"Primarily, we have a situation in which the county commissioners ... have poisoned the environment to complete our financing," Dave Hixson, Lancaster County Convention Center Authority's executive director, said on the witness stand.

The Wednesday hearing at Lancaster County Courthouse was the first step in a lawsuit brought filed by project's developers against the county.

The developers want Judge Joseph Madenspacher to impose a temporary injunction on the commissioners that would prevent them from taking action -- including talking publicly about it -- against the project until the lawsuit is settled.

The commissioners' attorney, Howard Kelin, countered by saying crucial financial contracts keeping the project alive are invalid and that the developers have no legal standing to ask for a "gag order" on the commissioners.

"We don't think that's a proper use of this court system," Kelin said.

Should developers prevail in court, they can proceed with completing financing for the project unhindered by the commissioners. Developers already face financial hurdles as construction bids in May came in about $25 million over the $139.8 million budget.

The commissioners' opposition "isn't to protect taxpayers," Mark Fitzgerald, executive vice president of Penn Square Partners, testified. "It's an attempt to kill the project. The only people who are costing the people of Lancaster County any money are the county commissioners" through litigation and attorney fees.

If the commissioners successfully defend themselves, they may be able to repeal a crucial piece of the project's financing -- a 2003 guarantee to pay back half the debt service created by a $40 million construction bond -- and make changes to a countywide hotel room rental tax that funds the convention center authority.

"The evidence will show the guarantee was signed in violation" of a county ordinance by a previous county commissioner, Kelin said.

The convention center authority, Penn Square Partners and Redevelopment Authority of the City of Lancaster plan to build a 300-room Marriott Hotel and 220,000-square-foot convention center at and around the former Watt & Shand department store.

Supporters say it will spur economic development downtown.

Opponents say the risk to taxpayers is too great should the project fail.

Court proceedings will continue Friday at 9 a.m. in Courtroom 2. Attorney David Pittinsky, representing Penn Square Partners and the redevelopment authority, said Henderson and fellow county Commissioner Pete Shaub, a project supporter, will be called to the stand after Fitzgerald's testimony concludes

While much of Wednesday's testimony focused on several issues -- alleged secrecy by developers in drawing up bond contracts and whether Shellenberger and Henderson are to blame for cost overruns -- the debate focused on the county's partial guarantee of the convention center authority's $40 million construction bond.

Kelin said what is required by a 2003 county ordinance does not appear in the authority's bond contract with M&T Bank. The ordinance requires the contract to have specific language that the authority have "sufficient funds" to build the convention center.

That language, however, doesn't appear in the contract, Kelin said, and previous county Commissioner Chairman Paul Thibault signed the county's guarantee anyway.

"This was a taxpayer protection provision," Kelin said. "When you go to the indenture, it's not there."

The discrepancy, Kelin argued, invalidates the guarantee, which would undermine the developers' case against the commissioners.

Witnesses for the developers said the bond contract includes a provision that the authority have a "project budget." That term would mean a complete and balanced financial structure, and because it does appear in the contract, the county's guarantee is valid and irrevocable, witnesses said.

"We think there is no ambiguity in these agreements," Pittinsky said.

The county's guarantee stipulates that the county cannot repeal or change both the guarantee and the hotel room rental tax so long as the authority has bond debt.

Penn Square Partners includes general partner Penn Square General Corp., a High Industries affiliate, and limited partners Fulton Bank and Lancaster Newspapers Inc., publisher of the Intelligencer Journal, Lancaster New Era and Sunday News.

Dave Pidgeon's e-mail address is dpidgeon@lnpnews.com.