On a Thursday morning last month, around 11:30, Rick Dunlap pulled into the parking lot of his Front Street office building to find a group of news photographers dispersing. Dunlap, the public relations director for the Hershey Harrisburg Regional Visitors Bureau, was arriving late to work—his son was home sick—and he wondered what was going on. A white trash truck sat at the edge of the lot. In front of it stood Mayor Eric Papenfuse, chatting with reporters.
A week earlier, Papenfuse and the visitors bureau had announced they were reaching the end of a dispute going back nearly two years. The dispute centered on how to use a fraction of a tax on people staying overnight in Dauphin County hotels. Depending on where you stood, the fight could seem like a classic case of petty local politics or a key front in the city’s battle for financial stability. Papenfuse, naturally, took the second view. As he put it recently, the bureau displayed “a lack of urgency given the state of the city’s financial recovery.” Their attitude, he said, was “simply not good enough for the residents.”
But the mayor wasn’t there that morning for the bureau. He was there for its officemate, the Harrisburg Regional Chamber and its development arm, the Capital Region Economic Development Corporation, or CREDC. In September, CREDC hosted the mayor’s annual “State of the City” address, as it has for years. Speaking in a ballroom at the Hilton downtown, Papenfuse had taken a shot at his host during a portion of his address dealing with sanitation. City rules technically require every trash producer in Harrisburg, residential and commercial alike, to use the city’s services. As part of an effort to bring in more revenue, Papenfuse was urging people to end their accounts with “unauthorized private haulers.” “This includes, I am sorry to say, CREDC’s own Front Street offices,” he said.
Now, two months after his speech, the mayor was pleased to announce that CREDC had come around. The white trash truck was a newly bought “front loader,” one of two the city added to its fleet this year, equipped to pick up dumpsters from the front rather than the rear. Aside from being viewed as safer for sanitation workers, the trucks would allow the city to serve commercial accounts it had previously treated as exempt. The Thursday press conference served a dual purpose—to demonstrate the new equipment and to repeat the call for companies to drop their private haulers and sign on with the city. Just before cutting the ribbon on the truck, Papenfuse took a moment to say a “special thank you” to CREDC’s president, Dave Black, “who moved quickly to get this new dumpster in place.” A driver then hopped in the truck and, manipulating a pair of mechanical arms, lifted and tipped out a dumpster’s worth of the chamber’s and bureau’s trash.
The message was not lost on Dunlap. Dave Black is the vice-chair of the bureau’s board, as well as a political advisor of sorts to Mary Smith, its executive director. The press conference was one of dozens of such occasions, large and small, in which Papenfuse had used his bully pulpit to drive home his views on Black and the bureau. Over the preceding months, the mayor had variously accused them of being complacent, out of touch, entitled, and ineffective. In October, he announced CREDC would no longer be sponsoring the State of the City address. The next day, he described the chamber and the bureau as “white privileged outsiders.”
“This is interesting,” Dunlap said, when he learned what Papenfuse was up to. “Dave got this resolved, like, three weeks after whatever happened at the State of the City. Dave was already working on that.”
The mayor’s gestures are the public side of his negotiation with the bureau. Together with the private side of the dispute, reconstructed from emails and interviews with key players, they provide a picture of Mayor Papenfuse during a major battle of his first term—one that started before he took office and would end up demonstrating the powers and limits of his post. They tell the story of a hard-line negotiator who ultimately abandoned his initial goal, of cutting off funding to the National Civil War Museum. And they raise questions about the man at the helm of a city so recently on the brink of bankruptcy. How does Eric Papenfuse govern? And more importantly, is it working?
…
Black wasn’t at his office during the ribbon-cutting. He was across town at the Farm Show Complex, where CREDC was hosting its annual business expo. As the corporation’s president and CEO, Black has been on the board of the visitors bureau for a decade, in a spot reserved under the by-laws for a chamber representative. A former Clarion County commissioner, he is familiar with the operations of local government. “Dave was my politics guy,” Mary Smith, the bureau’s executive director, told me. Throughout the negotiations with the mayor, she said, “I refused to go to meetings without Dave.”
