The news which emanated from the City of Warren Convention Center Authority on Friday represented a major - and we believe - positive shift in the on-again-off-again hotel/convention center project in the city.
According to the authority and the developer, the taxpayers will no longer be a partner in the project. Essentially, one of the Ps will be removed from the public-private partnership.
And, in our opinion, that's the way it should have been from the start.
Yes, the city should still support the development, just as it should support any private-driven economic development in the city, whether it's a new pizza shop or a conference center. But, public-private partnerships to establish commercial enterprises are fraught with pitfalls and tiptoe dangerously close to using taxpayer money to underwrite private gain as well as giving one business an unfair advantage over privately funded competitors.
The event that apparently spurred this shift was a $5 million grant from the state that would have provided a significant portion of the development costs of the hotel/convention center. The grant has evaporated, though the circumstances of its disappearance depend on differing perspectives. A little more than a month ago, the city authority wrung its hands because the deadline for lining up public financing to accompany the grant hadn't been secured and the deadline was a mere month away. The deadline came and went; the authority met again and discussed seeking an extension. Tim King, the lead developer, announced he didn't need the grant.
By this time, the authority, already in debt itself, learned in a letter from King that he would be taking the project totally private.
The authority, which was created under Pennsylvania's Municipal Authorities Act, was established to do two things: Be a conduit for government grants and loans for the project, and provide some oversight to assure that the city's financial involvement is secure.
Without the public component to the project, it would appear that the authority is superfluous.
However, the question remains as to the disposition of public funds already expended on this project. The $162,000 spent on the new electrical service comes to mind. When asked if the developers would reimburse those funds, Mr. King replied that those funds had nothing to do with the authority. They do, however, have everything to do with the taxpayers, since they were reimbursed to GRO-Warren - which had siphoned grant money from another project - by City Council from the city's General Fund.
Maybe there will be a hotel/convention center on the city's waterfront, and maybe there won't. However, if there is, it will be the result of private enterprise and good old-fashioned entrepreneurship. And, that's the way it should be.