I would like to add #5, to your list of 4 factors effecting Convention Center finances.
The recent controversy between LNP and the Hoteliers on releasing their proprietary tax data sheds light on a 10 YEAR OLD problem with CC financing. In his request for this private data, LNP staffer Gil Smart uses the variance between what the County reports in total tax collections and what that collection would be if we collected tax on the amount of revenue reported by Smith Travel Research.
This variance, what could more appropriately be described as a gross OVERSTATEMENT by Smith Travel, has existed for more than 10 years. Smith reports unaudited, voluntary data which they collect from “some” lodging operators in Lancaster and then use computer models to “make-up” the difference.
The problem is that the LCCCA, in 2003, used this overstated data to convince Thibault and Ford to back their bonds, even though they had almost 4 years of actual (audited) County collections to use if they wanted to. Of course, that would not have allowed them to get their guarantee but why let reality get in the way of Dale’s project?
The result is that tax revenues on their model are overstated by 15-20% per year and we are now in year 10 of that model. That’s right, we were behind, WAY BEHIND, before we even put a shovel in the ground.
Even with a strong economy and consistent growth, there is no way we could possibly be hitting the numbers used by the LCCCA to secure our bond guarantee. Kind of like entering a boxing match with one hand tied behind your back.