The hotel tax dispute started in late 2013, when bureau officials met with the newly elected Papenfuse in his transition offices. They briefed him on the relationship between the city and the bureau, a not-for-profit agency designated by the county to promote tourism in the region. The lion’s share of the bureau’s funding comes from the hotel tax, a 5-percent levy on overnight stays in Dauphin County hotels, which brings in a little more than $9 million in revenue each year. Under byzantine county rules, that money is parceled out to various recipients, with instructions on what it’s meant to be spent on.
The dispute centered on a portion marked for spending on the city. Imagine the bureau getting a suitcase filled with around $480,000 each year, labeled “for promoting Harrisburg.” Now imagine two-thirds of that money being lifted out and handed over to the Civil War Museum. That’s essentially what has been happening since 2008, when the bureau signed an agreement with former Mayor Stephen Reed to help fund the museum out of the city’s portion. In 2009, a couple of months before leaving office, Reed and the bureau extended the agreement to 2023. Black, describing the meeting in which he thought Papenfuse first learned of the museum subsidy, said the mention of it completely changed the tone of the conversation. “When the agreement with the Civil War Museum was mentioned, it was like somebody flipped a light switch,” he told me. “It was stunning.”
Papenfuse remembers it differently. He said he had learned about the subsidy at a meeting not with Black, but with Smith and a county political operative named Mike Musser. Musser’s involvement struck Papenfuse as significant; a lobbyist who runs Better Government for PA, a political action committee, Musser had worked on the campaigns of all three county commissioners—both the Republicans, Jeff Haste and Mike Pries, and the Democrat, George Hartwick. “Mary and Mike Musser came in to tell me that they had some documents they wanted to show me,” Papenfuse said. “I’m not really sure what the purpose of showing me the agreement was, but I interpreted it as they were bringing me information that I needed to know, and were possibly looking for a way out of it, and needed my help.”
Smith disputes this. For one, she didn’t recall any meeting that only she and Musser attended. Musser did come to the bureau’s early meetings with the mayor, she said, but it was as the bureau’s paid political consultant, not as a representative of the county. And she strongly contested Papenfuse’s account that the bureau was asking for his help in any way. “That is a misinterpretation of our willingness to work with a brand-new administration right out of the gate,” she said.
In any event, Black was right in sensing the mayor’s displeasure. Papenfuse thought the subsidy agreement was illegitimate. It “was done after Reed had lost the election, and was designed to sort of tie the hands of future administrations,” he said. He pressed the bureau to stop sending hotel tax money to the museum. But Smith, after speaking with museum officials and the bureau’s legal counsel, concluded they were obligated to keep paying. (There is “really no legal basis to stop making those payments,” Kevin Gold, the bureau’s lawyer, told me.)
The bureau’s refusal to cut off the subsidy infuriated Papenfuse. Smith recalled one meeting where, after she reported the bureau’s position on its obligations, the mayor “became enraged” and began berating her. (Papenfuse, for his part, acknowledged there was a meeting with Smith where he “pushed her so hard I made her cry.”) Despite this, Smith hoped the bureau could work with the city on other marketing initiatives. Over the first several months of 2014, she and the city began planning a “Summer in the City” campaign to be funded by the bureau. Papenfuse, meanwhile, prepared to go public with his attack on the museum subsidy, by bringing it to the Dauphin County commissioners.
…
In the midst of the early negotiations with the city, the visitors bureau relocated. Previously housed downtown, a block away from city hall, it moved to the commercial building on N. Front, a floor above CREDC’s offices. I met with Smith and Dunlap there last month, in a conference room with cheery travel guides stacked along the wall and a bowl of Hershey candies on the table. They described to me the “chain of leverage” that Papenfuse had tried to employ against the museum. His request to freeze city marketing, they felt, was his way of pressuring the bureau to cut off the museum’s subsidy. “That was the mayor’s strategy—pinching us by holding up what we do,” Dunlap said. “It was a ransom, if you will.”
