By Christiaan Hart-Nibbrig
Lancaster Mayor Charlie Smithgall had no doubt which way the Lancaster County Commissioners were going to vote on establishing a hotel room tax and a convention center authority.
Three weeks before the September 15th vote, during a Lancaster City Council meeting, Mayor Smithgall nominated three people to sit on the not-yet-formed, seven-member Lancaster County Convention Center Authority (LCCCA) board of directors.
If the tax passed, both the City Council and the County Commissioners would also need to approve the formation of the convention center authority board to administer the center.
“This is really a no-brainer,” Smithgall said to the Intelligencer Journal, on August 24th. “I don’t think it’s going to be real hard to get the votes. This is such a big win for the city.”
At the City Council meeting, where a “first reading” of a bill establishing the convention center authority was read, City Council President Ted Darcus did not allow public comment.
Smithgall nominated to the board of the LCCCA :
- Christina L. Hausner, a local attorney and member of the Lancaster Bar Association’s board of directors. Hausner was also on the Mayor’s Citizens’ Advisory Committee for community development block grants. A Smithgall political ally, Hausner was the chairwoman of the Lancaster City Republican Committee in the early 1990
- Willie Borden, Jr., an electrician with PP&L (Lancaster County’s energy provider) and president of a local Elks Lodge.
- E. Bradley Clark, a vice president of the parent company of Dutch Wonderland, a large suburban Lancaster amusement park. Clark was a member of the Lancaster Campaign.
On September 10th, less than one week before the County Commissioners were to vote on the room tax and setting up the authority, the Commissioners were notified in a letter that such action violated Pennsylvania law, and, if passed, could result in a lawsuit against the county.
“The [Convention Center] Act is not applicable to Lancaster,” warned Christopher C. Conner, an attorney with the Harrisburg-based law firm of Mette, Evans, & Woodside, on behalf of the Lancaster Host Hotel and Conference Center.
Conner seemed to have a sound legal argument. Section 13102(c) (1) of the Act was unambiguous. It reads:
“This Act shall not apply to a county which has an existing convention center which covers an area of more than 40,000 square feet.”
The plaintiff Host Hotel, located just five miles from the proposed site, had 72,000 square feet of convention center space. Additionally, noted Conner, privately-owned Franklin & Marshall College also maintained a facility of more than 50,000 square feet, which was also used for convention center purposes.
“It is clear from the Act,” wrote Conner, “that the legislature did not intend that public financing and the imposition of a hotel room rental tax be used to construct a convention center that would compete with an existing convention center of more than 40,000 square feet.”
Conner’s warning was not heeded, and in a crowded meeting on the morning of September 15th, the Lancaster County Commissioners – Republicans Paul Thibault and Terry Kauffman, and Democrat, Ron Ford — voted unanimously to establish a convention center authority and enact the room tax. On the same day, the Commissioners also enacted an additional excise tax, which was also to come from hotel room receipts.
Ordinance Number 44 established the seven-member LCCCA. Ordinance 45 and Ordinance 46, enacted two separate taxes totaling 5% of countywide hotel and motel room rentals.
Ordinance 45 enacted the Lancaster County Hotel Room Rental Tax of 3.9%, while Ordinance 46 levied the County Hotel Excise Tax of 1.1%.
The room rental tax revenue from Ordinance 45 would go to the Lancaster County Convention Center Authority (LCCCA) to build the convention center. The excise tax from Ordinance 46 was to be given to the Pennsylvania Dutch & Convention Visitors Bureau (PDCVB) to promote county tourism.
Both taxes were levied only on Lancaster County hotel and motel owners. The taxes would commence one minute after midnight, January first, 2000.
After the vote, the Lancaster County Commissioners named four people to the LCCCA board:
- James O. Pickard, the former Pennsylvania commerce secretary and Mayor Smithgall’s special economic advisor.
