Originally published in the Lancaster Post on May 2, 2008
Anyone who travels through downtown Lancaster cannot avoid noticing the hotel and convention center under construction at Penn Square. Before this summer is over, the hotel tower will be taller and more massive than the Griest Building located diagonally across the square.
We've all heard the project described as a "public-private partnership". We've all seen the often-quoted $170 million price tag. But these do not tell the whole story.
One of the promises made to justify this project was the large amount of real estate taxes the hotel would pay. Unfortunately, the current financing plan allows the "private" hotel to get away with paying NO taxes at all for at least 20 years. At the Lancaster City/County/School District of Lancaster 2008 tax rate of 34.0160 mils, the $76 million hotel would have paid well over $2.5 million a year in real estate taxes (assuming the building would be assessed at what it actually cost to build).
The convention center itself, since it is owned by a government agency, will never pay any taxes at all. Had this site been developed for commercial and/or residential use, a LOT of real estate tax dollars would have been generated every year. Our taxes will always be that much higher as a result of this missing revenue.
To add insult to injury, Lancaster City has not charged either the hotel or the convention center for any of the building permits or inspections which are required by law. This is costing Lancaster City taxpayers over $1 million in lost revenue.
Then there are the hidden costs.
The taxpayer-funded Pennsylvania Dutch Convention and Visitors Bureau is in the process of hiring its third full-time employee dedicated to bringing conventions to Lancaster County; a large portion of their time is spent promoting the downtown convention center. The PDCVB and Interstate Hotels and Resorts (the manager of the hotel and convention center) meet every two weeks to coordinate their marketing efforts. And the PDCVB always shares their booth at convention marketing events with Interstate Hotels. None of the costs of these employees or their marketing efforts are considered to be a cost of the convention center itself. But they should be.
Lancaster City plans to make extensive "streetscape" modifications throughout a large part of downtown Lancaster, in an attempt to make the streets more attractive for convention attendees and other visitors. This will include a band of bricks laid in a herringbone pattern in the sidewalk next to the curb, along with additional street lighting, plus standards for trash receptacles and other sidewalk furnishings. Over the next year or so, taxpayer dollars will fund the initial construction. But in the future, property owners will have to pay for the increased cost of these new design standards whenever they do any work on their sidewalks. To pay for these changes, Lancaster City will be spending $2 million from bonds issued primarily to build two new water treatment plants, on top of a similar amount of State grant money.
People who visit the hotel and convention center will need somewhere to park. The hotel will need 300 or more parking spaces for guests and staff. The convention center management expects that some events will draw 4000 or more visitors per day. Because of the hotel and convention center project, the Lancaster Parking Authority is constructing a $14 million 505-space parking garage in the second block of East King Street. Contract customers of the King St. garage, adjacent to the hotel and convention center, will be moved to the new parking garage to make space for hotel guests and staff. Since the Lancaster Parking Authority had previously borrowed money up to its legal limit, Lancaster City Council re-wrote the law so additional funds could be borrowed to build this new garage.
Another issue is the need for police patrols and traffic control around the hotel and convention center. Four thousand or more new visitors to downtown Lancaster will create a LOT of traffic. And the area around the convention center main entrance near Queen and Vine is well known to be less than safe after dark.
There will definitely be a need for additional police patrols and traffic control in downtown Lancaster whenever the convention center is occupied. The problem is, there is no money in the Lancaster City budget for additional police staffing. The only alternative will be to relocate police officers out of residential areas of Lancaster City, in order to meet the needs of the hotel and convention center. This means the people of Lancaster City will have to pay for the project in reduced police patrols and slower police response times.
Those behind this project have repeatedly claimed that the cost to taxpayers will be minimal. But the hidden costs of this project have already hurt the residents of Lancaster, and will continue to do so long into the future.
