By Christiaan A. Hart Nibbrig
“I am behind the convention center. However, I am opposed to the county insuring the bond. I campaigned on that.”
—Richard “Dick” Shellenberger, Republican Lancaster County Commissioner candidate , one week before the November 4, 2003 election
The campaign for Lancaster County Commissioner in 2003 had three extraordinary events occur before election day—one in view of the public, another behind closed doors, and one that was both.
All three events would define the political fortunes of the next board of commissioners, and would change the future of Lancaster County.
Third party candidate Jim Clymer’s entrance into the race made each debate, mailer, and public appearance at least partially about the convention center project.
A conservative and homespun lawyer, Jim Clymer, the former Constitution party candidate for statewide office and national chairman, had sufficient funding and was an effective, if low-key, campaigner. Clymer received considerable press and was a significant factor in the race. Clymer’s campaign also had Ron Harper, Jr., a ‘super-supporter,’ who contributed his own radioactivity to the campaign.
Underscoring Clymer’s importance to the race, late in the campaign, the Sunday News ran a front page article with the headline, “Clymer Calls Election Tune: Constitution Party candidate defines issues in commissioners’ race; now both major parties fear he stands a chance”.
The campaign between the Democrat candidates and Clymer for the commissioner seat reserved for a minority party—a campaign dominated by the convention center issue—was the extraordinary event unfolding in full view of the public.
Meanwhile, away from the public eye, the two Republican commissioner candidates, Pete Shaub, an incumbent, and Dick Shellenberger, were quietly engaged in regular, private meetings with Lancaster County solicitor, John Espenshade. Espenshade, the county solicitor for more than 15 years, was also solicitor for the Lancaster County Convention Center Authority (LCCCA), and a partner of the powerhouse Stevens & Lee law firm. In turn, Stevens & Lee also represented High Industries, lead partner for Penn Square Partners and designated developer of the convention center. They were High’s registered lobbyist in Harrisburg.
The topic of the meetings—which continued privately among the three after the election and before Shellenberger took office—concerned the possible sale of the county owned Conestoga View Nursing Home
After the primary, Republicans Shaub and Shellenberger were ‘shoe-ins’ for election. The pair campaigned on a platform of reduced government and increased privatization. Divesting of a government-run facility like the nursing home was consistent with their stated political philosophy at a time when President George W. Bush was advocating the privatization of Social Security. But they didn’t mention that Conestoga View would be put up for sale until a deal was formally proposed in public at a Commissioner’s meeting.
These meetings, and the eventual sale of Conestoga View, would play a role in killing the political careers of Shaub and Shellenberger; in fact, they would contribute to the political demise of the entire next board of commissioners.
In order to build something like a convention center, which was then estimated to cost $55 million, the money must be borrowed. Not many people pay attention to the world of municipal bond finance, yet this is the mechanism used to finance many of the capital projects built in the United States.
A government entity, in this case the LCCCA, must therefore “float” or “issue” or offer the bonds for sale. A bank usually buys the bond issue, and re-markets the bond to investors. (The interest on the bond may also be tax exempt.)
In order to maximize the amount and get lower interest rates for what is essentially a loan, bond payments are often guaranteed by some level of the government. The interest rates are lower because of the government’s usually good credit rating. (Lancaster County had a desirable “AAA” credit rating.)
The possibility that the LCCCA might ask the county to guarantee a bond issue was initially raised in the spring of 2003 by a city businessman named Chris Kunzler, III.
Kunzler, the CEO of a large, Lancaster city-based hot dog and deli-meat business, Kunzler & Co., was smart, ‘didn’t have a dog in the race,’ and he was not a hotelier.
In an April 20th published Letter to the Editor of the Sunday News, Kunzler publicly raised the issue that a government guaranteed bond would 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?”
Jim Clymer’s explanation for entering the race—that no other candidate was addressing the convention center issue—was not entirely accurate. While he was the only person in the race who rejected all aspects of the convention center, in the spring of 2003 and before the May primary, one other candidate was on the record critical of increased government involvement in the project.
Democrat candidate Molly Henderson was the first in the race to address and oppose the idea of county backing of a bond. She said that although she favored the center, it should be “self-supporting” and not reliant on government backing.
In late September, Clymer even proposed a county-wide referendum on the issue.
In the fall of 2003, the convention center was anything but a ‘done deal.’ The design and cost for the center were not finalized; no true feasibility study had been performed; the state had yet to disburse any money; not a spade of dirt had been turned; and Clymer’s candidacy showed that many people throughout the county were strongly opposed to the project.
During the fall campaign, five of the six candidates (the Green Party had qualified a candidate, Scott Kender) went ‘on the record’ opposing any county guarantee of a LCCCA-issued bond to construct the convention center. Only Democrat, Bill Saylor, was non-committal on the bond guaranty
Paul Thibault, the Republican, lame duck, Chairman of the Board of Commissioners, may have been alarmed by the prospects of the next board opposing a guarantee. Events proved he certainly was constrained by it.
Thibault, with his silver Kennedy coif and silver-tongue, was the rarest of Lancaster County political insiders—an insider who was not from the county. Thibault, Connecticut-born and raised in Canada, was two times denied the Republican Party endorsement for commissioner, yet managed to be elected to consecutive terms.
A day-one supporter of the convention center project, Thibault was also the beneficiary of substantial campaign contributions from the Lancaster Alliance, the private, non-profit organization, three of whose founding 12 members made up Penn Square Partners. Every time Thibault ran, he collected the most money.
The bond issue had been discussed in candidate debates and in the newspapers (both dailies supported the bond guaranty), but the Commissioners had not officially deliberated on the matter. But on October 16, 2003—even without a request from the LCCCA—Thibault and the board voted to hire bond counsel to explore a county guaranty.
“Something doesn’t smell well in Denmark,” said Jim Clymer at the crowded meeting, raising the question of how the board could hire counsel unless it had—outside of public view—discussed the official action privately.
Only six days later, on the 22nd of October, the commissioners held a public meeting to discuss the bond guaranty. Then just one week later, in the form of County Ordinance 73, the board of commissioners, in a 2-1 vote (Shaub voted against) passed the bond guaranty of up to $25 million.
It was less than a week before the election.
If the Convention Center Authority couldn’t make its payments, the Lancaster County taxpayers would be responsible for the bond debt.