Lancaster County Convention Center Authority approves Marriott expansion

The Lancaster County Convention Center Authority signed off Thursday on an expansion plan for the Lancaster Marriott at Penn Square.

With a 6-1 authority vote, Penn Square Partners, a private company that owns the Marriott franchise, will move ahead to enlarge the nearly six-year-old downtown hotel to the east with a 12-story, 96-room addition.

The agreement approved Thursday adds the hotel annex to the governing terms of the public-private partnership for the hotel/convention center.

It’s now as if the complex has 395 hotel rooms, not the 299 it opened with in June 2009.

Penn Square Partners says it hopes the additional hotel rooms will attract organizers of larger events who want more rooms within walking distance.

The 68,100-square-foot annex would be constructed where now stand three buildings acquired by a High Real Estate Group affiliate between between 2009 and December 2014 for a combined $1.3 million.

A different High Real Estate Group affiliate, Penn Square General, is the general partner in Penn Square Partners.

Penn Square Ltd., an affiliate of LNP Media Group, publisher of LNP and operator of website Lancaster Online, is a limited partner in Penn Square Partners.

“We’re very pleased, very excited about moving on to the next phase of the project,” said Mark Fitzgerald,  Penn Square Partners’ executive vice president and chief operating officer.

Fitzgerald said the next steps are to enlist architects to draw up more detailed plans for the hotel as they navigate through the approval process for a land development plan.

Costing $23 million to $25 million, the project would include first-floor retail space and a rooftop lounge and bar.

Depending on how quickly various approvals are secured for the project, construction could start as soon as late 2015. That would put the annex on track for a mid 2017 opening.

Since the annex would be in the City Revitalization and Improvement Zone (CRIZ), where state taxes can be tapped for redevelopment, Fitzgerald said Penn Square Partners would pursue a CRIZ grant to pay for a “small portion” of the project, perhaps several million dollars.

Under the terms of the agreement, the annex to the Marriott will be owned by the city Redevelopment Authority and leased to Penn Square Partners, which is the same arrangement for the existing Marriott.

The city Redevelopment Authority is a tax-exempt entity, but Fitzgerald said Penn Square Partners would increase the payment it makes to it so that it at least covers the amount in taxes now being collected on the properties to be torn down for the hotel.

With additional hotel rooms, the Lancaster County Convention Center Authority could see more revenue from the new events and could also have its utility costs reduced since it would be paying for a smaller portion of the overall expenses.

An estimate presented Thursday pegged the additional revenue for the Lancaster County Convention Center Authority at $210,000.

While he said he was in favor of the hotel addition, authority board member Scott Bowser voted against the agreement, saying he wanted more time to consider the terms of the food and beverage concessions.

Kevin Molloy, executive director of the Lancaster County Convention Center Authority, stressed that while the authority needed to give the go-ahead to Penn Square Partners, that’s all it has to do.

“This is not an LCCCA project, this is a Penn Square Partners project. This is their development, their project,” he said.