Lancaster County Convention Center has good month, but future cloudy
  • The Lancaster County Convention Center is seen from South Queen Street in this file photo.

By BERNARD HARRIS
Lancaster
Updated Dec 20, 2012 23:01

Lancaster County Convention Center finances had a good month in November.

Reserve funds topped $5.6 million for the public meeting center. And center officials believe this month will also end well.

That means the 20 percent stake of the Lancaster County hotel room tax which has been diverted to the Lancaster County Convention Center Authority will once again be paid to the Pennsylvania Dutch Convention & Visitors Bureau.

That money, which totals about $900,000 annually, has been going to the center authority since spring when the reserves required under the center's bond indenture fell below $5.25 million.

But the short-term good news at the Convention Center Authority's Thursday board evening meeting was overshadowed by a slightly more distant future.

The authority faces a refinancing of its $64 million in bond debt on March 1. Rates on those bonds could jump, prompting fear the authority could default.

Kevin Molloy, authority executive director told his board that he has met repeatedly in recent months with representatives of Wells Fargo, the bank that holds the center debt.

While he remains hopeful, the talks "have not been concrete," he said. He has seen little progression in attempts to get a deal with better interest rates.

Molloy said he also has monitored talks between the bankers and Lancaster County Commissioner Scott Martin.

While he praised Martin for his involvement, Molloy did not report progress.

The uncertainty is hurting center sales efforts, General Manager Mark Moosic reported.

His sales team recently spent two months negotiating with a corporate group that would fill the center in August, when the exhibition hall is usually empty. The client was considering signing a three-year contract.

Instead, they signed for one year — and only after Molloy wrote them a letter pledging the center would be open next year, said Moosic.

"We've got to get past this," Moosic said. "This is a great facility and a great town, but we've got to get past this."

Moosic said the sales staff are still making reservations. In fact, there are more weddings and special events already booked for the center for 2013 than have been held this year, he said.

But, Molloy noted, those special events are not what the center was built to accommodate. The center's mission is to bring large events to the county that otherwise would not have come here.

Since opening in June 2009, the center had done that with large quilt shows, volleyball tournaments, religious meetings and association conferences. Attendees of those events stay at county hotels and spend money at restaurants, gas stations and stores.

Those events, which have brought as many as 24,000 people to the center, are typically booked two or three years in advance.

Advance bookings for 2014 and 2015 are suffering from the financial uncertainty, said Moosic.

Also uncertain are the countywide marketing efforts of the visitors bureau. That organization has seen its state grants reduced, and the restoration of room tax revenues may  be temporary.

The bureau still gets all of a 1.1 percent excise tax on county hotel rooms, totaling about $1.38 million annually.

Since the opening of the convention center, the marketing of the facility to conferences, associations and other groups has been combined with the bureau's efforts to market the county.

Yet along with funding uncertainty the bureau is without a president, is losing its vice president and is undergoing a major restructuring of its board.

Center authority board member Larry Hinnenkamp on Thursday questioned whether the authority should look elsewhere for a marketing partner. Another entity might be more willing to focus on the success of the center, he said.

Fellow board member Sharron Nelson voiced her support of "quest for a process." Board Chairman Kevin Fry offered to lead the study.

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