Meadville Tribune

September 14, 2013

Conneaut Lake Park insurance issues raised

By Keith Gushard
Meadville Tribune

SUMMIT TOWNSHIP — The cost to properly insure the Beach Club at Conneaut Lake Park would have run $10,000 to $30,000 annually, according to some local insurance agents, but that was a cost the Trustees of Conneaut Lake Park said it couldn’t afford.

Fire destroyed the Beach Club night club and Dockside banquet pavilion on Aug. 1 — a fire that’s been ruled undetermined by a Pennsylvania State Police fire marshal.

The Beach Club-Dockside fire was the second major facility in the park to burn down that was not insured by the Trustees, which operates the park as a public trust for the benefit of western Pennsylvanians. On Feb. 1, 2008, the park’s historic Dreamland Ballroom was destroyed by fire that was ruled an arson. A vacant lot sits in its place today.

Many area residents were shocked to learn after the Aug. 1 fire that the Trustees hadn’t learned a lesson from the Dreamland Ballroom fire. But In a Tribune story published in August, Jack Moyers, chairman of the Trustees, said the Trustees didn’t have insurance on the Beach Club-Dockside due to the insurance’s “affordability.” Park Restoration LLC, which leased the Beach Club, carried a $600,000 insurance policy as part of its lease.

The fire and lack of insurance were yet another setback for the financially troubled park. While this year’s property taxes have been paid on the park, the Trustees owe nearly $900,000 in overdue property taxes on the park, including the parcel where the Beach Club was located.

The Trustees have purposefully kept information from the public that would provide some sense of whether the park has the finances to ever get out from under the overdue taxes and insure the park’s remaining structures. As a public trust, Moyers and the park are not required to release financial statements or hold public meetings, and they have not voluntarily done so, despite ongoing, growing calls to do so.

Crawford County’s three-man Board of Commissioners during a public forum last week again highlighted the Trustees’ unwillingness to share information about the park and the commissioners said the Trustees’ failure to have fire insurance was irresponsible.

While the commissioners have not themselves called on the Pennsylvania Office of the Attorney General, which oversees public trusts, to launch an investigation, they said they are aware of several county residents doing so. The Tribune also formally requested an investigation in a recent editorial. Email messages sent by the Tribune to the Office of the Attorney General seeking comment weren’t returned.

Exactly how much it would have cost to insure the Beach Club-Dockside depends on many factors, according to Dan Petruso of the BJ Petruso Insurance Agency of Meadville.

Petruso checked off a number of factors influencing cost, including the age of the building, its size and the type of fire protection available.

“It’s also the type of cooking they do in there — they had deep fryers,” Petruso said. “They had a couple of bars, so there is liquor liability to consider. It (coverage) also is based on sales and it’s a seasonal business.”

William Rosenberger, a retired insurance agent formerly with First National Insurance of Meadville, agreed there are many factors that would cause a policy to add up quickly.

“Fire insurance would be $6,000 to $7,000 for a half million policy, but then you’d have liquor liability be another $6,000. General liability might be about $1,500. The type of construction influences the cost as does the type of fire suppression equipment and whether it’s a volunteer fire department or a paid fire department responding.”

Rosenberger said to properly insure Conneaut Lake Park and all its property would be in the range of $100,000 to $125,000 per year.

While Park Restoration, which leased the Beach Club from the Trustees, held a fire insurance policy on the Beach Club-Dockside complex, there is concern about where those insurance proceeds may ultimately go.

The question is whether any insurance proceeds should be applied to the nearly $900,000 in back taxes owed by the Trustees. The issue was brought to Park Restoration’s attention by its insurance company, which pointed to state laws regarding properties with overdue taxes.

Park Restoration officials have said they want to rebuild the Beach Club as long as the Trustees agree to several specific provisions, including rebuilding in concrete in order to lessen the impact of any future fires; that Park Restoration receive a 30-year lease in order to recoup its investment; and that the property get its own property tax identification number so that Park Restoration could pay off and keep current the property tax.

Park Restoration is concerned that the Beach Club and the Hotel Conneaut, which it also leases from the Trustees, may be seized and sold by Crawford County to satisfy the overdue taxes. The county Board of Commissioners has directed the county’s tax office to prepare for such a sale but it will be well into next year before a date is set.

At a public forum with the Tribune on Monday, all Crawford County commissioners said they were shocked the Trustees didn’t have insurance.

“It’s daggone poor management,” Commissioner C. Sherman Allen said. “Something ought to be done” and there is “no transparency” with the Trustees.

Commissioner Jack Lynch said he couldn’t understand the park’s situation, noting any business “has to have basic coverage.” If insurance wasn’t affordable then the facility shouldn’t be open, Lynch said, adding those with responsibility for the park must preserve its assets.

“It’s certainly sad,” said Chairman Francis Weiderspahn Jr., calling it “irresponsible” for a business not to “insure assets.”

Keith Gushard can be reached at 724-6370 or by email at