The “Summer in the City” campaign went live in June 2014. At the time, neither the bureau nor the city disclosed the disagreement over the subsidy—in fact, the public didn’t even know the subsidy existed. After the campaign announcement, I had asked Dunlap to detail how the bureau spent the city’s marketing dollars. He told me it was hard to give exact figures, but he was confident the bureau had promoted Harrisburg with an amount “up to and exceeding” the city’s share. By that point, though, the bureau had been privately discussing for months how the majority of funds went to the museum. None of this became public until July, when Papenfuse appeared before the county commissioners.
In cutting the subsidy, what did Papenfuse hope to achieve? He now suggests it was a way of helping the museum, by nudging it towards a more robust effort to raise funds from other sources. “I thought the museum would want to be self-sustaining,” he said. Noting the agreement’s 2023 expiration date, he added, “The alternative is, in 10 years they don’t have a subsidy at all, and then they’re definitely going to fail. I’m trying to help them be successful.”
But in past statements, the mayor seemed to want something different—not the museum’s independent success, but its liquidation. After his appearance before the commissioners, he told reporters, “I think that it’s time we end what is essentially a failed experiment and begin to move towards a redeployment of those assets.” He suggested selling off the collection and finding a new tenant who could pay market rent, as opposed to the museum’s nominal $1 a year. The museum, which opened in Reservoir Park in 2001, was a major achievement of Mayor Reed’s. This past summer, after the state filed criminal charges against Reed, Papenfuse called the museum a “monument to corruption.” I asked him how applying that label was consistent with saying he wanted the museum to succeed. “I actually think calling them a monument to corruption, while perhaps very dramatically stated, could spur them to do better,” he replied. “Absolutely.”
Once he’d asked the commissioners to cut the subsidy, Papenfuse was impatient for a decision. A month after his request, he accused them of stalling. “This is not a complicated legal question that requires weeks of review,” he said. A week later, museum officials made their case to the commissioners for continued receipt of the money. At the meeting, Commissioner Haste said they had his support, but then deferred to an ongoing legal analysis. In the end, the county effectively punted the decision back to the city and the bureau, saying it was up to those parties under the law to negotiate a spending plan.
Both the city and the bureau had viewed the “Summer in the City” campaign as a positive step. But in the ensuing months, the relationship soured. In October, Smith wrote to Papenfuse about two opportunities to market the city with hotel taxes accumulating under the freeze. One was a “Holidays in the City” promotion, modeled after the summer campaign, and the other centered on the Great American Outdoors Show, a February event at the Farm Show Complex, with promotions to attract showgoers to shop, eat and stay downtown. Papenfuse sent back a terse reply. First, he said, the bureau was obligated to promote the region during the holidays anyway and could market Harrisburg without spending dollars specifically set aside for the city. And second, he had a problem with the outdoor show sponsor, the National Rifle Association, which he claimed had still not paid the city what it owed for the show the previous year.
Looking back on this period, Smith and Dunlap said it left them at a loss. They repeatedly told me they had no obligation to freeze spending on the city, but that they had done it as a good-will gesture during negotiations. They said the same was true of their discussions with the museum, which they continued through that fall and winter, trying to reach a compromise. “We felt we had negotiated something we weren’t even required to negotiate, and were sitting on funds we weren’t obliged to sit on,” Smith said. In January, she wrote the mayor again, this time to discuss a proposed settlement—a gradual step-down of the museum’s subsidy, freeing up $100,000 to be spent on the city each year.
