Providing Greater Lancaster with an Alternative Source for Local News and Commentary  _________________________________________________________
  November 24, 2006                                         Publisher: LLC                         Volume 1, Number 16

Authority Shoots Craps with Center Bonds

Wachovia Bank is not offering to lend the Convention Center Authority money, but rather to provide a Letter of Credit, a form of bond guarantee.

The Letter of Credit is only for 5 years. However, the bond terms will be about 37 years. If the project performs well, the Letter of Credit would likely be renewed at the end of the 5th year.

But if the project does as poorly as predicted by the PKF Feasibility study, it is unlikely that a new Letter of Credit would be available.

The loan would cease to be rated double or triple "A" and instead likely become "junk bonds" with a high default interest rate that would greatly increase the cost of servicing the bonds.

Much higher interest rates would require some sort of bail out at taxpayers' expense, or for the project to sit idle for lack of funds for operations.

In short, the five year Wachovia credit enhancement may serve to jump start the project, but this short term gambit greatly increases long term taxpayer risk.

Intelligencer Journal article
lauds casino revenue

A recent editorial stated: "Almost everyone 'in the know' has heard the rumors about an understanding with the Rendell administration that a casino will be part of the convention center/hotel project. Economically, if not morally, it certainly makes sense." Jack Buckwalter, Chairman of the monopoly Lancaster Newspapers, Inc., termed the rumors "ridiculous."

On November 17, 2006, the Intelligencer Journal led off an editorial by saying: "For better or worse, gambling has arrived in Pennsylvania."

It continues: "Naysayers opposed the state lottery when it began in 1972. Since then, the lottery has provided $16.5 billion to a variety of state-run programs including property tax and rent rebates, mass transit funding for older residents; the PACE and Pacenet - the nation's most comprehensive prescription program for senior citizens.

"We are not fans of gambling, but many people are. During New Jersey's budget shutdown this summer, the state lost $1.3 million in taxes each day.

"If Wednesday is any indication, Pennsylvania's take could equal that."

Is the groundwork being laid to bail out the Lancaster Newspapers, Inc. 44% sponsored Convention Center / Hotel project by later installing a casino? "Ridiculous"? If the project actually gets built, we may soon find out.

Is it just about the
Convention Center?

The Convention Center/Hotel project was conceived about nine years ago at a cost of $75 million and is now a bloated $180 million (including funds already spent). The vast majority of the funds are to come from government grants and subsidies or loans guaranteed by the public at taxpayers' risk.

The proposed project is:
1) Seven times the cost of Clipper Magazine Stadium,
2) Opposed by 78% of county residents with an opinion according to a Fox 43 poll,
3) Recommended not be built by the recent PKF Consultants� Feasibility Study,
4) Estimated to lose up to $4.8 annually by PKF.

But the Lancaster Newspapers' editors continue to "see, hear, and speak no evil" when the news concerns their parent company's business interests.

Instead, the 44% sponsor of the project continues to waste ink and paper (and tarnish its reputation) in order to denigrate two brave commissioners seeking to protect taxpayers� interests by limiting guarantees.

Observers note an almost total disconnect between the many positive things that take place and the negative reports concerning the weekly commissioners' meeting. The citizens of Lancaster County deserve better.

In short, this issue is about the future of Lancaster County and City. And the time has come for the public to make the monopoly newspapers aware of its outrage by hitting them were it the pocket book!

Misleading New Era headings sensationalize non-events

On Nov. 10, 2006, the Lancaster New Era headline screamed, "Conestoga View making money when sold. Financial records reported in monthly meeting minutes show nursing home turning profit at time of sale in September 2005."

That would have been real news! But look what they say later in the article:

"It's hard to determine the precise financial situation from the minutes of 2003 and 2004 because complete accounting is not provided.... All figures represent operating cash flow in and out of the facility. Depreciation was never mentioned in any of the available reports. But the commissioners did consider capital expenditures in their decision to sell."

Here is a message for the New Era: "Profits" is what is left over after deducting Operating and Capital Expenses from Gross Revenues!

Apparently the New Era is only taking into account Gross Revenue less Operating Expenses without allowing for Depreciation and Capital Expenditures. That's the same as saying someone is fully dressed when they are wearing hat, shirt, tie and jacket but no pants, socks or shoes.

The monopoly Lancaster Newspapers continue their deceptive practice of misleading headlines and opening paragraphs to make the Commissioners look bad. Shame on them!


Talk Back!
Make Your Voice Heard.
Write a letter, make a call:

Edward G. Rendell, Governor
225 Main Capitol Building
Harrisburg PA 17120
(717) 787-2500
E-mail the Governor here.

Gibson Armstrong, State Senator
(717) 787-6535
[email protected]

Mike Sturla, State Representative
(717) 295-3157
[email protected]

J. Richard Gray, Mayor, City of Lancaster
(717) 291-4701
[email protected]

Ernest Schreiber, Editor
Lancaster New Era
[email protected]
(717) 291-8733

C. Ray Shaw, Editor
Intelligencer Journal
[email protected]
(717) 291-8650

Marvin Adams, Editor
Sunday News
[email protected]
(717) 291-8788