The Intelligencer Journal New Era article “Still no deal on Lancaster County Convention Center” caught up to NewsLanc’s March 6th report “Crunch time for saving the Convention Center”, providing specifics that NewsLanc’s editor chose not to reveal lest it interfere with ongoing negotiations.
Evidently County Commission Chair Scott Martin considered the time to be right to go public with Wells Fargo’s recent obstruction to over Convention Center refinancing.
However, the article reports “The agreement funds the replacement of worn furniture, fixtures and equipment in the center at $900,000 annually. The partners want an increase in that amount to $1 million.
Mark Fitzgerald, Penn Square Partners vice president, said two weeks ago that those issues are being addressed in a separate agreement.”
That is followed by the enigmatic “Martin dismissed the dispute on what he considers a side agreement between the center authority and the partners.”
If an “agreement” is on the “side”, from the view point of the public how is its fairness not an integral part of the entire deal?
Will Penn Square Partners try to ‘extort’ still more one sided concessions or is Martin firmly in command of the situation?
The following from today’s report expresses NewsLanc’s understanding of the Wells-Fargo flip flop:
“The agreement Martin announced in September would have cut interest rates on the debt, saving the Lancaster County Convention Center Authority $800,000 annually.
In return, the county would back all of the debt with future revenue from the county’s tax on hotel room rentals. The county now backs $20 million of the debt.
But, for the bank, that savings was tied to doing a bond swap for bonds with variable interest rates, Martin said.
State law does not allow the county to do bond swaps or guarantee swapped bonds, Martin said.”
Wachovia Bank, shortly before folding and being acquired in a ‘shotgun wedding’ by Wells-Fargo, abandoned all reasonable lending criteria to guarantee bonds in the face of public outcry and a negative PKF Feasibility Study. Therefore it is appropriate for Wells Fargo to lean over backwards to accommodate the Convention Center Authority and the County Commissioners.
But it isn’t just a matter of decency to do this. As a practical matter, it is a way of avoiding the inevitable bankruptcy reorganization that will have to take place within the next year or two if no deal is completed.
For the interest of the public and the Convention Center Authority, bankruptcy reorganization might be the best outcome. It would enable the court to revisit all of the one side contracts and bond guarantees and to set them aright. When the Convention Center emerged from the process, it would be on a sound financial footing.
The major losers, of course, would be Wells Fargo and Penn Square Partners. At long last, out of this whole sordid mess, a sense of justice would be served.
Hats off to Commissioner Scott Martin for going the extra mile in attempting to negotiate a fair rework of the financials involving the taxpayer funded Convention Center. And woes to Wells Fargo and PSP for continuing to try to ultimately protect their bottom lines throughout this negotiation.
EVERYONE directly involved with the finances, management and future of this complicated venture MUST be willing to make sacrifices, so that the ultimate burden rest upon those initially and currently involved; rather than the honest hard-working taxpayers of Lancaster County.
Thanks also to NEWSLANC for the continue updates and honest assessments of this on-going saga. It is unfortunate that LNP (Least News Possible) sold it’s ethics and integrity in the pursuit of ill-gotten gains involving this venture.
Lancaster County citizens are poorly informed since their only source of daily newsprint is a stakeholder in this white elephant.
The newspaper article about convention center financings very much like we had predicted years ago.
The PSP’s demands have led the PDCVB to drop their support for Martin’svplans, and Wells Fargo has expectations that are not legal for the
county to meet.
Too bad they didn’t figure all of this out before construction started.