Through an email from his assistant, Papenfuse rebuffed the offer. “Any meeting with HHRVB and city officials, for any reason, short of a complete, newly negotiated, binding agreement seems pointless,” the email said. It added that the mayor was “concerned that litigation will be inevitable” if the matter wasn’t resolved soon. On Feb. 4, the bureau presented the proposal publicly to the county anyway. The commissioners embraced it, promising to cover the museum’s shortfall with other county funds, but Papenfuse was unmoved. “What they wanted in exchange for that was a validation of their agreement with the Civil War Museum for the rest of the money,” he said. “Which I would not do and I still will not do.”
After the mayor’s response, Dunlap and Smith said they were nearly ready to give up negotiating. “There is no compromise,” Dunlap thought. “There is no deal, no offer, that is going to work.” They felt they had worked in good faith towards a resolution, and Papenfuse had dismissed it completely. Around that time, Dunlap said, he concluded, “This isn’t going to get better with time.”
…
Papenfuse is not shy about driving a hard bargain. He seems to relish it. “I think every day is a battle in some ways for the city,” he told me. “And this requires a particular personality.” Since he took office, many people have remarked upon the areas where he has appeared to court controversy—over the museum, or the state’s recovery plan, or debts tied to the downtown Verizon building, or parking. But Papenfuse rejects the notion that he seeks out these battles. He thinks they simply reflect the realities of his job. “You’ve got to stand up almost every day to someone who’s trying to take advantage of the city, or someone who’s not doing enough to help the city’s recovery,” he said. “If the city had anybody who was any less of a fighter, I think we’d already be done.”
In a general way, Papenfuse has always framed the hotel tax dispute as a fight for the city’s financial health. “It was all about the money,” Dave Black told me. But, if you set aside the suggestion of selling off Civil War artifacts to fill a few potholes, it wasn’t until last February—more than a year into his negotiations with the bureau—that Papenfuse proposed a use of marketing dollars to address an immediate fiscal need. After rejecting the bureau’s step-down proposal, he met with Black and Smith to suggest a use for the taxes, which were sitting in an account, unspent. Steep parking rates, hiked as part of the city’s 2013 debt fix, were hurting downtown businesses. Papenfuse believed that reducing rates during happy hour might produce a net increase in revenue, resulting in a win for both businesses and the parking system. The parking operators, facing razor-thin margins, didn’t want to take the gamble, so Papenfuse asked the bureau: what about putting up the hotel taxes as collateral, to make up any shortfall in the event the gamble failed?
In emails with the bureau, Papenfuse said this “experimental subsidy” was the city’s only urgent marketing need. He thought the use clearly fit the description of “promotional”—negative publicity around parking was causing a major image problem. But the bureau disagreed. As Black put it, “It wasn’t a tourism promotion of the city. I saw it as a slippery slope. ‘If you do this, can’t we get some more to do more?’” They rejected the proposal. “We feel his pain,” Smith told me. “But it’s a very defined line what we do.” In the end, Papenfuse put up money from a different city account, and the experiment went forward without the bureau’s help. (In October, the parking operators announced the experiment had been a success: meter revenues were up, and the city didn’t lose any of its collateral. “It was a huge PR win for the city,” Papenfuse told me. “That’s why I viewed it as marketing dollars, because it changed the narrative.”)
The parking proposal marked a turning point for the bureau. In late March, Smith wrote to Papenfuse, congratulating him for getting his parking plan approved by City Council (“I am a nice person, darn it!” she told me) and asking to start fresh on a city campaign. The mayor’s reply was unrelenting. He refused to meet until the museum subsidy was addressed. He described it as “illegal, deeply misguided, and contrary to the city’s expressed interests.” Perhaps in reference to the parking proposal, he also noted that the city’s “marketing and promotional priorities as enumerated by the governing body and mayor continue to be ignored—and indeed disparaged—by your organization.” The ongoing support of the museum, he added, was “so shockingly antithetical to Harrisburg’s interests that they raise grave doubts about the legitimacy of your organization’s leadership.”
