Siobhan Keane watched the giant crane hovering over Penn Square and began to wonder if she was in Lancaster because it was.

Keane and her husband, John, along with other investors, opened Annie Bailey's Irish Pub & Restaurant just up East King Street in 2006. They'd briefly considered York before deciding Lancaster had the demographics they were looking for, and was a great place for an Irish pub.

Back then, the massive convention center and hotel project was just getting started. Now it dominates the skyline, prompting Keane to ask her husband: "Did you know this was coming? Is this why we opened here?"

The answer: Sort of.

"It wasn't the main reason," Keane said. "It's not like we were saying, 'Oh look, there's a convention center opening, let's open a business,' " said Keane. But for Annie Bailey's to succeed in the long term, "things have to keep moving, the city has to keep improving," she said.

Nine years after the hotel/convention center project was unveiled, there's general agreement that things in Lancaster have improved. The operative question is: How much of this can be attributed to the $170 million project?

When proposed in 1999, the idea was that a downtrodden Lancaster needed a "silver bullet," something to kick-start interest and investment. It was to be the "keystone in the rebirth of downtown Lancaster," according to a newspaper article at the time. Said then-mayor Charlie Smithgall, "We're not going to get the stores and everything else downtown until we get the people, and this will bring the people."

But a funny thing happened on the way to the convention center.

Stores and "everything else" began popping up before work at Penn Square began. Buoyed in part by other projects — from Clipper Magazine Stadium to the Pennsylvania Academy of Music to smaller shops and restaurants — the rebirth of downtown Lancaster didn't wait for its keystone.

Now even those associated with the project dismiss the idea of the convention center as the key to the city's future economic viability; Lancaster no longer needs a silver bullet to save it. Still, developers say the huge project, one of the largest and most controversial in county history, is a vital factor in the mix.

Many downtown business owners agree. Anything that puts more people on the street is a good thing, they say. It's not so much what's being built on Penn Square that's important — it's that something is getting built.

"Having that building sitting there, still crumbling, would have done nothing for us," said Susan LePage, owner of Irish Gypsy, 52 N. Prince St. "Just as long as there was something there — a school, casino, apartments, whatever — that's what the city needed."

Looking ahead
Doubts remain about the fiscal viability of the project. Bookings at the 222,000-square-foot convention center have been slower than organizers would like: Eight consumer shows are scheduled for 2009, as are two trade shows and three other events, said Josh Nowak, director of sales and marketing for the convention center and adjacent, 300-room Marriott hotel.

There also are several events on the schedule for 2010, said Nowak, and there's definitely interest in the facility, he said. "The feedback we've gotten has been very good," Nowak said. "No one has said, 'Oh, this is in a city, or parking is going to be an issue.' They've said, 'We can't wait to see the facility when it's done — give us a call when it is.' "

Developers have said they need to schedule up to 100 events a year at the convention center — and maintain a 68 percent occupancy rate in the hotel — to meet projected budgets.

The center is being built by the public Lancaster County Convention Authority; the hotel is being developed by private-sector Penn Square Partners, a limited partnership that consists of general partners Penn Square General Corp., a High Industries affiliate, and Penn Square Ltd. LLC, an affiliate of Lancaster Newspapers Inc., publisher of the Sunday News, Lancaster New Era and Intelligencer Journal.

Randolph Carney is a city resident and project critic who says that something on Penn Square isn't necessarily better than nothing, if that "something" ultimately costs taxpayers more money than it brings in.

"An economic revitalization project at Penn Square was very important," wrote Carney in an e-mail. "But only a project whose anticipated operational losses are less than the economic revitalization that it can realistically expect to generate can possibly make any kind of economic sense."

At this early stage, the "economic sense" of the project remains difficult to gauge.

Building permits and the amount spent on new construction and renovations in the city have skyrocketed in recent years. In 2006, for example, the city as a whole saw a whopping $239 million in construction activity, more than three times the previous record.

But the convention center project alone accounted for $100 million of that total, noted Randy Patterson, the city's director of Economic Development and Neighborhood Revitalization.

