CC Authority to Revisit Naming Rights Contracts

In a surprisingly welcome moment during Thursday afternoon’s Public Relations, Marketing, & Hospitality Committee meeting of the Lancaster County Convention Center Authority, Interim Executive Director and Chair Art Morris announced that the Authority will revisit the controversial contract that awards certain naming priorities to the Convention Center to S. Dale High and shares 50% of the resulting revenue with Penn Square Partners.

“The idea, really, is that, we have an agreement that covers this and we haven’t really moved forward in looking at the issue in a complete way,” Morris began.

Joe Morales agreed, “Certainly a closer look will have to be taken at this document” and explained, “For those unfamiliar, we have what is called a Condominium Document that was drawn-up very early on in the preparation of this project. And I think I’ll be as diplomatic as I can in saying that there are a couple of provisions of this agreement that I think are not entirely in the best interest of this authority.”

Morales then proceeded to read section 5.3 of that agreement, including the provision S. Dale High “shall have the right of first offer with respect to all naming rights.”

But Morales hesitated. “As far as I’m concerned,” he said, “we’re fairly well bound by the legality of this document.”

He continued, “I think that it will only by the – what’s a good word here, largesse – of Mr. S. Dale High that any changes are made or even entertained so I would encourage this Board and this particular committee to enter such conversations with Mr. High to maybe allow this authority a greater deal of flexibility in negotiating naming rights.”

“Any other comments before we open the floor?” Morales asked.

“No,” Laura Douglass said through clenched teeth, drawing laughter from the Board.

Then Lancaster City resident Randolph Carney arose and said: “I recommend to this committee that you do not sell the naming rights. I know money’s an issue, but of all the agreements, this is one of the worst. And it is to the great disadvantage of the taxpayers of Lancaster County. There is nothing in that agreement that says you must sell the naming rights…Just drop it.”

Board member R.B. Campbell, in attendance but not on the Public Relations, Marketing, & Hospitality Committee, disagreed with Morales’ earlier statement, saying, “I don’t think it’s appropriate for us to assume that this is a legally binding contract. None of us here are attorneys. I’m not saying it’s not, but I think it certainly needs to be looked at by an attorney who has appropriately research this issue. Number 2: this agreement was entered into a number of years ago and very few of the current board members were present when this one negotiated.”

Campbell went on to say: “I think, at a minimum, we need to know who represented the Authority, in negotiating this particular issue. and we need to talk to that person to get their best recollection of how the negotiations took place, and that may shed some light on this.”

Morris stressed that “No decisions have been made. This is just a beginning point that, between meetings, we can look at the issue and come back to another meeting with a recommendation” He said he would consult with Authority Solicitor Chris Hauser on the issue.

Douglas suggested that Tom LeCrone be the member who is appointed to assist Morris in revisiting these contracts with Penn Square Partners.

Earlier in the meeting, Morris had stated:

“It was several years ago looked at and my understanding was that there was a sense that maybe there was not a significant opportunity for revenue. But I don’t think the board in the recent year or so has really looked at this issue and decided how to go forward with it. One of the things that has been discussed in the past, and I think that most people who come to these meetings regularly, at least, and those on the board are well aware of, is that the revenue from naming rights are shared 50% between the unit owner of the Convention Center and the unit owner of the Hotel. Consequently, the idea of putting this out today was to get direction from the Committee and at least ask the Committee and others present whether you would consider recommending to the board the name of a board member – appointing somebody that could actually meet with me between meetings and one of the things I would suggest that we do initially is meet with the other party that would receive some of this revenue to start talking about how we could begin to look at this issue, whether it is a revenue opportunity and, if so, how can we work together with the other party to share the costs of looking at it and it requires hiring somebody to help us but it would be done in a shared-cost way.”

Surprisingly, the suspect contractual arrangement whereby Penn Square Partners would receive half of any additional grants to the Convention Center was not discussed.

Earlier in the meeting, the Committee heard an update on marketing and sales efforts from Josh Nowak of Interstate Hotels & Resorts and Chris Barrett of the Pennsylvania Dutch Convention & Visitors Bureau. Nowak announced that there are now five event bookings, some which will bring approximately 3,400 people a day to the city.