Chapter Three: Helping Hands in Harrisburg

(Third in a series)

When Governor Tom Ridge signed the Stadium Bill in the first days of February, 1999—adding half a billion dollars to the Pennsylvania state capital budget—Lancaster County was virtually promised a $15 million check to build a downtown convention center.

I figure, if we get that $15 million egg, somebody will sit on it,” Mayor Charlie Smithgall said to the Lancaster New Era.

Almost immediately, the project began to change significantly.

The comity, civic high-mindedness, and community involvement that had marked the project’s early planning under Winterbottom vanished, replaced by a lack of transparency, ‘old boy’ patronage, and an apparent absence of due diligence on basic questions of feasibility. The question of feasibility, never properly answered, would define the next tortured decade of the Lancaster County Convention Center and Hotel project.

The first and most obvious change was the physical location of the proposed center. The Winterbottom Report recommended a “conference center” located in Lancaster Square on North Queen Street, adjacent to the Brunswick Hotel, which Winterbottom suggested be extensively renovated.

The Brunswick was (and is) a bland, even drab, brick building built in the early 1970s. At its construction, it was operated under a Hilton flag. The ‘new’ Brunswick replaced its namesake predecessor, another Beaux-Arts gem designed by C. Emlen Urban, that was razed in the botched Lancaster Square re-vitalization.

The existing Brunswick did have a couple of clear advantages over other downtown sites: it was already built, and there was an adjacent, multi-level parking garage owned by the Parking Authority. Renovation would cost less than razing a city block and building anew. Lancaster Square and the Brunswick could handle a “small conference center,” as prescribed by Winterbottom and a fully renovated Brunswick, perhaps converted to a major flag, offering a conference center would bring vitality to the almost moribund Lancaster Square.

After Ridge signed the Stadium bill, in February, 1999, the only site discussed publicly was the Penn Square location of the former Watt & Shand building, across Kind Street from the Fulton Bank and  Queen Street from the Lancaster Newspapers’ office buildings. No public explanation was given at the time for the switch.

We were the prime location [for a convention center];” the Brunswick’s marketing manager said to the New Era after the switch, “for whatever reason the winds had shifted to Penn Square.”

Years later, in 2009, Smithgall said of the move:

“I tried so many times to speak to the [Philadelphia-based corporate] owners of the Brunswick,” said Smithgall. “I tried to call them directly and I told their guy here, [G&F Management executive, Daniel] Logan that I was trying to reach the owners, and no one called me back. Finally, it was time to move on.” We will hear more of Logan later in the series.

The cost of the convention center also changed dramatically with the move to Penn Square. Winterbottom’s estimate was $6 million for a center at the Brunswick site. Now, the cost grew five times, to $30 million, plus another $45 million for the “Four-Star,”Luxury” hotel that would now be built by Penn Square Partners.

In order to receive the $15 million from the state for construction of the convention center, the county had to match, dollar-for-dollar, the Commonwealth grant.

The legislative mechanism several other Pennsylvania counties used to get the matching funds was the levying of a countywide hotel and motel room rental tax. This levy – enacted by the county commissioners, collected by the county treasurer, and administered by a public convention center authority – allowed a tax on each hotel and motel room rentals up to statutory limit of 5.0 %. The tax revenue would be pledged to pay back money borrowed to build the center.

The enabling state legislation was  the Pennsylvania Third-Class County Convention Center Act of 1994, written and championed by the law firm of Stevens & Lee.

Until this point, early 1999, the senior Lancaster County state legislative representatives – House Appropriations Chairman, Rep. John E. Barley, and Sen. Gibson E. Armstrong – strongly supported the convention center concept, but both gave similar caveats for their support.

I wouldn’t be interested in doing this [implementing a hotel room tax] unless I had the support of the affected community—the hotel people,” Rep. Barley said to the Lancaster New Era.

Sen.Armstrong echoed his colleague. “The hoteliers have to support it,” said the senator.

Republican County Commissioner, Terry L. Kauffman, seemed to be reading from the same memo: “It can’t compete with existing businesses. It has to help them.”

The problem was that the “existing businesses”—Lancaster County’s hotel and motel owners—didn’t think the convention center and hotel project would help them at all.

Rodney Gleiberman is currently, and was in 1999, the general manager of the 165-room Continental Inn on Lincoln Highway East in suburban Lancaster, near the popular outlet malls and the Dutch Wonderland amusement park. His father, Michael Gleiberman, with whom he co-owns the Continental, has developed more hotel rooms in Lancaster County than anyone.

If I felt that this project offered any upside to my business, I would support it,” said Gleiberman. “The reality is that this hospitality project has zero un-interested support from within the local hospitality industry, as it is not grounded in a complete and thorough feasibility study, any reasonable anecdotal nationwide track record, or the slightest bit of common sense.”

Gleiberman wasn’t the only hotelier to hold this view. He is one of dozens of hotel and motel owners that form the membership of the Greater Lancaster Hotel & Motel Association (GLHMA). The organization’s businesses represent more than half of the total rooms available in the county.

In the summer of 1999, before the tax was voted on by the Lancaster County Commissioners, GLHMA conducted a survey of 58 hotels listed with the county’s Pennsylvania Dutch Convention & Visitors Bureau (PDCVB). Of the 58 establishments, 54 voted against the project, three abstained pending more information. There was only one supporter among the hotels contacted—the Hampton Inn, owned by High Hotels, a subsidiary of High Industries, a partner in the hotel portion of the project.

Peter Chicarrine, part of the executive management of the 280-room Eden Hotel and Resort and GLHMA member, said to the New Era. “Before we spend $30 million for a facility and another $45 million for a hotel, I think we should get the facts, and nobody has done that.”

Another GLHMA member, Tom Zeager, owner of an historic inn in Strasburg, was more blunt. “I think this will be a white elephant on the backs of the taxpayers. I don’t think it will work.”


Chapter Four: Full Court Press: Lancaster Newspapers takes sides