The Pennsylvania Dutch Convention and Visitors Bureau has withdrawn its support of Lancaster County Commissioner Scott Martin's plan to stabilize the finances of the Lancaster County Convention Center Authority.
The bureau's board also voted last week to convene a meeting this month "of key community stakeholders" to study ways of funding the county's tourism promotion, according to a statement sent to the media.
The two issues are connected. Martin's plan calls for the 20 percent of the county's hotel tax that formerly went to the visitors bureau to be redirected to the convention center authority, as it has since spring. The amount is around $900,000 a year.
The visitors bureau has made up for the loss through cuts and the drawing down of its reserve fund but said it cannot function effectively in the long haul unless funding is restored. The bureau will withdraw $625,000 from its reserve fund next year alone, board treasurer Shane Ackermann said in the statement.
"It is imperative that our loss of funding is addressed in the near term," Ackermann said.
The board did not vote to oppose Martin's plan, bureau board chairman Rick Stammel said in the statement.
"However, in order for us to be an effective participant in a plan that will make this CVB whole, we need to go into these conversations in a neutral position," he said.
Penn Square Partners, a joint venture of the High Cos. and Lancaster Newspapers Inc., owns the franchise for the Lancaster Marriott at Penn Square hotel adjoining the convention center. It leases the property from the redevelopment authority.
The convention center authority owes more than $60 million in debt incurred to build the convention center, and its portion of the hotel tax, which was supposed to cover the debt service, has proved insufficient.
Martin's plan proposes to shore up the authority's finances over the near term without raising the hotel tax. A competing plan put forward by Lancaster Mayor Rick Gray would raise the hotel tax from 3.9 percent to its legal maximum, 5 percent, and restore funding to the visitors bureau.
In March, bond holder Wells Fargo is due to reset the interest rate on the variable portion of the convention center debt. If the authority's financial stability has not improved, there are concerns the risk premium could rise significantly.
For more Lancaster County news, follow Tim Stuhldreher on Twitter, @timstuhldreher, during the State of the County event happening from 11:30 a.m.-1 p.m. today.