Contributing to the economic vitality of Lancaster by providing an inviting,
world-class business and event destination for guests.

Collaboration Agreement 30 Month Update

Collaboration Agreement 30 months into the 5 year term – below is comparison data to help understand the successes from the Collaboration Agreement (CA).

LCCCA Series 2014 Bonds Reserve Balances

December 31, 2013        $ 5,155,930.07

December 31, 2014        $ 4,969,892.39

December 31, 2015        $ 5,970,994.27

December 31, 2016        $ 7,502,428.38

 

Annual Bond Interest & SWAP Expenses

SWAP*              Bond**             Total

Expense            Interest             SWAP & Interest

$ 2,225,703.20   $ 1,245,656.30   $ 3,471,359.50    2013 – Full year of Interest & SWAP expenses prior to CA

$ 2,242,251.77   $    999,667.79    $ 3,241,919.56     2014 – 1/2 year of Interest & SWAP expenses prior to CA & ½ year with new rates

$ 2,231,758.80   $    556,251.80   $ 2,788,010.60     2015 – Full year of Interest & SWAP expenses after execution of  CA

$ 2,102,258.51   $    673,276.58    $ 2,775,535.09     2016 – Full year of Interest & SWAP expenses after execution of CA

*SWAP Expense:

As US treasury bond rates go down, the LCCCA SWAP liability and monthly expenses increase.

When US Treasury bond rates go up, SWAP liability and monthly expenses decrease.

SWAP expenses are a function of US Treasury and the US Economy which are out of the LCCCA’s and Wells Fargo’s control.

**Bond Interest:

Is a function of the current 5 year term with Wells Fargo – 8/1/2014 – 7/31/2019

In 2013 and January to August 2014, the LCCCA paid an above market rate set forth in the 2011 Direct Purchase Term Sheet.  The Collaboration Agreement of 2014 permitted the LCCCA to enter into a 5 year term with Wells Fargo at a lower interest rate.  In large part the lower interest rate was due to four factors that was orchestrated by then Lancaster County Commissioner Scott Martin.

*Lancaster County Guarantee for life of Bonds

*City CRIZ Decreasing Bond reserve costs by paying $ 5,000,000 in FF&E Funds

*Discover Lancaster directing their portion of the HRRT tax to the LCCCA

*The LCCC Operator having the responsibility and funds to market and Sell Priority 1 & Priority 2 events -Discover Lancaster relinquished their responsibility to Market and sell the LCCC in the Collaboration Agreement.

 

Discover Lancaster

As a part of the Collaboration Agreement, Discover Lancaster directed their disbursement of the Hotel Room Rental Tax (HRRT) to the LCCCA from 7/1/2014 through 6/30/2019.  Discover Lancaster to receive annual distribution (starting 1/2017) from LCCCA Bond reserves over $ 5,750,000 up an amount equal to 20% of previous years HRRT.  On January 10, 2017 Discover Lancaster received $ 1,240,524 which was equal to the 20% of the HRRT collected in 2016.  The disbursement of $1,240,524.29 to Discover Lancaster was delivered to Kathleen Frankford at Discover Lancaster on January 10, 2017.  In the Collaboration Agreement financing model dated 7/24/2014, Discover Lancaster was forecasted to receive $ 186,150 in January 2017.

 

Lancaster City – Lancaster CRIZ Authority

*Funded the LCCCA FF&E Reserve per Collaboration Agreement.

*Current balance $ 2,205,810.89 (includes required 2017 payment of $700,000 from CRIZ Authority)

*Required FF&E Funding schedule

i.   2014 $ 500,000 Due By December 2015

ii.  2015 $ 500,000

December 23, 2015  LCCCA Received $ 1,000,000  (For 2014 & 2015 obligation)

iii.  2016 $ 700,000

January 11, 2016, LCCCA Received $ 700,000

 iv.  2017 $ 700,000

December 23, 2016, LCCCA Received $ 700,000

Total received from Lancaster CRIZ Authority to date – $ 2,400,000

 

LCCCA CRIZ Funded projects through December 2016

  1. Internet Upgrade
  2. Monumental Stair Railing
  3. Ganging Equipment for 1200 Chairs
  4. Conference Room Chairs
  5. Fire Control Panel Upgrade
  6. Meeting Room Door Replacement
  7. Copier/Fax/Scanner
  8. Kitchen Ice Machine
  9. Twin Basket Fryer
  10. Double Convection Oven
  11. Corridor to Parking Garage Wallcovering
  12. Laptop
  13. Back of House Locking System
  14. Epoxy Concession Kitchen floor
  15. Elevator Door 3D sensor
  16. Office Carpet
  17. Skid loader with snow removal attachments
  18. Mobile Riser Stage and Stairs
  19. Electrical Services for portable concession stand locations

 

Lancaster County – Guarantor of 100% of the Debt Service Reserve Fund of the LCCCA 2014 Series Bonds

Lancaster County Hotel Tax (using the 2014 Series Bond fiscal years)

*Fiscal year starting July 1, 2013 through June 30 2014

Base year total HRRT Collections                               $ 5,249,107

*Fiscal year starting July 1, 2014 through June 30 2015

First year of CA total HRRT Collections                    $ 5,708,189  8.75% growth

*Fiscal year starting July 1, 2015 through June 30 2016

Second year of CA total HRRT Collections                $ 6,021,881  5.50% growth

*Fiscal year starting July 1, 2016 through November 30 2016

Partial third year of CA total HRRT Collections        $ 3,208,448  5.85% growth

Lancaster County’s Bond rating (Important as it is the County’s Bond Rating that the LCCCA Series Bonds are priced).  In July 2014 Lancaster County’s Bond Rating was A1 with a negative outlook.  In June 2016 Moody’s changed the outlook from negative to stable where it remains as of this writing.

