For about ten days, we have been trying to write an accurate article on the status of the Martin Plan for salvaging the Convention Center finances. Problem is there is nothing definite to report about the proposed and further negotiated Collaboration Agreement, only a lot of scuttlebutt. But here it goes.
Only one thing is for sure: The Plan has not been approved by all parties as required.
Talk is that Penn Square Partners (PSP) want all of the hotel room sales tax indefinitely to go towards the enter the Center, regardless of future CC need. The Tourist Bureau (PDCVB), which says it requires a share of the room sales tax to properly promote the region as well as the CC and had hoped to have its share restored at a future date, may see this as a deal breaker.
Moreover, we hear (but cannot verify) that PSP is insisting that the County guarantee CC bond financing for the full term of the bonds, rather than for a limited number of years. Rumor is that County Commission Chair Scott Martin is reluctant to do this because he desires the guarantee to be held as a bargaining chip with the bond holder Wells-Fargo when the next fixed interest rate term is up for renegotiation in another five years.
We also hear that PSP is unhappy because they say the Martin plan violates the terms of the [sweet heart] agreements that it has with the LCCCA.
The CRIZ Board will be considering a $5 million bond issue for the benefit of funding F F & E (Furniture, fixtures and equipment) in the near future. (It appears that when Dale High and the Lancaster Newspapers, Inc. were selling the CC project to the public over the protests of the then county commissioners, they failed to include the usual allowance for future renovations in their figures. Of course, the PKF Feasibility Study paid for by the county included it and found the project wanting.)
LCCCA board member Robert Campbell commented that for every month approval of the Martin Pan has been delayed, it is costing the convention center a lot of money through higher interest costs.
We are told that after we left the meeting, former mayor and LCCCA chair Art Morris told the LCCCA board that they should put it on the record that they hate this agreement, but were forced into it. Morris did an excellent job when he joined the LCCCA board and became chair after the project was underway. Would that he had studied and spoke up concerning the CC a year or two earlier.
If a variation of the Martin Plan is not adopted by the current interest extension deadline in March, there will be a steep increase that conceivably could force the CC into bankruptcy within a year or two.
Even more serious, a failure to soon deal with the CC’s financial plight could cause potential meeting holders to go elsewhere. Major events are planned a year or two ahead; thus this loss of business could be devastating for 2015 through 2017.
I would suggest a slight change to your commentary.
Dale High and LNP, savvy and experienced builders and operators, absolutely planned for FF&E replacement. the problem is they planned for that to be paid for by the broke LCCCA, and they are broke in large part due to the unbalanced agreements they signed at the advice of their counsel…the former counsel of PSP. I
f I were PSP, I would demand that the LCCCA live up to the terms of the agreements that they signed. The real issue here is that they should not have been signed. Art Morris is WAY, WAY, WAY late to the party. He should have been calling for the LCCCA, which he ran, to be on the record years ago against the agreements his predecessors signed.
They are the problem.. The LCCCA should seek whatever type of bankruptcy/insolvency procedure they can to rid themselves of PSP.
I wonder when Bernard Harris will share all of the above with us???
THANK YOU for providing us with the truth from the very beginning and throughout the intervening years right up to the present.
If only our local media (LNP and WGAL) would do the same for us.