EDITOR: The below was written perhaps a month ago but it does not appear that it was published. Better late than never!
Wells-Fargo Bank owns the Convention Center Bonds. According to the Intelligencer Journal / New Era, “Interest on $65 million in bonds issued to finance construction of the 3-year-old convention center is as much as 5.57 percent and could shoot to 8 percent during refinancing in March.”
Wells-Fargo Bank is currently offering home mortgage rates at 3.5% interest.
Furthermore, unlike home mortgages, the bond issue for the Convention Center is guaranteed by the County of Lancaster, with an A-1 credit rating.
When the Convention Center Authority sought financing, Fulton Bank, PNC Bank and other major banks declined to participate, recognizing the financial pitfalls as ultimately spelled out in the PKF Feasibility Report which recommended either downsizing or finding a different use for the site.
But varied local interests were far more interested in the fees and profits to be earned through the almost $200 million development than concerned about what would happen afterwards. So an arrangement was entered into with the soon to fail Watchovia that was both draconian in its terms and unconscionable in its results in the not distant future.
If the effective rate of interest were 4% rather than the current 5.57%, the savings would amount to $1,020,500 annually, a long ways towards spanning the $1,500,000 anticipated deficit for 2013.
Did we learn anything? The co-chief sponsor of the CC, the Lancaster Newspapers, Inc., certainly hasn’t, or they are not saying. It acts as though it were blameless and encourage that the deficit be funded by a still higher tax on hotel room sales. Yet the Convention Center / Marriott development has displaced more business from the vast majority of hotels than it has contributed.
The sponsors pulled off this sleight of hand by misreporting market studies as feasibility reports, and rebuffing requests for solid feasibility information from the then the County Commissioners. They then denounced the PKF Report which events have proven to have been accurate.
But having been trapped into one $200 million debacle, the county citizenry is at the cusp of possibly falling into another…will wonders never cease! For reasons yet to be explained, the Lancaster County Solid Waste Management Authority (LCSWMA) has decided to invest the approximately $1,750,000 originally intended to upgrade their facilities in Lancaster instead in a high risk acquisition of the troubled plagued Harrisburg Incinerator, with the promise of significant savings in tipping fees for Harrisburg and Dauphin County but little apparent benefit for Lancaster.
Moreover, not only is the LCSWMA using earnings from its Lancaster monopoly for the proposed acquisitions, if the project turns out to be a dud, tipping fees for trash collection in Lancaster will have to be increased to cover the losses. Déjà vu?
Why is Jim Warner, President and CEO of LCSWMA doing this? …Not for personal profit, we suspect, but out of ego. He bullies those who dare to pose questions. And except for NewsLanc, no other media here in Lancaster appears to have the guts to critically report on the matter.
They say (we haven’t discovered the original source) “Those who don’t learn from history are destined to repeat it.” What a bunch of yokels!
