Mayor Gray: Does WalMart subsidize Target?

It started with the Convention Center Project and the looting of the public trough continues and contempt for the public welfare now reaches new heights (or should we say depths .)

The Marriott Hotel is owned by the City of Lancaster through the Redevelopment Authority for the City of Lancaster (RACL.) According to the PKF feasibility study of 2006, the Marriott itself is a highly questionable venture, despite it being exempt from the payment of real estate taxes and the cushy deal it had with the Convention Center which allowed it to benefit from most of the Center’s concessions.

(The recent need to bail out the Convention Center with state and local money and a full county guarantee of debt has proven the PKF report to have been accurate.)

Now Mayor Rick Gray and other members of the City government are celebrating the advent of the City Revitalization and Improvement Zone (CRIZ) program which they say will invest over $15 million into totally restoring the former Brunswick and now Lancaster Hotel. That facility was originally a four star Hilton! The Marriott is only a three star run-of-the-mill Marriott, a mid-brand.

Initially the new owner was going to invest two to three million dollars and provide rooms at a lower price than the Marriott, thus tapping a presumed underserved market. (This never made much sense given the expansiveness of the facility, but at least it proffered a veneer of logic to those unfamiliar with the economics of the hotel industry.)

So if the Marriott is operating in a marginal manner, despite its low city rent, sweetheart deal whereby it enjoyed most of the concession profits from the Convention Center, and real estate tax free status, how will it remain in the black when it has a head on competitor with a comparable or better franchise flag?

And how will the likely debt loaded and re-flagged Lancaster Hotel survive by dividing the existing downtown business that now goes to the Marriott?

If Penn Square Partners which operate the Marriott exercises its right to terminate its lease, what is the City to do with the property?

And how long will it be before the new iteration of the Hilton / Ramada / Brunswick / Lancaster Hotel suffers the same fate for lack of adequate business as its predecessors at that location and the downward spiral commences?

City Planner Randy Patterson wouldn’t even meet to discuss alternate approaches for Lancaster Square East with NewsLanc’s publisher, Robert Field, an experienced national and international real estate developer who sought to provide input, on or off the record. Why?

Perhaps because there was little money to be made by special interests through arranging for the acquisition and razing of the Brunswick, the Brunswick Annex and the Bulova Building and the public sale for the development of upscale residential condo units?

Or was it just ignorance of the hotel business and urban development by ‘Professor’ Gray?

We suspect both.

The CRIZ is another way of looting tax payers, robbing future generations, and putting money in the pockets of special interests. Many will prosper in the short run; and later, just as is the case with the Convention Center, the public will end up holding the bag.

This once well governed, economic sound and prosperous county is being drained of its historic resources.

Interestingly, the Lancaster Newspapers, Inc. (LNP)will turn out to be a Patsy. But given its lamentable role as a major advocate and sponsor of the Convention Center Project (which it probably at its earliest stage was undertook with good intentions), LNP finds itself joined at the hip with S. Dale High and to enmeshed to speak out candidly about the CRIZ. For one thing, it knows that the Convention Center needs the five million CRIZ subsidy for essential refurbishment, areas of which the Marriott uses for meeting and banquet space.

Rick Gray’s support of over $15,000,000 of CRIZ money for the Lancaster Hotel makes as much sense as Walmart subsidizing Target.

Meanwhile Lancaster sleeps.