Article “Convention center paradox: doing well, but deep in debt” reports:
Lancaster County, [J. Mark Tobin] noted, has guaranteed $20 million on the authority’s debt. “It is possible that if the current guarantee could be substantially increased, by the county or some investment grade entity yet to be determined, that the opportunity to refinance the debt may be improved, thereby likely reducing interest expense,” Tobin wrote.
Tobin suggested several possibilities:
• A business improvement district tax, levied on businesses in the vicinity of the convention center. Lancaster already has two such levies, the Downtown Investment District and James Street Improvement District.
• Increasing the excise tax.
• A prepared food and beverage tax.
• An increased sales tax.
• An increased property tax.
• And improved hotel room rental tax collections.
WATCHDOG: Tobin and the reporter fail to mention the most obvious and popular solution to the problem: The sponsors who so disingenuously misled the public and bludgeoned the then county commissioners should make up any deficit. Both S. Dale High and The Lancaster Newspapers need to take responsibility for their disservice to the community.
Also, the sponsors promised that the Convention Center would attract offices and stores to downtown, which has not occurred.
So is the Convention Center really “Doing well” as the headline states? Rather it has robbed public funding that could have gone to far more valuable public investments, just one of many would have been the renovation and expansion of the Lancaster Public Library which serves around 1400 people a day.
“Doing well”? By whose standards??? Where is the economic development that was promised so many times?
Clearly, the ongoing cost to taxpayers of the hotel and convention center far exceeds by many times over the project’s actual economic benefit to our community.
It is obvious that the predictions made about “hotel tax” revenue before convention center construction began were at best overly optimistic, at worst a fantasy concocted to railroad the project through while it was still possible.
So what will become of the convention center’s nearly $64 million in construction debt?
Thanks to former County Commissioners Paul Thibault and Terry Kauffman, Lancaster County taxpayers have guaranteed $20 million of the convention center construction debt. If the banks were to declare this debt in default (which it technically is already), Lancaster County would be forced to borrow $20 million to pay off its guarantee. This would leave nearly $44 million in debt remaining, which actual “hotel tax” revenues should be able to cover.
Lancaster County property owners would see a slight increase in their real estate taxes to pay off the unexpected $20 million in borrowing, so that the convention center could remain in operation. Conversely, other programs could be cut in order to pay for the additional debt service.
I’m going to stick my neck out here and make an unavoidable point: the hotel and convention center project is truly “too big to fail”. If the convention center were to close, the hotel would be unable to survive on its own; there isn’t enough business in downtown Lancaster to keep it in operation (just look at the Brunswick, which when built was much nicer than the Marriott is right now).
Taxpayers would still be liable for the convention center debt, and closing the hotel would make Lancaster City taxpayers responsible for the outstanding $24 million in construction debt PLUS paying off the balance of the $14 million Fulton Bank loan.
Political pressure combined with practical considerations will force politicians to once again produce more taxpayer dollars to keep the “integrated facility” in operation.
It is time for Lancaster County / City taxpayers to put political pressure on all our elected public officials to make sure that no more taxpayer dollars (in any form) are expended on this woe begone project. The ONLY fair and responsible solution is to require the originators of this venture to ‘make whole’ any cashflow shortfall!!!!!!
What are the e-mail addresses of our elected officials? Let’s flood them with our opinions!!
EDITOR: [email protected]