WILKES-BARRE — As Wilkes-Barre proceeds with plans to demolish the Hotel Sterling in downtown Wilkes-Barre, the property’s nonprofit owner — CityVest — has quietly published a legal notice of its plans to dissolve.
Luzerne County officials say CityVest, which has an outstanding $6 million county community development loan on the property, never informed them of its plan to shut down.
County Manager Robert Lawton said the outstanding loan is officially recorded as a lien that will remain attached to the property if CityVest walks away, but he will research the matter to determine if further legal steps are required to protect the county.
“We will certainly exercise our rights to the fullest to recover in any manner possible any corporate assets available to satisfy that lien,” Lawton said.
Wilkes-Barre also will be owed money for demolition. The city is handling the tear-down because city officials condemned the property and CityVest representatives said they were out of funds.
City officials have said they plan to take over ownership of the property after demolition. If that happens, the city likely will be first in line to recoup its lien if the property is sold to a developer. The county would receive any remaining funding.
County officials also confirmed a federal grand jury was investigating CityVest, but the status of that inquiry is unclear.
CityVest representative Alex Rogers could not be reached for comment Friday.
Scranton Attorney George Reihner, who is handling the dissolution, won’t be accessible to comment for several days, according to a representative of his firm, Wright & Reihner P.C.
The legal notice stated CityVest will be filing articles of dissolution with the Pennsylvania Department of State because the nonprofit “is now engaged in winding up and settling its affairs” so its “existence can be terminated.”
The notice stated any “action or proceeding” involving CityVest liability may be sent to Wright & Reihner.
It also stated that CityVest will mail notice of its plans to dissolve to any people or entities it “reasonably believes” might have a claim on CityVest assets.
Department of State spokesman Ron Ruman said any opposition or claims on CityVest assets must be aired in court because his agency merely accepts paperwork to create and dissolve nonprofits. “We have virtually no oversight or enforcement,” said Ruman. “We’re basically a repository to keep and accept paperwork.”
County Community Development Director Andrew Reilly said CityVest’s plans are not a shock because representatives of the nonprofit discussed the possibility of closing down a year ago during demolition negotiations.
He will work with county attorneys to determine if any additional action is warranted, Reilly said. “If there’s no entity known as CityVest, I don’t know what happens to the property,” he said.
County Councilman Stephen A. Urban, a former county commissioner, said dissolution means there would be nobody to “go after” if claims arise regarding the actions of CityVest.
County Chief Engineer Joe Gibbons said CityVest’s dissolution might lead to a bankruptcy proceeding because both the city and county will line up as creditors.
CityVest spent the $6 million in county community development funding on consultants, enlarging the parcel and tearing down another structure on the 4-acre lot at the corner of River and Market streets. The shuttered hotel has been vacant since 1998.