Can Marriott tax exemption be legal?

I have been following with great interest the story of the new hotel having been declared exempt from property, school, city and county taxes. I distinctly remember that the tax revenues from the hotel would benefit primarily the School District of Lancaster and this was one of the prime selling points from the developers.

I really did not and truthfully could not follow all of the endless twists and turns the project took over the years but is this exemption legal?

I found a document, a legal opinion, online dated April 11, 2005 from Kegel Kelin Almy and Grimm LLP to the Counrty Commissioners that states the hotel cannot be tax exempt. Here is the link:


I and several people I know were shocked when we read in the newspaper last Friday of this exemption. No one I have talked to knew of this either.

Can you give some insight?

Editor’s response: By selling the Watt & Shand site to the Redevelopment Authority of the City of Lancaster (RACL) and allowing it to be the nominal owner and, in turn, net lease the hotel to Penn Square Partners, High and the Lancaster Newspapers were able to achieve exemption from county, city, and school real estate taxes. Of course, this was in total contradiction to earlier representations.