Published: February 07, 2008 11:58 am      

County can not support Canal Place authority

CUMBERLAND - The Canal Place Preservation & Development Authority will consider cutting back to a "care-taking operation" and possibly eliminating CanalFest and other events until a new funding source can be found.

Allegany County Administrator Vance Ishler met with Canal Place representatives last week. Authority representatives asked the county for a portion of the hotel/motel tax from the proposed Fairfield Inn & Suites by Marriott to be allocated to the authority.

"There was very little good news to come out of it," said Howard Buchanan, chairman of the authority's board of directors, of the meeting. "We were advised by (Ishler) that that's not going to happen."

Ishler said the county's portion of the 8 percent hotel/motel tax is already earmarked for security and maintenance of the Allegheny Highlands Trail, Buchanan said.

The board of directors is scheduled to meet at 1:30 p.m. Feb. 19 at Canal Place. At that point, said Buchanan, board members will appoint an interim finance committee to "redo" the budget, "taking out the subsidy and seeing what we're left with."

The "crisis," Buchanan said, could cost four people their jobs, including three full-time authority employees and a contract maintenance man.

"Well, we don't really know that," Buchanan said. "That possibility exists. It's unfortunate. Other than going back and us dividing up the budget to see what we can give up ... there's no actual Plan B."

The county's rejection amounts to a $94,450 setback for Canal Place. That number is based on total revenue generated by the proposed hotel being $3,449,250 - at 70 percent occupancy rate and $125 each night per room.

The state subsidy Buchanan referred to equals $100,000 - down from $300,000 in past years. Buchanan and others have always been under the impression the subsidy was a short-term gift. In recent years, the state has decreased its annual gift by $100,000.

Last week, Delegate LeRoy Myers asked the House of Delegates' Budget and Finance Committee for $100,000. There, state lawmakers were reluctant to commit that amount without verifiable financial support from local government, Myers said.

At this point, even the $100,000 is not guaranteed, Myers said.

"We have a subsidy that is going to be eliminated completely by the state next year, and the reason stated is that we don't have local support from our county and (Cumberland)," Buchanan said.

Buchanan said Tuesday the board will consider reducing CanalFest, held in July, from a two-day festival to one day, or eliminate it all together. The board will evaluate other activities, including the circus, accommodations for the bicycle trail and tent grounds.

Most, if not all, of the activities "will have to be put on hold until our override," Buchanan said. "Canal Place will eventually get an override for the hotel. At that time, the revenue that we lose from the state will be ... replaced by that override."

From July 1, 2008, through June 30, 2009, Buchanan said the authority will rely on fees from rental income and parking.

"That whole year, we will have no funds and we have to resort to going back to a zero-based budget and eliminating every possible service that we can," Buchanan said. "We won't give up anything that's necessary for the safe and healthy operation of the facility."

Buchanan reiterated his belief that the signing of the lease between the state, Canal Place and Trestle Development will take place this month. The new hotel is expected to open a year from that date.

Contact Kevin Spradlin at kspradlin@times-news.com.