CONVENTION CENTER UPDATE: When is a hold up a ‘hold up’?

Much of High Companies’ revenue comes from government contracts. So perhaps Dale High and his subordinates are used to driving deals with bureaucrats who are inept, told to cut them a break, or are simply intimidated.

Their ‘hard ball’ approach has been obvious over the long and sordid history of the Convention Center.

First the High companies were the project manager and advisors at $52,000 a month. But the law firm of Stevens and Lee did most of the work and ran up $8 million in legal bills.

Then High was construction manager. The public received assurances that the project was on budget; it wasn’t. And to the extent it came even close, important elements of the plans remained on the ‘cutting room floor.’

High later gave up the construction task to become a major contractor for the project.

Now High is general partner of Penn Square Partners (PSP) and PSP owns a leasehold interest in the adjoining Marriott Hotel with the right to purchase it outright at a future date for a very small amount.

Consistent with its past ‘hard ball’ approaches, now it appears that PSP is holding out for a secondary agreement with the Lancaster County Convention Center Authority (LCCCA) whereby the Authority would commit to a substantial level of marketing expenses for the Center, not only for the seven years of the interest rate re-set, but for the full 95 years remaining on the condominium agreements. (The hotel and Convention Center adjoin and share public areas.)

This concerns the citizenry in several ways:

1) If the LCCCA doesn’t pay the debt service on the bonds, it is in default on the bonds. If PSP gets it way, the moment the Authority falls behind in spending the set figure for marketing, it would also be in default on the bonds.

2) If the LCCCA defaults, the county guarantee of the bond payments is activated, which pushes the cost onto the county tax payers.

3) Moreover, if the LCCCA with the approval of the County Commissioners consents to the 95 year marketing obligation, it will have no bargaining leverage with Wells Fargo Bank when the new seven year term for the lower interest rate expires.

Subsidiaries of High and its limited partner, the Lancaster Newspapers, Inc. (LNP), steered (one might say steam rolled) the city and county tax payers into the deal over the vociferous objections of the prior commissioners and most of the general public. PSP is further benefiting from one-sided arrangements with the Redevelopment Agency of the City of Lancaster (RACL) and the LCCCA through contractual arrangements that defy usual business terms.

As we understand the hold up, if PSP doesn’t get the secondary agreement, it may not approve the Martin Plan by the June 30 deadline set by Wells Fargo. All of the other participants have agreed to sacrifices and to sign on.

The message from High and the Lancaster Newspapers, Inc. appears to be:

Give us what we want or let the Convention Center go broke and the City take back the Marriott.

That is what we call both a hold up and a ‘hold up.’

We hope that Commissioner Scott Martin and the other participants call PSP’s bluff.

Dale High may not care because his bread isn’t buttered by doing business in Lancaster. But LNP certainly has much to lose.

There is just so much abuse the public will suffer before a segment of the public boycotts the newspapers. And that would be a shame.

Hopefully somebody at the Lancaster Newspapers will finally find the guts (the polite word) to stand up to High, even if it means going to court.

If so, we and most of the rest of Lancaster will stand up and cheer!

POST SCRIPT: The above NewsLanc article was posted several hours prior to the Intelligencer Journal New Era publishing a front page editorial masked as a news article entitled “Long-term pact at issue in Convention Center negotiations.”