The Intelligencer Journal New Era article “City officials hope to qualify for new state program that could unlock $210 million for numerous projects” tells us of forth coming ‘pie in the sky.’
It reports “A bowling alley, bocce courts, a live performance theater, restaurant and game rooms could take the place of the now-condemned building on the square’s east side. The $10.4 million project could open within two years…. The two structures flanking Lancaster Square are also included in the application. The vacant, windowless Bulova building, which was once a department store, could be rebuilt as a retail space, with upper-level offices, as part of a $30.4 million project.”…
“The former Brunswick Hotel, partially reopened as Hotel Lancaster last month, will undergo a $15.8 million renovation under the plan.”
“The boutique bowling alley and bocce courts will provide a venue for active socializing before or after dinner, [John Meeder] said.
“Those bonds would be repaid with new revenue from state corporate, sales, personal and earned income, liquor, amusement and other state taxes generated by projects within the designated CRIZ areas.”
In reality, the Revitalization and Improvement Zone, CRIZ, is all about the further conversion of public funds to private profit. Making an honest buck through the capitalistic system has gone out of style. Now enriching fat cats through legislation and the funding of nutty projects through government subsidized and backed bonds at the cost of the tax payers is the way to do business.
This result is economic wreckage to be further funded through the guarantee of still more bonds at the further expense of the public. This in turn contributes still more earnings to the legal profession, bankers and their cronies who brought about the public robbery in the first place.
This is the Convention Center Project, the Harrisburg Incinerator acquisition extravaganza, the mercifully stillborn street car project, but even more blatantly and in spades. The idea of converting a failed department store (without windows!) and later munitions factory with all of its environmental questionability into retail space and “a bowling alley, performance theater, restaurant and game rooms” at public expense is preposterous beyond words. Let the sponsors show us a legitimate Feasibility Study. And why should it be publicly funded?
Sure a bowling alley would be patronized. We have our doubts about “bocce courts.” As for “successful retail space”, the location already failed as a department store! But in any case, how could the revenue from these low return uses begin to cover a fraction of the cost of acquisition and development of the project and generate funds to repay the financing? It is silly beyond contempt.
Let’s examine exactly what CRIZ does. It hypothesizes with bloated projections future state tax revenues from the project, then directly or indirectly offers government guaranteed loans to be repaid by the hypothetical future taxes, which in turn allows bonds to be sold with government guarantees to fund these bird brain endeavors and public rip offs.
In short, we are hocking the future in order to waste the money in the present.
Never mind that if your neighbor doesn’t have to pay taxes, then you have to pay more. Never mind that taxes from new projects are essential to replace taxes that no longer earned by older projects as their economic lives expire. This is simply Economics 1 A.
Let’s talk about the former Brunswick Hotel which has recently been reborn as the Lancaster Hotel.
Remember how we were told that it would be funded through $2 million to $3 million of private investments and, because it would not need to charge as high rates as the nearby Marriott Hotel, would tap a different market and thus not compete with the Marriott?
Of course that was nonsense to begin with, since the Lancaster Hotel is on the tax role for the school district, city and county. In contrast, the Marriott, owned by the city but leased with an option to buy for a ‘song’ to Penn Square Partners, is real estate tax exempt. Also the Marriott was largely financed at low interest rates due to city guarantee of the bonds.
Moreover, the Marriott tenant, Penn Square Partner, has both a sweetheart lease with the city and sweetheart contract with the Convention Center Authority, diverting normal convention center revenue to the Marriott and causing the convention center to pay many of the hotel expenses.
The Lancaster Hotel concept didn’t have a snowball’s chance in hell of succeeding given past history and the new Marriot. Some knowledgeable observers attributed the investment to a vanity endeavor by the scion of a Lancaster County wealthy family.
Now we are talking about putting over $15 million of government guarantee funds into the facility, which amounts to the $35,000 per room which is precisely what it would take to totally renovate the hotel to garner a major flag (Holiday Inn, Double Tree, Radisson, Sheraton, Hyatt) and thus compete directly with the Marriott.
For decades the former Hilton, later Radisson and Brunswick, now Lancaster Hotel suffered from lack of downtown hotel room demand. The convention center only produces business a third of the days of the year. So now what is going to happen? How can two similar hotels co-exist?
In a few years, we can expect Penn Square Partners to whimper that they can no longer afford to make its lease payments and threaten, if not further bailed out by the City, to turn the Marriott back to the Redevelopment Authority of the City of Lancaster (RACL). We can just imagine how City Planner Randy Patterson and Mayor Rick Gray will perform as hoteliers!
Let’s face it: The CRIZ is in part a life rope for nutty undertakings because of the utter bungling of the Lancaster Square East redevelopment by Patterson and Gray over their two terms in office.
Apart from the parking garage, the Lancaster Square East block should have been acquired out of bankruptcy and utter financial ruin (Bulova Building in the first place, Brunswick Hotel and Annex in the second), and an upscale residential condominium development constructed with private funds. That is the highest and best use for the block.
So said both NewsLanc’s publisher, who built a score of successful real estate developments in the USA and abroad without government subsidies, and also former mayor and recent mayoralty candidate Charlie Smithgall. But they were only trying to serve the public interests; not divert current and future public funds into a feeding trough for the Lancaster Establishment.
Patterson refused to even meet with NewsLanc’s publisher to discuss the future of Lancaster Square East. As any objective observer would have seen by listening to Gray during his debates, his administration is governance by arrogance, incompetence and neglect. The “professor” is more concerned about instructing the world than learning how to move Lancaster ahead.
So what is the angle of the ownership of the Lancaster Newspapers, Inc? How do they profit? Do they have a piece of the action?
Or do they remain as benighted as their predecessors who didn’t recognize when they were being ‘rolled’.
In future days we will discuss the other proposed projects that might be better described as scams.
Meanwhile Lancaster, hold onto your wallets and protect your rear end. It is about to happen to you again!
Your CRIZ piece was an eye-opener and should be required reading for EVERY resident of Lancaster County. This entire initiative is nothing but a giant shell game and scam to benefit the well-connected.
Please keep it more accessible on your website and don’t let it fall off the front page. People need to understand what is going on here. Someone just told me that the private developers of the new “pool project” by the old RCA plant will also be sticking their heads into the CRIZ trough.
CRIZ = corporate welfare at the expense of PA taxpayers.
EDITOR: It would be helpful if readers were to post the article on their Face Book pages.