Hearing focuses on Affordable Housing

September 19, 2006

By Pat Litowitz
New Castle News

A preliminary hearing on a disputed auction transformed into a heated examination of a failed housing agency.

The Lawrence County Housing Authority is seeking an injunction against Affordable Housing of Lawrence County. The authority wants the court to void the auction of seven Affordable Housing properties and the pending sale of an eighth.

Judge J. Craig Cox granted the housing authority’s request for a temporary restraining order last week. Cox is presiding over the hearing, which resumed today at 9 a.m.

Former property owner John A. Orlando and housing authority executive director Robert Evanick provided the majority of the day’s testimony.

Orlando and Nick DeRosa sold two duplexes and a fourplex to Affordable Housing in December 2005 for $165,000. DeRosa, who was not present, recently retired as the New Castle Area School District’s assistant superintendent.

Seeking to illustrate the properties’ income potential, authority solicitor Louis Perrotta asked Orlando to provide rent information.

From 1998 through November 2005, the Orlando-DeRosa partnership collected approximately $200,000. However, from 2003 until the sale, the rental income dropped from $30,395 to $13,775.

“Owning real estate property is very time-consuming,” Orlando said.

Prior to the Affordable Housing sale, Orlando said, an unsuccessful effort was made to market the properties for $172,000 in 2003.

Under examination from Affordable Housing’s attorney Timothy McNickle, Orlando said he learned in May or June about a pending sale with the nonprofit group.

“I’m not aware of any negotiations,” he said. “(DeRosa) and I agreed whatever the appraiser appraised it at was what we sell.”

Castle Realty appraised the properties on behalf of First Commonwealth Bank.

Orlando continued that the pending sale had an effect on finding tenants for the properties.

“We really weren’t very active in seeking tenants,” said Orlando, a retired Pennsylvania American Water Co. manager.

Orlando’s relationship with Affordable Housing consultant Robert Ratkovich was also addressed.

Attorney Michael Flaherty, representing First Commonwealth, asked if Ratkovich talked about the sale with him.

Orlando said the pair had a business dealing 12 years ago and belonged to the same club, whose identity was not disclosed.

“He was an acquaintance,” he said. “I never discussed the deal with him.”

Evanick, who started Affordable Housing and once served as its president, also faced scrutiny.

Although he had signed loan papers that concluded the sale, Evanick said it was Ratkovich who selected the properties for Affordable Housing.

“The finances were negotiated by Mr. Ratkovich,” he said. “We left it up to him.

“From what I understand, the appraisals justified buying the properties.”

Evanick then testified that he had resigned from Affordable Housing a day after signing the loan papers because he disagreed with the direction the agency was taking.

In disputing the auction of the seven properties, Evanick said a real estate agent would bring in more money than an absolute auction.

While not opposing an auction in principle, he was against an auction where there was no minimum purchase price.

After being repeatedly asked how much the properties should have attracted, Evanick said $75,000 on top of the $56,200 that the auction had collected.