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
- Internet Upgrade
- Monumental Stair Railing
- Ganging Equipment for 1200 Chairs
- Conference Room Chairs
- Fire Control Panel Upgrade
- Meeting Room Door Replacement
- Copier/Fax/Scanner
- Kitchen Ice Machine
- Twin Basket Fryer
- Double Convection Oven
- Corridor to Parking Garage Wallcovering
- Laptop
- Back of House Locking System
- Epoxy Concession Kitchen floor
- Elevator Door 3D sensor
- Office Carpet
- Skid loader with snow removal attachments
- Mobile Riser Stage and Stairs
- 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
