INTELLIGENCER JOURNAL

New Year Day editorial “2013 Wish List” urges:

“The Lancaster County Convention Center faces a debt crisis by March 1. On that date, a bond indenture agreement on $64 million in debt is set to expire. If a new agreement isn’t reached, interest on the debt could rise from 5.57 percent to 8 percent and threaten the center’s existence. Two competing plans have been offered. Hiking the hotel room tax rate from 3.9 percent to 5 percent — which would increase room rates by $1 — is the most logical.

“The convention center had a good month in November and more weddings and special events have been booked for 2013. But the uncertainty surrounding the bond debt is depressing sales efforts. It’s time for local officials to agree on a plan and negotiate with bankers to restructure the debt. The convention center survived the worst economic crisis in this country since the Great Depression. It has attracted tens of thousands of people to the city and county since it opened in 2009. It would be a tragedy if, on the cusp of an economic recovery, it couldn’t operate because local officials didn’t offer a unified plan to move forward…”

WATCHDOG: They are a week late.  What they are asking for from “local officials” can only come from Santa, not the County Commissioners or the impecunious City of Lancaster.

The Lancaster Newspapers ignored warnings and ruthlessly  rammed the project down the throats of a skeptical public who, when polled, 78% objected to any government guarantees.

As the Convention Center goes, so goes the Marriott Hotel, ‘co-owned’ by Penn Square Partners, in turn owned through subsidiaries of the Lancaster Newspapers, Inc. and S. Dale High’s Group.

A couple of months ago County Commission Chair Scott Martin proposed a very reasonable approach, with Penn Square Partners giving up part of its ‘ill gotten gains’ from outrageously one-sided agreements with the Convention Center Authority for sharing revenues and expenses, the City making a modest contribution, the Tourist Bureau also taking a hit, and Wells-Fargo providing fairer interest rates.  (They are to get 8% interest when the market is more like 3%?) The parties failed to cooperate.

The original financing by Wachovia Bank which bank was acquired by Wells-Fargo contained outlandish terms and penalties.  LNP, High and others reaped huge immediate rewards through the development of the Project so they apparently didn’t give a damn about predicted future ramifications.  The public is now stuck with the costs and proffered the bill to avoid an imminent disaster.

The county has guaranteed a portion of the debt service due to a devious action by earlier outgoing commissioners in anticipation of  in-coming commissioners Pete Shaub, Dick Shellenberger,  and Molly Henderson.  Nevertheless, we implore the Commissions to follow a path of benign neglect.   Let those who foisted the project on the public stew in their own juice.  They’ll come up with some sort of resolution.  Or they should pack their bags and move out of town because their name will be mud.

Incidentally, we do not buy into the contention that the Project has benefited the county.  Any plus to downtown has been largely offset by the displacement of business from the resorts and hotels on Rt. 30 East.   Furthermore, the Convention Center took the place of the originally proposed and sound concept of a mixed use condominium development.  Instead of expanding gentrification along Queen Street, the Convention Center across from the Newspaper building creates an almost pedestrian free block and thus an obstruction to residential growth southward.