between the parking garage and the hotel lobby, half of the hotel lobby (including the piano!), and portions of Interstate Hotels and Resorts’ offices. The public also has total responsibility for both the Queen Street lobby and the Vine Street lobby.

    All of these – and much, much more – are a part of the agreements negotiated by Stevens & Lee with the Penn Square Partners on behalf of the Lancaster County Convention Center Authority (taxpayers).

  2. Because I am a young’n, I do not remember much about the public outcry when the plans for this convention center were unleashed by our local government.

    If I am understanding correctly, this building was built with taxpayer dollars under the premise that the center would bring business for the city in exchange? After reading the comment before mine, it seems that for some reason Penn Square Partners were given a contract funded by taxpayer dollars in order to open up their business and proceed to collect the revenue while the public pays the upkeep. How outrageous!

    I’d like to see how much the CEO of Penn Square Partners is raking in as the public sees their money funneled into (presumably) his pockets. I can’t believe that no there was no organized public outcry to stop this obvious corporate cronyism.

    Where’s the outrage?

    EDITOR: There was and still is.

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