The Pennsylvania Dutch Convention & Visitors Bureau has reversed course from its Tuesday decision and is now back on board with a financing plan for the Lancaster County Convention Center.
PDCVB President Kathleen Frankford issued a statement, as follows.
"The board of the PA Dutch CVB voted today to sign the Collaboration Agreement as presented by Commissioner Martin on June 18 regarding the Lancaster County Convention Center Authority.
"We were joined, via phone, by Commissioner Martin and by other county staff onsite, and they were able to provide us with a fuller, more-detailed picture of the agreement than we had on Tuesday.
"While we wanted Penn Square Partners to join the rest of the key stakeholders in contributing to this agreement, after further discussion today, we felt that signing the agreement was the best available alternative to risking a loan default for the facility, along with higher interest rates, and a harmful impact on the county’s finances.
"We remain hopeful that this medium-term solution will help the convention center, and will now turn to working with Commissioner Martin and others on finding ways to return us to an adequate level of tourism marketing funding, for the benefit of the entire community."
The convention center opened in downtown Lancaster in 2009. The integrated $178 million facility includes both the convention center proper, which is a publicly owned entity under the direction of LCCCA, and The Lancaster Marriott at Penn Square, which is owned by the Redevelopment Authority of the City of Lancaster and leased to Penn Square Partners, the private company that holds the Marriott franchise.
The PDCVB is involved because, per the current county ordinance, PDCVB's 20 percent portion of the 3.9 percent hotel room rental tax is diverted to the LCCCA when its fund balances do not meet the minimum required levels — which has been the case for all but three months since February 2012.
Under Martin's proposed plan, the hotel tax rate will remain at 3.9 percent and PDCVB's share will go to LCCCA through June 30, 2019. However, if the LCCCA's reserves are at $5.75 million by the end of 2016 and later, PDCVB is eligible to get its share back.
Lancaster County Commissioner Scott F. Martin has been leading negotiations for about two years, with a goal of getting all of the many parties on board. Several weeks ago, all other parties had signed on when Penn Square Partners announced that it was making release of its signed approval contingent on Lancaster County Convention Center Authority’s approving two side agreements that would have lasted the remaining 95 years of the convention center's lease.
LCCCA did not take action on the side agreements, a decision Martin supported, which triggered the announcement last week that the plan would proceed minus PSP — and then the Pennsylvania Dutch Convention & Visitors Bureau's now-reversed decision Tuesday not to support the plan.
Martin has said Wells Fargo signaled an unwillingness to venture further extensions and he plans to put the agreement to vote by the commissioners at their scheduled meeting July 1. If it isn't approved, the convention center debt is set to go into default at 5 p.m. July 1, triggering a 10 percent interest rate on nearly $64 million in bonds. Martin said that would likely force the center into closure and, under the county's current partial guarantee, cost the county up to $1.3 million annually over the next 45 years.
Although the proposal calls for the county to now guarantee all of the convention center debt instead of just part of it, Martin said the structure is such that the county would not be exposed unless the center failed and the hotel tax receipts dropped catastrophically in a way that they did not even during the recent recession.