CONVENTION CENTER BAIL OUT: LNP and PSP have no sense of shame

The chickens have come home to roost, as foreseen by the former County Commissioners and those who questioned the viability of the proposed convention center project. Meanwhile the project’s sponsoring partners and equitable owners of the Marriott Hotel endeavor to rewrite history concerning their past misrepresentations and current irresponsibility.

Below are excerpt followed in UPPER CASE by our initial comments on the Intelligencer Journal New Era article “Agreement on debt deal might be near for Lancaster County Convention Center” of November 14.

“In its statement, Penn Square Partners said it would contribute $2 million toward the center over seven years.”

BY CONTRIBUTE, THEY MEAN GIVE UP CERTAIN INCOME STREAMS TO WHICH UNDER NORMAL NEGOTIATIONS THEY WOULD NOT HAVE BEEN ENTITLED.

” ‘We’re asking the Lancaster County Convention Center Authority to ensure that a marketing budget to attract Priority I & II events is adequately funded and to maintain the FF&E Reserve Fund beyond the seven-year term of Martin’s proposal,’ Penn Square Partners Vice President Mark Fitzgerald said in the press release.”

THEY ARE ONLY WILLING TO “CONTRIBUTE” FOR SEVEN YEARS BUT WANT THE PUBLIC VIA THE COUNTY AND CITY TO CONTINUE TO PAY INDEFINITELY, ESPECIALLY WHEN COST BEGIN TO ESCALATE AFTER SEVEN YEARS FOR THE FF & E (FURNITURE, FIXTURES AND EQUIPMENT) RESERVE FUNDS.

“The debt payments on the construction bonds are also paid with the hotel tax revenue. It is a recession-driven shortfall in that revenue that first dropped the center’s reserves below $5.25 million and prompted the financial reviews.”

THIS IS UNFOUNDED EDITORIAL COMMENT BY THE LANCASTER NEWSPAPERS INSERTED INTO A NEWS ARTICLE TO PROTECT THEIR INTERESTS. WITH OR WITHOUT THE RECESSION, THERE NEVER WOULD HAVE BEEN SUFFICIENT REVENUE TO PAY THE HIGHER INTEREST RATE OR TO MAINTAIN AND REFURBISH THE FACILITY. THEY KNEW IT FROM THE OUTSET AND THAT IS WHY THEY OBSTRUCTED THE COMMISSIONING OF A FEASIBILITY STUDY TO DETERMINE PORTENTIAL PROFIT OR LOSS.

“With the deal, the county is backing all $63 million in center construction debt. The county currently backs $20 million of that debt.”

NOW COUNTY RESIDENTS ARE OBLIGED TO PAY AN ADDITIONAL $43 MILLION TO BOND HOLDERS. ALTHOUGH THIS WAS NECESSARY TO INDUCE WELLS FARGO TO REDUCE THE CRAZY RATE OF INTERESTS AFTER THE INITIAL TERM OF THE LOAN TO WHICH THE SPONSORS LED THE CONVENTION CENTER AUTHORITY TO ACCEPT , IT PUTS THE COUNTY IN A DEFENSELESS POSITION AS FAR AS FUTURE NEGOTIATIONS ARE CONCERNED.

“If the city is chosen to participate in the state’s new City Revitalization Improvement Zone program, or CRIZ, bonds funded through that program would be used for center furniture, fixtures and equipment.”

“If the city is not chosen for the program, instead of $5 million from CRIZ bonds, the city would draw $2 million from other sources for FF&E.”

THE CITY MAY BE STUCK FOR ANOTHER $2 MILLION. MEANWHILE RESIDENTS HAVE TO DEAL WITH HIGH REAL ESTATE TAXES ON THEIR HOMES.

The convention center project folly has sucked the economic lifeblood out of the city and to a lesser extent the county. All chits for state funding were called in to fund the financial ‘white elephant’. How many more worthy opportunities such as the enlargement of the Lancaster Public Library and the redevelopment of Lancaster Square East have been postponed or lost because of this looting of Lancaster? How much higher are and will be our county and city taxes?

County Commission chair Scott Martin has bravely and ably took on a task that is likely to compromise his future career. He deserves much credit; LNP and PSP deserve much blame.