Still, spending remains high, with more than $126 million in commercial permits citywide in 2007 — $31.4 million of it downtown, in the area bordered by Lemon, Prince, Farnum and Lime streets — and $11.8 million in residential spending, including $2.4 million in the downtown area. Residential spending surged in the first four months of 2008, topping $8.5 million citywide, nearly half of that ($4 million) downtown. Commercial spending totaled $25.9 million through the end of April, with $3.3 million of those improvements made downtown.

"Lancaster is now experiencing the beginnings of the benefits of investor confidence," said Tom Smithgall, senior vice president for development with High Real Estate Group and master developer of the convention center and hotel project. Word is getting around, he said, that "the city is a good place to invest your money." While the Penn Square project can't take all the credit, he does believe it can take some.

"It's become part of the revitalization of the city," he said. "The importance of this particular project is not as a silver bullet, but as a catalyst."

Reason to stay
For some, it has been exactly that.

In the late 1990s, Phil Wenger was thinking about moving. His restaurant, Isaac's, had been a downtown mainstay for more than a decade; but his suburban stores were outselling his Central Market Mall flagship, and evening sales in the city were particularly abysmal.

The convention center plan not only convinced him to stay in the city, it led him to move across the street to a larger space in the Fulton Building. Isaac's is likely to be the first restaurant conventioneers exiting the hotel will see.

"It was more than a catalyst for us," said Wenger. "And we've been sitting here waiting" for the project to be finished.

"If the hotel isn't full and conventions don't get filled, we'll have egg on our face," he said. He's betting that won't be the case.

Others say the project was just one of many factors in their decision to open or expand.

"When I opened 4½ years ago there was buzz, talk about [the project], but nothing was written in stone," said Kathy Frey, owner of Festoon, a boutique in The Shops at Hager. "It sweetened the pot as far as me deciding to open my business, and I think it will be wonderful when it happens. But my business is successful, and it's not because of the convention center."

Earlier this month, Dave Kirchner opened the Ad Lib Cafe in Place Marie, 51 N. Market St. "I wanted to be in the center of the city, near the Fulton [Opera House], Academy of Music, Central Market" and more, he said. "But the convention center is definitely an added bonus."

Similarly, Eric Davenport moved his advertising business from New Holland to 30 N. Lime St. because business associates told him Lancaster "is where the action is." The project is part of that, he said. "I did think of the convention center, and I think it will boost property values," said the owner of Davenport Design & Advertising. "But the whole town has a sense of movement, and the project isn't the only reason."

In this way, said Marshall Snively, deputy director and downtown marketing manager of the James Street Improvement District, the Penn Square project resembles Clipper Magazine Stadium: an anchor that perhaps gets new businesses, even residents, to take a closer look.

"You can't attribute everything that's happening to it," he said. "But one of the things we're doing is using the convention center project to show people that even in a slow economy, as things slow down in places like Baltimore and other bigger markets, downtown Lancaster is doing fine."

Conversely, the sense of momentum that the project has helped generate could help the project itself. The more restaurants and retail shops that open in Lancaster, the easier it will be to fill the convention center and hotel, said marketing director Nowak.

On the other hand, should the hotel and convention center falter, it could theoretically act as a drag on other businesses downtown and perhaps beyond.

"I'm old enough to remember the promises made in the early 1970s about the 'luxury Hilton' at the corner of North Queen and Chestnut," noted critic Carney. "It didn't generate enough business to keep even a few small shops open. Now look at what is left of the 'momentum' from that economic revitalization project.

"The real issue is, can businesses survive on 'momentum'? Certainly we've seen an increase in the number of people who frequent downtown restaurants. Is this sustainable?"

Speaking only for herself, Susan LePage thinks the answer is yes.

She moved Irish Gypsy from The Shops at Hager to North Prince Street because she needed more space; business was booming. And that was before the convention center, without however many additional feet the project might put on the street. If some of those people wind up in her store, she said, that's fantastic.

If not, she'll still be around.

"To this day, the ballpark and the convention center are great anchors, but it's all the little independents that make Lancaster what it is. There's still this perception of the big, bad downtown," the city as a dangerous place.

"That's what we need to get past."

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Gil Smart is associate editor of the Sunday News. E-mail him at gsmart@lnpnews.com, or phone 291-8817.