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Editorial: A funding stalemate in downtown Lancaster

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It's a stand-off, and it's anybody's guess who will blink first.

The Lancaster Convention Center Authority needs money. The interest rate on its debt obligation is due to reset in six months, and if it can't demonstrate financial stability, that rate likely will skyrocket.

The center is hitting its targets, but it was never expected to be profitable. Collection on the countywide 3.9 percent hotel tax, established in 2000 to help support it, are running behind projections, however.

Two plans now compete to keep a bad situation from getting worse: Lancaster Mayor Rick Gray wants the county to raise the hotel tax to its maximum 5 percent, essentially throwing the burden on visitors. County Commissioner Scott Martin wants stakeholders, most of them local, to share the pain in coming up with an annual $1.7 million.

That includes the Pennsylvania Dutch Convention and Visitors Bureau yielding up more than $930,000 in hotel tax revenue, bond holder Wells Fargo agreeing to cut its variable rate, the city paying a $100,000 annual subsidy, the center itself instituting operational efficiencies aimed at saving some $35,000 a year and Penn Square Partners (which owns the Marriott hotel next door) kicking in another $250,000 in food and beverage royalties.

Not surprisingly, the Greater Lancaster Hotel and Motel Association decided to back Martin's plan. The hotel tax hits its members financially as well as philosophically. The loss of visitors bureau promotion is unappealing.

And it's hard to love collecting a tax on your customers that benefits a potential competitor — the Marriott.

Did Lancaster need a loss-leader convention center to promote other downtown development? That's not the question now. The center exists and is a first-rate facility the city can be proud of; there is no doubt it is drawing visitors and millions of dollars to the downtown. It has to be paid for and maintained.

Right now, though, there's no funding solution that is palatable to everyone. Two county commissioners oppose raising the tax, while elements of Martin's plan seem overly optimistic. It's hard to see how this moves forward — and hard to envision things going well next March if it doesn't.

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