After the email, Smith told me, the bureau decided it was pointless to keep trying to negotiate. She understood the mayor’s position, but felt that, in the end, she had to find a way to move on. “He’s got his own job to do, to run an entire city,” she said. “We should be looked at as, this is our job. We’re trying to market the city.”
…
In October, the bureau put up a set of “teaser” ads on billboards in the Harrisburg area. Simply designed, with white lettering against autumnal-colored backgrounds, they were meant to pique interest by deploying catchy phrases without reference to time or place. “Couch potatoes and buzzkills? Don’t bother,” read one. “Same old, same old? Not here,” read another. Papenfuse lampooned them. Appearing before the county commissioners, he said the ad campaign was a “big waste of money.” He found the font “questionable,” thought the double-negatives were confusing, and felt they implied the city was only for the young, which was “pretty much insulting.”
The mayor wasn’t addressing the totality of the campaign, as he knew. But to him, the billboards represented a betrayal. In his view, the bureau had made a promise not to market the city until both parties had agreed to a plan. With the reveal of the “teaser” ads, the bureau had announced its commitment to a $180,000 campaign, conceived without the input or knowledge of city officials. Worse, from the mayor’s standpoint, was that they had been crafting the campaign in secret for more than six months. Papenfuse had heard hints that they were working on something, but “thought for sure they were going to come back with a proposal,” he told me. “And instead, much to my surprise, they decided, ‘Let’s just do it. Let’s launch it.’ And I honestly, genuinely thought we had an agreement about not spending the money until we had an agreement.”
The bureau denies that its campaign was “secret.” They say they sought city involvement, in the form of a “steering” committee made up of local professionals. And they say that, faced with the mayor’s stonewalling, they had to find a way to fulfill their purpose under the law. “The bureau is statutorily obligated to market the city,” Black told me. “After a while, it had to spend the money.” In Smith’s view, Papenfuse invalidated any agreement to freeze spending by refusing to meet. She maintained this position even after I suggested that only the bureau’s action, and not the mayor’s inaction, could break the stalemate. “He made the decision by not letting the dollars be used,” she said. “He made the decision by not responding.”
The steering committee had eight members, exclusively representing Midtown, downtown and City Island. Kevin Kulp, the president of the Senators baseball team, was on it, as was Todd Vander Woude, director of the Harrisburg Downtown Improvement District. Ashlee Dugan, who was briefly a member while director of the Broad Street Market, said the work involved “really fun, creative conversations” about how to attract people to the city, though she said it felt more like a focus group than a steering committee. (Lauren Maurer, sales director at TheBurg, was on the committee, as a representative of Harrisburg Young Professionals.) The group met for the first time in May, and continued to brainstorm over what Smith described as “six months of awesomeness.”
In late September, Joe Massaro, the general manager of the Hilton and another steering committee member, asked Papenfuse to meet and discuss the marketing campaign. Massaro had discussed hotel taxes with the mayor in the spring and had sought to help broker some kind of agreement between the city and the bureau. “We wanted some positive news about the great things we know to be true about the city, but were not getting covered in the media,” he told me. Massaro saw the email as a follow-up to that meeting, which he described as cordial, though he and the mayor apparently walked away with different impressions. “I am confused by your email,” Papenfuse wrote back. He said that he had “no working relationship” with the bureau and had no interest in a campaign. What Massaro should have been doing, he went on, was resolving the dispute over the Civil War Museum, to which the bureau was still “illegally diverting hotel tax dollars.”
Papenfuse may have been pressing Massaro to re-open negotiations. Or he may have been simply venting. He told me he disagreed with the Hilton’s “very singular perspective” that the hotel taxes should only be used in ways that would drive business to hotels. Massaro had opposed their use to backstop the parking discount, for example. In any case, the email only further alienated Massaro. He politely disengaged from the conversation, then went along with the bureau’s campaign. “I don’t have any regrets about what we did as a group, because I know that what we did was with the best intentions,” Massaro told me. “It was a group of businesses that wanted to do something good for the city, and by law, that’s what the money was to be spent on.”
