Scott Martin hits grand slam re Convention Center Refinance

County Commission Chair Scott Martin wasn’t drafted to salvage the financial fiasco of the County Convention Center, but he volunteered for the task and at today’s press conference submitted a viable plan, conditionally approved by most of the parties and at best with reservations by another, that would put the Center on a viable financial footing for years to come.

A synopsis is as follows:

The City of Lancaster will contribute $100,000 annually for seven years. If they do not receive a CRIZ award (State funding under a proposed program) in 2013, the City will provide a 2 million deficiency guarantee between 2014 – 2020. The $5, 000,000 is to meet the future needs for updating the Furniture, Fixtures and Equipment, an expense item that had been ignored both by the sponsors and by the media.

The Convention Center will make additional contributions to support marketing over the next six years and agree to an annual marketing budget of $97,000.

Penn Square Partners (PSP) is being asked to make annual payments to LCCCA marketing of $100,000. PSP is asked to forgive $700,000 of LCCCA debt to PSP. It is also asked to allow LCCCA to provide concession services at the facility for seven years, based on $100,000 annually. (Of course many of the current contractual arrangements between PSP and the LCCCA are outrageous by any business norm. For example, the LCCCA should have been receiving about 30% of concession revenue; instead it was only getting 5%.)

The Pennsylvania Dutch Convention and Visitors Bureau (CVB) will, after two years, once again receive 20% of the hotel sales tax back if the LCCCA’s reserves are minimally at $6 million.

Wells Fargo agrees to give the LCCCA a 125 basis point reduction (1.25%) in interest cost, an average annual savings of $800,000, a total of 4 million dollars over five years.) Also it will extend the current deadline to January 2, 2014, which includes pricing relief. Martin commented ( “I’m sure those guys are sick of me after a year but commend them for what they have done.”)

The County will provide a full surety guarantee, via the hotel tax, of the LCCCA’s debt, undoubtedly a pivotal factor in inducing Wells Fargo to provide so much interest relief. Currently the county guarantee comes to $20 million of the $63 million in bonds.

Martin seemed especially pleased to report that the plan does not include an increase to the Hotel Room Sales tax of 5%.

Martin emphasized that the arrangement was tentative and subject to the approval of City Council, the LCCCA board, the Visitor Bureau board, and, after all other approvals, the County Commissioners.

Mayor Rick Gray praised the plan on behalf of the City; Chair Kevin Fry did the same speaking for the Convention Center Authority. Others also spoke in favor of the plan… all except one, which was conspicuous for its absence: Penn Square Partners. Gray commented “I wish to thank Commissioner Martin. To say this was hearding cats is an understatement.”

Time will only tell whether the PSP (Dale High and the Lancaster Newspapers, Inc. affiliates) will agree to relinquish some of their undue benefits. Suddenly what had been a one sided transaction takes on at least a semblance of a pragmatic business arrangement.

No one stands to benefit more than PSP, because if the Convention Center does not have funds for marketing, refurbishment and proper operations, it will not long be able to attract business. And without a successful Convention Center, PSP’s Marriott Hotel will become a loadstone rather than a profit center.

More reporting and comments will follow.

Click here to read the entire Power Point presentation.



  1. It looks like the ENTIRE State funding from Senator Smucker’s “City Reinvestment and Improvement Zone” program will be going toward the LCCCA’s debt, something like $5 MILLION. So much for investing in “blighted” areas…

  2. If this is true, voters should take Sen. Smucker to task come election time.

  3. This whole thing sucks but it sucks better than any alternatives that I am aware of.

    PSP gets off Scott free. They give money to LCCCA for marketing who then give it to IHR…their own hand selected operators. Their contributions are smoke and mirrors…as are some of the City’s “contributions”.

    That said, I gave Martin a lot of credit for coming up with the least worst option.

Comments are closed.