Saturday, April 7, 2012

PNC Loan Default By The HCA

In the last post on the Hazleton City Authority and the Northeastern Building Saga that started in the late 1990's SOP covered the problem with MHT Holdings, Inc and Mark H. Trammel.  An internet check on Mark H. Trammel produced many stories about his development in the Hamburg section of Buffalo called Hickey Farms for senior and low income housing at the same time he was talking to officials at the HCA.  SOP has been trying to track down a relationship between Trammell and an attorney from Hazleton that has been floating around.

The HCA Board secured a  PNC bank loan in the amount of $500,000.00 for the Northeastern Bank Building project on March 26, 1995.  PNC Bank notified the HCA that is was in default on that note on March 27,1997.  A hold was placed on 4 DDA bank accounts of the HCA on April 11, 1997.

On April 16, 1997 PNC bank officials prepared a document that showed the HCA was behind 150 days( 5 months) on payments.  It was prepared John D. Nichols, Unit Manager.  That very same day officials of the HCA including Richard Ammon, Norbert O'Donnell, and John Mundie met with a PNC bank attorney. An agreement was made that funds above $250,000.00 were released so the HCA could pay its bills.  In addition Authority Board member John Mundie agreed to turn over to PNC representatives several items including rent rolls for the building, a listing agreement to sell the property, copies of the loan documents surrounding the loan from the City of Hazleton, and any financial information available.

On May 13, 1997 Attorney Barbara Sedella for PNC Bank wrote a letter that stated in part that as of that date she still was waiting for the information from Mr. Mundie.  “We are at standstill until such information can be viewed.”  Attorney Ferdinand for the HCA responds that the HCA is still waiting for the release of the hold on the remaining account of $250,000.00 despite the fact that HCA Board members previously agreed to the hold.  Attorney Sedella reiterates her request in a letter dated May 19,1997.
Attorney Ferdinand responds to Attorney Sedella May 20, 1997.  In part his letter states, “Recently another matter has surfaced in that Jack Mundie, board member who handles the finances of the Northeastern Building for the board, has advised that he can no longer pay the bills at the building.  He wishes to advise tenants to move in the very near future.
During this time the HCA Board members were also requesting the release of $250,000 Business Development Loan originally made by the City of Hazleton to MHT Holdings.  The HCA’s position was that the funds were needed to continue with the project despite MHT Holdings relinquishing any part in it.
On August 5, 1997 Ron Slusser,  Economic Development Officer, wrote a letter to Richard Ammon, President of the HCA in reference to the Enterprise Zone Loan of $250,000.00.  Slusser tells Ammon that the loan was specifically “to make safety improvements to the physical structure at 8 West Broad Street.  Further he says, “Since receiving the funds over one (June 1996) year ago, the Authority has failed to make the necessary improvements.
Due to the Hazleton City Authority’s failure to meet the conditions required in the Business Development Loan Agreement and Loan Application filed with the City of Hazleton, the City of Hazleton requests immediate payment of the $250,000.00.

It appears the HCA Board severely hurt the financial reputation of its entity with these problems.

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