…
After railing against the “teaser” campaign, Papenfuse met with Smith and Black to make a counteroffer. What the city really needed, he said, was to build capacity. He wanted the bureau to commit a portion of the hotel taxes as a grant, which would then fund two city staff—a marketing director and a web content manager. He also wanted a commitment of $80,000 a year in direct advertising of city events.
The key difference, this time, was that the museum subsidy was off the table. “His opening conversation at that meeting was, ‘This Civil War Museum thing, we’re putting that aside,’” Dunlap told me. As for why the mayor had changed his mind, Dunlap said, “We went on without him. I think he realized he didn’t have the leverage he thought he had.” With that, the mayor had abandoned the singular goal that had launched his conflict with the bureau, nearly two years before, and had remained at its center right until the end. “I conceded,” Papenfuse said, when I asked him about it. “There was a major concession on the part of me in order to get an agreement done.” But he wanted me to know that his fight against the museum subsidy wasn’t over—he still thought the funding was illegitimate. He had only conceded on using the bureau as “a vehicle to debate the museum,” he said.
I asked Papenfuse if he regretted his comment about “white privileged outsiders.” Papenfuse had made it in the course of criticizing the marketing campaign before the county commissioners. He pointed to the website of a marketing firm involved with the campaign, which showed the faces of 16 employees, all white. Without input from the city, he said, the rebranding effort amounted to “white privileged outsiders telling the poor, impoverished, diverse city, ‘This is what your identity is going to be.’” Black had told me the remark “served absolutely no purpose.” But Papenfuse stood by it. “Every single issue in Harrisburg has race right down the middle of it,” he said. “But I don’t think they see it at all. So that was a reminder that they needed to see it.” The bureau and CREDC, he added, needed “much more diversity, and the city can bring that diversity to the partnership.” (Black denied his organization had a diversity problem, telling me that “diversity and inclusion is part of our DNA.”)
On Nov. 5, a few weeks after the “teaser” ads, the bureau held an official launch of the full campaign. It was held in a second-floor room at the Hilton, directly across the street from city hall. The audience was mostly composed of bureau employees, steering committee members and a few reporters. The mayor wasn’t there. After some introductions, Smith played a pair of videos from the campaign. One presented a series of man-on-the-street interviews, mostly with people at downtown and Midtown restaurants and cafes. The other was a capsule history of the campaign itself, opening with an electric-guitar riff and narrated by Harrisburg itself, as portrayed by a youngish, male voice. “I might have been a little misunderstood, so a new campaign was created to reintroduce me to the area,” the city said. The campaign’s slogan was “Find Your Way Here.”
The next day, Papenfuse and the bureau met again to discuss his proposal. Though the details were still being finalized at press time, both the mayor and Smith confirmed that they had settled, at last, on a use of hotel taxes the city could approve. It more or less matched the terms of the request the mayor had made for city staff and annual ad buys. “I think it was a pretty successful negotiation, even if it did take a lot of time,” Papenfuse told me. Smith, the day before her board was set to vote on it, said the bureau was glad to help “fill in that capacity need” at city hall. But she had reservations about entering another long-term agreement to spend the money on something besides a marketing campaign. The museum subsidy, she said, was “no different than what the mayor is asking us to do now—what this mayor feels is a priority, versus what the Reed administration felt was the priority.”
Meanwhile, Papenfuse would let the bureau move forward with its campaign. That didn’t mean he had to like it, however. The night of the launch, he sent me a message. He was in the midst of negotiating with the bureau, but it was as if he couldn’t help himself. Driving through the city near Herr Street, he’d seen one of the bureau’s billboards and its “Find Your Way Here” slogan.
“I have already found my way,” he wrote. “Odd placement.”