- W. Garth Sprecher, a senior executive of D&E Communications, a large integrated communications firm.
- Camilla L. Collova, a recently retired Armstrong World Industries vice president;
- Paul E. Wright, a retired general manager of a local Sears store
Weeks later, in early October, the LCCCA board held its first board meeting. After selecting officers – Pickard was voted Chairman and acting Executive Director – the newly formed board had but one item of business. The board voted on a solicitor for the Authority. The seven members unanimously approved Stevens & Lee as the LCCCA’s lawyer
At the time, Stevens & Lee, in the person of attorney John Espenshade, was also Lancaster County’s solicitor of record. Now, the law firm, as it had done in Berks and Luzerne Counties, represented both the county and the convention center authority. In the Lancaster project, Stevens & Lee was also the longtime registered lobbyist of the private developer, Penn Square General Partner, High Industries
In other words, the Stevens & Lee law firm represented both the public and private interests in the project. If this presented a conflict of interest, it was not noted by any of the Lancaster Newspapers.
Stevens & Lee certainly knew the convention center law, having authored the enabling legislation, the Third Class County Convention Center Authority Act of 1994.
The Stevens & Lee/LCCCA relationship was a cozy one from the start. As it happened, the first LCCCA offices were located in the Fulton Bank building, in the office space leased and occupied by the Lancaster branch of the law firm of Stevens & Lee.
Meanwhile, in Harrisburg, on October 19th, Sen. Gib Armstrong introduced an amendment to a bill that was originally intended to authorize county appropriations for Flag Day observance. Sen. Armstrong used Flag Day bill as a pretext to reenact the Convention Center Act with a single change.
In what became known as the “Armstrong Amendment,” Armstrong changed only the scope of the Convention Center Act.
Here is the original language of the 1994 Convention Center Act:
“This Act shall not apply to a county which has an existing convention center which covers an area of more than 40,000 square feet.”
This is Armstrong’s 1999 change
“This subdivision shall not apply to a county which has an existing convention center owned by, leased by, or operated by an existing authority or the Commonwealth which covers an area of more than 40,000 square feet.”
By amending the scope of the Act, Sen. Armstrong rendered the principal legal challenge of the hoteliers on Section 13102 invalid.
There was not a single word of the change – to a law that directly impacted the people and economy of Lancaster County – published in any of the Lancaster Newspapers until after the bill passed the Senate (October 20) and the House (October 26).
Even Lancaster County’s House delegation was outraged by Armstrong’s subterfuge.
“I have no recollection of anyone talking to me about it,” said Rep. Jere Schuler of Lampeter to the New Era after the amendment passed. “You put a 47-page amendment on my desk and ask me to vote for it in a minute, I can’t do that.”Lancaster County other GOP House Representatives – Armstrong; True; Zimmerman; and Strittmatter – all voted against Armstrong’s amended bill.
Only the county’s lone Democrat, J. Michael Sturla, joined Sen. Armstrong and Rep. John Barley in voting for the Armstrong’s bill.
The hoteliers reacted accordingly.
“What Sen. Armstrong and (Rep.) John Barley did was change the legislation to suit their needs so they could accomplish their goal to build a conference center in downtown Lancaster,” said Peter Chiccarrine, to the New Era.
The hoteliers saw Armstrong’s move as a transparent action to stop their strong legal challenge to the project.“Why would you change the act unless the hoteliers were right in their legal argument,” said Mark Clossey, of Lancaster Host Resort and Conference Center to the New Era.
Governor Ridge signed the revised Third-Class County Convention Center Authority Act on November 3, 1999.
Two days later, with cameras flashing, the Governor himself was in Penn Square handing over (and posing next to) an oversized $15 million check. Surrounding the Governor, among those with their hands on the giant check, were Senator Armstrong, Mayor Charlie Smithgall, and County Commissioner Paul Thibault.
It would not be the last time those public officials held their hands out to the taxpayers.
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