Who owns Giant Center?

Investigations

HERSHEY, Pa. (WHTM) — A huge line.

Fittingly, a Giant crowd.

A very hot ticket.

Cher got the Giant Center party going in October 2002, as the headliner on opening night.

She was the first of many big names to take center stage in the Derry Township arena.

The Hershey Bears prefer center ice to center stage, but they perform weekly during the American Hockey League season.

But who exactly owns Giant Center?

It’s a simple enough question.

“I do not know the answer,” Swatara Township Commissioner Tom Connolly said.

But not easily answered.

“It’s very complicated,” concedes Dauphin County Chief Clerk Chad Saylor.

Let’s begin at the beginning. Ground was broken on the Hershey land in November 2000.

In a time when Philadelphia and Pittsburgh were getting state grants to help fund two sports stadiums each, Pennsylvania kicked in $25 million for Giant Center. Hershey Entertainment and Resorts ponied up nearly $15 million and the feds contributed nearly $3 million more toward the $95 million price tag.

But none of those entities is the owner.

The Derry Township Industrial and Commercial Development Authority is technically the owner of Giant Center which is technically labeled a “regional sports facility” in official paperwork.

To pay for the arena, bonds were floated and a hotel tax created by Dauphin County Commissioners. In 2001, the tax was three percent on all hotel stays in the county. Commissioners upped that to five percent in 2008. So any visitor that stays in a hotel in Dauphin County, whether they’re going to Giant Center or not, is contributing to the building.

The tax revenue has steadily increased as more hotels have been built and the price of rooms has gone up.

The tax generated $11.6 million last year, according to data provided by Dauphin County. Just over $3.1 million went to Giant Center bond and interest payments. Just under $3 million went to the Harrisburg-Hershey Regional Visitors Bureau and $2.3 million went to the county to be used, by law, for tourism boosting projects.

Over the past 19 years, that tax has sent just under $50 million to Giant Center. The deal runs until 2030, so it could possibly generate $60 million more.

“Like your mortgage, it’s not just the cost of the house,” Saylor explained. “There are interest payments that add to that cost considerably.”

A mortgage paid down by visitors to hotels in Dauphin County. When the last bond payment is made, the keys to the arena will be handed to Hershey Entertainment and Resorts.

It’s called the Sweetest Place on Earth, and some could argue it’s a pretty sweet deal for the company.

Saylor disagrees, calling it a win-win for all involved and a perfect example of a successful public-private partnership. He notes that tourism is a whopping $2.2 billion industry that creates 20,000 jobs.

“Hershey, Hershey Entertainment, the Giant Center are the beating heart of tourism in this county,” Saylor said.

Hotel stays keep money pumping through that heart, and Hershey E&R does own many of the hotel rooms, but not all.

“We have several thousand people per night that stay in Swatara Township that we are responsible for,” Connolly said.

Swatara Township, just outside Hershey, has 17 hotels and 2,400 rooms. Connolly says his residents fund the police, fire and EMS services, and thinks some of that hotel tax should come back to his community.

“I feel some of this money should be used on public safety in the areas where those taxes are accumulated in,” Connolly said.

Dauphin County Commissioners have their own multi-million dollar pot of money from the hotel tax. Last year, they granted in a public process nearly a hundred grants that had some tourism connection. They included $100,000 to the Big 33 Football game and the Pennsylvania Horse Show. The NRA got $75,000 for its popular Outdoor Show. Even Arooga’s Sports Bar and Grill got $20,000. Saylor says its training facility is in Dauphin County.

“When they do training for their staff across the country, they come here to do training. They’re staying here. That’s a head on a bed. It’s a little liberal interpretation, but it fits the definition,” Saylor said.

Connolly argues keeping the head safe in the bed should be priority one.

“I don’t know if the answer is with Hershey, with the discretionary funds (at the county), but there definitely needs to be a share for public safety funds,” Connolly adds.

“I understand his frustration,” Saylor said of Connolly’s argument but called it “provincial thinking” that misses the bigger point. Saylor says all of that tourism is attracted to facilities like Giant Center, and they pump lots of money into businesses in all of the surrounding communities, including Swatara Township, which, in turn, pay taxes.

“I think there can always be questions,” Saylor said. “Priorities for some are not priorities for others.”

Hershey responded by saying that an independent study found Giant Center, by itself, has an economic impact of $145 million a year.

While it’s not paying traditional taxes on Giant Center, it has been making payments in lieu of them. Last year, more than $1 million went to the school district, county, and Derry Township.

It also added that over the last 10 years, Hershey has paid $7.4 million in upgrades to Giant Center.

As for money made, Hershey says nearly all concert ticket prices go to the performer and promoter. It does receive concessions and parking after taxes and fees are paid.

As owners of the Hershey Bears, it gets to keep all of the profits generated by minor league hockey.

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