Affordable Housing can no longer pay its bills

March 23, 2006


By Pat Litowitz
New Castle News

With debts nearing a half-million dollars, Affordable Housing of Lawrence County says it can no longer pay its bills.

In a letter dated Wednesday, the nonprofit agency’s treasurer, Deno DeLorenzo, advised First Commonwealth Bank that Affordable Housing had become insolvent and planned to default on its two mortgages.

The move also cripples the Lawrence County Housing Authority’s efforts to recover $200,500 it had lent the agency, which it created in August 2003.

“This is the first I’m hearing of it,” said Robert Evanick, the housing authority’s executive director and Affordable Housing’s former chairman.

“I’ve never been in this situation.”

Evanick was responsible for creating the group, which targeted the housing needs of the elderly and handicapped. He oversaw the purchase of eight county properties in 2005 for $340,000. Affordable Housing obtained two mortgages through First Commonwealth totaling $290,000.

Evanick resigned in December as head of Affordable Housing, shortly after signing loan papers involving seven New Castle properties.

His departure signaled an exodus of four board members within in a two-month period. Leaving were Attorney Frank Natale II, Karen DeCarlo, the Rev. James O. Blackwell and Donald “Ducky” Conti.

DeLorenzo, who joined the board in January, and William Bonner are Affordable Housing’s remaining members.

“I’m at a loss for words,” said Robert Heath, housing authority chairman. “I’m looking into other avenues to get our money back.”

DeLorenzo said that three of Affordable Housing’s 18 apartment units have occupants. Those units are generating $275 per month. A property on Cunningham Avenue is also being leased.

“There are no resources to properly solicit tenants and maintain adequate housing conditions of the real estate assets,” DeLorenzo wrote to First Commonwealth. “Given the fact the debt service is in excess of $2,000 per month, the insolvency of the organization is apparent.”

On March 15, Affordable Housing officials sent a letter to the U.S. Department of Housing and Urban Development and offered it the opportunity to assume the ownership and mortgages on the properties. To date, HUD has not responded to that request.

DeLorenzo said that Affordable Housing’s remaining funds have been used to clean up and secure the properties.

“I have personally assessed the rental houses and (their) current conditions and am deeply saddened to report there is little expectation of substantial financial liquidation proceeds,” he said.

Affordable Housing has approximately $75 left in its bank account. DeLorenzo expects First Commonwealth to foreclose on the properties after April 15. He said once the properties are in the bank’s possession, Affordable Housing will end operations.

“I have become emotionally exhausted on this matter and troubled by the fact that monies of this magnitude could have supported, in my estimation, (the housing needs) of well over 100 families,” DeLorenzo said.

Attempts to reach representatives of U.S. Rep. Melissa Hart, U.S. Sen. Rick Santorum and U.S. Sen. Arlen Specter for comment were unsuccessful.