NewsLanc.Com
Providing Greater Lancaster with an Alternative Source
for Local News and Commentary
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January 5, 2007 Publisher: NewsLanc.com
LLC
Volume I, Number 19
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The Convention Center Authority has labored hard in recent months to convey the impression that the project is actually under construction. But in fact all that is underway is demolition to prepare the site for future development, whatever it may be. For the project to move forward, the Sponsors and Authority have to overcome at least three formidable if probably insurmountable obstacles:
| expires and the bonds are likely to become "junk grade," resulting in soaring interest costs, adding to projected operating losses, and forcing the convention center to either close its doors or default on its loans.
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Columnist Gil Smart incorrectly stated in a lead news article in the December 31 Sunday News: "Shaub testified twice before the grand jury, but Shellenberger and Henderson testified only once... The appearance of 'taking the fifth,' say observers, could be extremely damaging politically." Commissioner Molly Henderson actually testified three times before the Grand Jury and Commissioner |
Dick Shellenberger testified twice, a fact Smart would have learned if he had bothered to ask Henderson when he extensively interviewed her in preparation for his column. And suggesting that there was an "appearance of 'taking the fifth'" is a gross distortion. Smart fails to name the so-called "observers." This is but one more example of what appears as mendacious efforts on the part of the monopoly |
newspapers in general and the Sunday News in particular to discredit Henderson as well as Shellenberger in retaliation for their opposition to county bond guarantees for the proposed convention center. A subsidiary of Lancaster Newspapers, Inc. is a 44% sponsor of the controversial project. Is a libel suit by Henderson in the offing for 2007? |
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THWARTS NOMINATION OF ALTERNATIVE TO CHAIRMAN TED DARCUS |
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The Lancaster County Convention Center Authority nominating committee's meeting began Jan. 4 at 7 p.m. and ended 11 minutes later. The recommendation of the Ted Darcus-appointed nominating committee was to retain Darcus as Chair for the next year. Jack Craver, a committee member, then nominated Joseph Morales as Chair. Morales appeared surprised and said nothing. Committee Chair Willie Borden consulted with Executive Director David Hixson, who consulted with the Stevens & Lee solicitor who said that the nomination needed a second to be moved to a vote before the full board. So the nomination was killed. When the entire board meets on January 11th, it would theoretically be possible for Morales to be nominated as chair and subsequently elected, assuming Morales consents to be chair. However county appointees Laura Douglas and Deb Hall will be absent. If the choice of officers were carried over to a meeting where all seven members were present, it is almost certain that Morales could become the next chair since his vote would be added to the three county appointees. Darcus, a city appointed board member, is to be replaced in September by a member to be chosen by the county commissioners. (There are always three city and three county appointees and the seventh appointment is rotated every four years between city and county). If the then four county appointees vote together, they will control the majority of the board and will be able to choose the next chair and set future policy So what happens in year six? Authority Shoots Craps with Center Bonds Wachovia Bank is not offering to lend the Convention Center Authority money, but rather to provide a Letter of Credit, a form of bond guarantee. The Letter of Credit is only for 5 years. However, the bond terms will be for 40 years. If the project does as poorly as predicted by the PKF Feasibility study, it is unlikely that a new Letter of Credit would be available from Wachovia or any other institution. The loan would cease to be rated double or triple "A" and instead likely become "junk bonds" with an extremely high (Continued in next column) | interest rate that would greatly increase the cost of servicing the bonds.
Much higher interest rates would require some sort of bail out at taxpayers' expense, or for the project to sit idle for lack of funds for operations.
In short, the five year Wachovia credit enhancement may serve to jump start the project, but this short term gambit greatly increases long term taxpayer risk. 2006 Propaganda Award goes to... On August 11, 2006, in an attempt to give credence to a banner Intell front page headline announcing "Center Closes Fund Gap," the monopoly newspapers' Chairman, Jack Buckwalter, proclaimed: "This is a happy day. It looked like this project would fail. Failure was not an option." Oh, really? Not only has the "gap" of $20 million not been closed, but since Buckwalter's self congratulation, the project�s cost has escalated from the then $160 million to the current $175+ million. Some closing of a gap!
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