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$178 million the Final Tally for the Lancaster County Convention Center
 and the 300 room Marriott at Penn Square; Includes Project's
 Defense Against 12 Lawsuits
By Jack Brubaker, Lancaster New Era, Pa.McClatchy-Tribune Regional News

June 19--The $178 million final bill for the Lancaster County Convention Center and Lancaster Marriott at Penn Square includes all costs since the project began a decade ago.

That's all the architectural, legal, consulting, administrative and other fees that preceded construction, as well as construction itself.

Construction costs for the buildings alone -- the 220,000-square-foot convention center and 300-room hotel -- total about $63 million for the Lancaster County Convention Center Authority and more than $45 million for Penn Square Partners and the Redevelopment Authority of the City of Lancaster. Some of that spending was for areas common to the convention center and hotel.

That $108 million was spent on concrete, steel, roofing, plumbing, electrical work, elevators, escalators and other "hard" project costs.

The largest development contract -- nearly $37 million for general trades -- went to High Construction Co., an affiliate of High Real Estate Group.

Miller, Long & Arnold, of Halethorpe, Md., received the next largest construction contract -- $16 million -- for providing concrete.

Developers say there was nothing particularly unusual about the construction, except that the work has taken longer than anyone anticipated and has three times delayed an opening this spring.

The $108 million includes $7.1 million for stabilization and restoration of the late 19th century Watt & Shand department store facade. The Convention Center Authority and Penn Square Partners shared that bill.

And it includes $1.6 million to restore the exterior of the early 19th century Montgomery House in the first block of South Queen Street, paid for by Penn Square Partners.

"While it cost us a lot of money to do all those (restoration) things," says Mark Fitzgerald, executive vice president and chief operating officer of Penn Square Partners, "I think it's really going to pay dividends long-term."

The Convention Center Authority's executive director, Kevin Molloy, also believes the historic architecture will "enhance the experience" of visitors and provide more architectural interest than the "typical shoebox" convention center.

The project's developers also are rehabilitating the Thaddeus Stevens and Kleiss Tavern buildings, near the South Queen-East Vine street intersection, and the Lydia Smith building in the middle of the first block of East Vine.

The Historic Preservation Trust of Lancaster County is paying for all exterior and interior renovations to those buildings. The total bill will be about $12 million, all in addition to the $178 million cost of the convention center/hotel.

The difference between the project's $108 million construction price tag and the $178 million bottom line includes everything else -- from the costs of site acquisition and architectural and engineering fees to insurance premiums and furniture and other fixtures.

Also, it is currently costing $58,500 a month to operate the Convention Center Authority.

And the bottom line reflects the project's defense against 12 lawsuits.

The total legal bill ran to $9.7 million, including costs of litigation and the normal legal costs associated with building a project of this type.

Steve Geisenberger, the project's accountant for the past two years, calculates that the Convention Center Authority paid attorneys approximately $3.8 million solely to handle litigation.

Most of those lawsuits were with county hotel owners, who opposed the hotel tax, and the former county commissioners, who opposed the county's guarantee of a construction bond.

Geisenberger suggests that much more of the total legal bill could be associated with litigation because attorneys had to attend Convention Center Authority meetings they otherwise would not have attended.

The Stevens & Lee law firm earned nearly $8 million of those fees. In 2007, the firm released a report by Chief Justice Emeritus Stephen Zappala that justified all of the firm's itemized expenses except $60,000, which Stevens & Lee did not bill the authority.

In addition, consultants took home $2.8 million from the Convention Center Authority.

Maurice Walker's Bulls Advisory Group, of Bowie, Md., earned the most: $921,000. Some of that money paid for accounting his firm did before Geisenberger's firm, Walz, Deihm, Geisenberger, Buckley & Tennis, became involved with the project.

Dan Logan, of Medford, N.J., came in a close second with $835,000 in consulting fees.

More than a quarter of that money paid for marketing and accounting work on the Ramada Inn at the Brunswick in 2004, when the Convention Center Authority was considering moving the project to Lancaster Square. Logan previously had served as a vice president of operations for the Hotel Brunswick.

Accountants, including auditors, received $445,531 from the Convention Center Authority. That includes $170,000 for Geisenberger's firm, Walz, Deihm.

The Convention Center Authority also spent $725,000 on public relations for a project that probably has drawn more comment -- pro and con -- than any other development in the history of Lancaster County.

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To see more of the Lancaster New Era, or to subscribe to the newspaper, go to http://www.lancasteronline.com/newera.

Copyright (c) 2009, Lancaster New Era, Pa.

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