The Way I See It: ECCCA and the New Bayfront Hotel
The County looks to become involved in a new hotel on Erie's Bayfront.
Recently, the Erie County Convention Center Authority announced plans to build a new hotel near the Bayfront Convention Center.
The project, which is being expedited due to a $25 million state grant awarded to the ECCCA to be distributed over five years at $5 million annually, will cost a little over two times the funding amount of $55 million and will be developed just west of the Convention Center at 1 Sassafras Pier. The authority only applied for the funds this past April, and in order to receive the funding, they also had to provide proof that the project will create 300 new jobs. And on Thursday, Sept. 5, Gov. Tom Corbett's office announced a release of the first installment of the grant.
The plans call for covering the current loading area at the Convention Center and building the hotel above that. This project also moves the construction away from the proposed development at the former GAF site, which has been a critical conversation piece over the last couple of years and has included a hotel in the original proposed plan
So, in some ways, this makes perfect sense.
Another hotel is needed in that area to accommodate convention goers and the like, as currently, it's been suggested that the Sheraton cannot provide enough lodging for those attending events at the Convention Center to regular guests and tourists. It will also provide less expensive rates than the Sheraton, and it will also create those 300 new jobs. And the fact that it's not being developed on the GAF site is probably music to many ears, given all public discussion on developing the property to promote anything but another housing arena.
Yet, in some ways, this project also makes little sense.
Why are we having a county authority run a business that probably makes more sense to be in the hands of private investors? And it's not as if private investors aren't interested.
Scott Enterprises has already talked about building a hotel on the land they own next to the Blasco Library. In fact, the company already went on record with plans to move forward on the project.
In addition, public dollars will likely need to be used to cover the remaining costs of this new hotel project – ultimately issuing another bond upwards of $30 million. And as it is public, the property will also be exempt from paying local property taxes.
Immediately, one major past (and still present) issue comes to mind, Erie: Pleasant Ridge Manor. Remember all the headlines about whether Erie County should be in the nursing home business at all?
One of the major arguments was that no one on County Council had the experience necessary to properly run the nursing home, which without more knowledge, seems to mirror this case. While some on the authority do have investment experience, the experience in hotel management and operations – let alone direct hotel investment – is lacking, which means we're likely to hear questions of whether the county should be so directly involved in this project and the multi-million dollar investment set to dot a chunk of land in the crown of our chartered and coveted Bayfront property.
Yet, the real question here is not the economic benefits this project might generate. The most important question to ask is: Why is public funding needed at all? If it is such a good deal – and necessary – why does private financing not capitalize on this and capture all the benefits, especially since a private investor has already expressed public his interest? And that $25 million – could it have been better utilized elsewhere – like, say, education?
There are just some things that the private sector can do better than government.
The way I see it, without more information, I just don't know if the county should be checking in to the hotel business.
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