An amendment of July, 2016 to the prior Community Revitalization & Improvement Zone (CRIZ) legislation allows $480,000 a year in added tax rebates to Penn Square Partners.
This is despite the fact that the $480,000 is not being generated by new development as was previously required and is the point of the program.
Rather than from new development, it represents the annual amount of Sales Occupancy Tax paid by the Marriott since opening almost a decade ago.
The amended Tax Reform Code of July 13, 2016 contains the following sentence:
“The department shall not recalculate the baseline of a zone designated prior to the effective date of this subsection to include the hotel occupancy tax imposed under Part V of Article II…”
After allowing for the “double speak” (meaning the opposite of what it appears to say), this allowed the Marriott to use taxes paid for the existing facility to be credited to the amount that would be from the addition to the Marriott.
There are only three CRIZ districts so far in the state, and only Lancaster’s has a hotel that will benefit from the carve out.
The added $480,000 will support about $5 million in additional bonds with the money going to the Marriott and repayment coming indirectly from future taxpayers over as long as a thirty year term.
Penn Square Partners (PSP), the tenant and option holder on the hotel, is a partnership of subsidiaries of the Dale High Group and of LNP (Lancaster Newspapers), which in turn is owned by members of the Steinman family. As a tenant of the city agency RACL, it is exempt from city, county and school taxes. Also the hotel qualifies for tax exempt financing.
How does such good fortune come about?
Did it help that LNP is the county’s sole newspaper of general circulation?
Did it help that LNP has recently established a Harrisburg Bureau to critique the legislature and state government?
Did it help that LNP is careful not to criticize the shenanigans of the Philadelphia Inquirer and other major newspapers throughout the state?
For information concerning the alleged extraordinary cost of the addition to the Lancaster Marriott Hotel, see “How do we explain hotel rooms costing $151,900 elsewhere costing the City of Lancaster $358,000?”