No one outside of the Penn Square Partners knows if the Marriott hotel might be facing a financial crisis. In spite of the fact that they are occupying a taxpayer-owned building with their only “rent” payments toward about 1/3 of the total construction debt, and receive far too much of their revenue from taxpayer-owned ballroom and meeting spaces, their financial results are a tightly-guarded secret.
The way that the convention center financing deal is structured, it cannot default. For starters, the managers of the construction debt have a lien against the full revenue of the “hotel tax”. And former Lancaster County Commissioners irrevocably guaranteed $20 million of the $63+ million construction debt. The question is, WHICH $20 million is guaranteed by Lancaster County taxpayers? In the unlikely event that the total revenue from the “hotel tax” cannot meet the convention center’s debt obligations, there can be no doubt that Lancaster County taxpayers will be expected to make up the difference.
Several years ago, the Penn Square Partners issued a publicity pamphlet called “What’s The Risk?”. It might be worth reviewing, since it looks like its predictions may indeed be coming true.
