Thu, Nov 26 2009
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Published May 31, 2009 01:04 am - This month marks the fifth anniversary of the opening of the Lodge and Conference Center at Geneva-on-the-Lake, an economic lifesaver or a $21 million noose, depending upon whose head is talking. DOES IT HELP OR HARM? Facility marks its fifth year in business By CARL E. FEATHER - Staff Writer - cfeather@starbeacon.com Star Beacon This month marks the fifth anniversary of the opening of the Lodge and Conference Center at Geneva-on-the-Lake, an economic lifesaver or a $21 million noose, depending upon whose head is talking.
The lodge is owned by the county, built on state land and operated by the Delaware North Cos. under a 10-year contract. County commissioners Duane Feher, Robert J. Boggs and Deborah Newcomb envisioned the project as an economic development cornerstone that would help Ashtabula County transition from an economy based upon manufacturing to one of tourism. None of those commissioners stuck around to bring the project to maturity, however. Commissioner Joseph Moroski came aboard in 2002, by which time the county already had committed to the project. “You have to look at it as sort of a mixed entity,” says Moroski, a Conneaut resident. “On the one hand, when you look at it, there is no question it brings people into Ashtabula County, helps the tourism industry and probably helps some of the wineries.” On the other hand, there is the issue of the lodge as a business deal. “What I hear from constituents is that this is an example of a government project that was over price and over budget, yet is underperforming and underdelivering. … The beating I take from constituents about it is that it’s another example of where government gets involved where it doesn’t belong.”Great expectations For the first 59 months of operation, the county-owned Lodge and Conference Cener at Geneva-on-the-Lake has posted a net loss of $863,451. This figure does not include debt service or the money the county put into the project prior to opening its doors, or the money the Convention Facilities Authority (CFA) has spent on the lodge for amenities. James Hardin, the county’s budget director, said it would be very time-consuming to tally all the expenses associated with the lodge over the past decade. However, based just on the debt servicing cost, that figure is well over $5 million, and the county still owes more than $20 million in lodge debt. It wasn’t supposed to be this way, however. This economic engine was supposed to have been fueled by taxes collected from the prosperity it generated. A pro forma spreadsheet prepared in early 2004 projected that by 2007 lodge finances would move from red to black and, by the end of 2009, would have generated $1.4 million for county coffers. Instead, the lodge this year will cost the county’s general fund more than $1 million in debt service on two loans, one of which does not pay down the principal. It has yet to return money to the county’s coffers. Lodge general manager Jeannette Petrolia said one explanation for the big drop is that the hospitality industry has never recovered from Sept. 11’s devastating impacts. “The hospitality world imploded,” she said of the terrorist attacks’ effects. In addition, like all other businesses, rising costs for energy, labor and benefits have whittled away at profits, and on the restaurant side, the cost of meat has increased significantly. Still, the lodge has performed better than many of its competitors. “When I look at the numbers today, our margins and percentages are very consistent with the rest of the industry,” Petrolia said. “We run a lean operation.” 
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