Luzerne County taxpayers will probably become owners of a landmark downtown Hazleton building until its fiscal problems are resolved, county commissioners said Monday.
The county is getting involved because it is owed $1.8 million in community development loans on the property. The former department store building is mostly full but has accumulated more than $93,000 in back taxes.
Commissioners pulled the building, known as the Broad Street Business Exchange, from a tax sale.
Commissioner Todd Vonderheid said the county could have risked losing claim to the $1.8 million, which was granted in the mid-1990s, if the property was sold to the highest bidder. The county would also lose control over the selection of a new owner in a tax claim sale, he said.
The building is owned by the nonprofit Alliance to Revitalize Center City Hazleton – ARCH – and the for-profit Hazleton Community Development Corp., a sister organization. The two groups spearheaded the Business Exchange in 1995 to prevent deterioration and possible loss of the former McCrory’s and Deisroth stores.
Current occupants include state Rep. Todd Eachus, Luzerne County Community College and a state employee retirement office.
Commissioner Greg Skrepenak said Monday that he’s had difficulty getting answers on why the business hasn’t paid its tax bills and loan. “I’d like to see the books and see what’s going on.”
Scranton-based Management Enterprises Inc. operates the building. Skrepenak said he’d prefer to keep the building in the hands of an entity that would pay property taxes. He had considered the building as a site for the Hazleton annex, but said too many existing businesses would have to be displaced.
Minority Commissioner Stephen A. Urban wants to know what, if any, steps were taken by the alliance to try to fix the fiscal problems before they got out of hand. If the county assumes ownership, he believes the property should be put up for sale immediately with a minimum asking price.
“I don’t want to be in the real estate business,” he said.
Neither does Vonderheid, but he said he doesn’t fault the current owners because the primary mission – preserving and filling the place with businesses – has been achieved. Occupancy has ranged between 85 and 95 percent, he said.
“The goal is not to hinder that at all. The project has been an overwhelming success,” he said.
U.S. Economic Development Administration officials also asked the county to pull the property from the tax sale because the administration had allocated a $978,000 grant toward the project, and grant regulations require that it remain in a nonprofit’s hands, said county Community Development Director Andy Reilly.
U.S. Economic Development Administration grant-funded projects rarely end up in tax sales, he said. It’s not clear what measures the federal government would take to recoup its investment if the project ended up with a private owner.