Lancaster County Convention Center Authority annual Officers Certificate.  The LCCCA Board approved a resolution Authorizing LCCCA Executive Director to execute the annual Officers Certificate under the Guaranty Agreement.  On December 1, the required LCCCA Officers Certificate was delivered to each County Commissioner and County Solicitor.

The LCCCA Officers Certificate stated the following:

*The Debt Service Reserve Fund had a value of $ 3,942,081.83 on December 1, 2016

*No deficiency exists in the Debt Service Reserve fund

 

Interstate Hotels & Resorts (IHR) – Operator of the Lancaster County Convention Center

*LCCC Operator IHR and LCCCA modified Qualified Management Agreement (QMA) to include their requirements in the Collaboration Agreement.

*Scheduled Operating Deficit of LCCC Vs Actual Operating Deficit of LCCC

                                                                                               Difference

Year    Scheduled            Budget             Actual              Scheduled to Actual

2014      784,387              784,387 *           757,731              $ 26,655 Improvement

2015      799,290             790,997              747,288             $ 52,002 Improvement

2016      814,477               791,435               754,381             $ 60,096 Improvement

*LCCC Operator IHR has marketed and made sales the LCCC for Priority 1 & Priority 2 events in concert with the Marketing Consortium

*LCCC Operator IHR has contracted HVS to conduct a study of the economic impact of the publically owned LCCC

*LCCC Operator IHR has made annual presentations to Lancaster County Commissioners

 

Marketing Consortium

Marketing Consortium meets quarterly to review Marketing plans, metrics of sales efforts, and discusses marketing and initiatives.

*Event Data

Definition:  Priority 1 Events

Multiple day, state, regional, and national conventions, tradeshows, corporate meetings and competitions that utilize the Convention Center Unit space and produce 500 or more peak night guestrooms and/or 1,500 total room night production (max 4 nights) with overflow rooms to Lancaster County Hotels that are above and beyond the rooms booked at the integrated Marriott hotel.  This business must also generate room rental and/or other ancillary revenues for the Lancaster County Convention Center

Priority 1 Events (Recap)

Year Days New Returning  Events Attendance
2009 6 2 0 2 11,800
2010 13 3 1 4 47,100
2011 11 1 2 3 46,800
2012 10 1 2 3 38,000
2013 7 0 2 2 30,500
2014 10 0 3 3 25,400 CA – July 2014
2015 13 2 2 4 28,867
2016 22.5 3 3 6 48,070
2017 16 2 3 5 58,000 Anticipated

Definition: Priority 2 Events

Multiple day, state, regional, and national conventions, tradeshows, corporate meetings and competitions that utilize the Convention Center Unit space and produce 300 or more peak night guestrooms and/or 900 total room night production (max 4 nights) with overflow rooms to Lancaster County Hotels that are above and beyond the rooms booked at the integrated Marriott hotel.

Priority 2 Events (Recap)

Year Days New Returning  Events Attendance
2009 0 0 0 0 0
2010 12 3 1 4 12,250
2011 5 1 1 2 7,320
2012 21.5 6 1 7 33,500
2013 25 7 2 9 48,000
2014 33.5 2 9 11 40,371 CA signed July 2014
2015 28 2 9 11 39,503
2016 27.5 3 6 9 45,448
2017 29.5 3 7 10 61,000 Anticipated

 

LANCASTER COUNTY CONVENTION CENTER MARKETING CONSORTIUM SCHEDULE OF FUNDING

 

MC Year 1

Funding Source:

Bond                   LCCCA               RACL               Quarterly                   Annualized

Reserves           Operations                               Funds Rec’d                  1/1 to 12/31

1-Jul-14             33,000 pd         8,750     pd     25,000 pd         66,750

1-Sep-14           33,000 pd         8,750     pd                                 41,750

1-Oct-14            33,000 pd         8,750     pd     25,000 pd         66,750

1-Dec-14           33,000 pd         8,750     pd                                  41,750                 

31-Dec-14                                                                                                        217,000

1-Jan-15                                                                  25,000 pd         25,000

1-Apr-15                                                                  25,000 pd         25,000

MC Year 2

1-Jul-15            36,250 pd         8,750     pd       25,000 pd         70,000

1-Sep-15           36,250 pd         8,750     pd                                   45,000

1-Oct-15            36,250 pd         8,750     pd        25,000 pd        70,000

1-Dec-15           36,250 pd         8,750     pd                                    45,000               

31-Dec-15                                                                                                         280,000

1-Jan-16                                                                    25,000 pd         25,000

1-Apr-16                                                                    25,000 pd         25,000

MC Year 3

1-Jul-16             48,500 pd         8,750     pd        25,000 pd         82,250

1-Sep-16           48,500 pd         8,750     pd                                     57,250

1-Oct-16            48,500 pd         8,750     pd        25,000 pd         82,250

1-Dec-16           48,500 pd         8,750     pd                                     57,250               

31-Dec-16                                                                                                        329,000