Sunday, January 20, 2008

Housing authority drops court action

September 20, 2006

By Pat Litowitz
New Castle News

The Lawrence County Housing Authority yesterday withdrew its request for the courts to overturn the sale of properties.

Attorney Louis Perrotta advised Common Pleas Judge J. Craig Cox of the authority’s decision to end litigation against Affordable Housing of Lawrence County, its nonprofit spin-off agency.

The announcement came as the hearing reconvened following the lunch recess.

Perrotta cited Robert Evanick’s testimony and the limited potential for financial recovery as reasons behind the decision.

“I looked at the testimony,” Perrotta said last night. “My main (witness) didn’t testify as well as I thought.”

Evanick is the authority’s executive director, who had helped to create Affordable Housing and once served as its president.

On Sept. 9, Affordable Housing conducted a public auction, selling seven of its properties for $56,200.

A sales agreement involving the eighth property, a Dewey Avenue duplex, was entered into prior to the auction.

During testimony yesterday, Affordable Housing board member Deno DeLorenzo told Perrotta the purchase price for the remaining rental property was $15,000.

Almerinda Feola, a tenant at the Dewey Avenue site, made the offer, with DeLorenzo drawing up the sales agreement. She is seeking financing, DeLorenzo said.

The $71,200 that the eight sites garnered is far short of the $290,000 Affordable Housing owes to First Commonwealth Bank. The bank agreed to the auction and has released the mortgages to the new owners.

The agency also has a $200,500 promissory note due to the housing authority.

“Zero from zero is zero,” Perrotta said in reference to what the authority would see from the proceeds.

Although Affordable Housing offered to pay the authority $500 per structure, no funds have been transferred.

A settlement sheet presented during the hearing showed the disbursement of proceeds from the auction. The housing authority was not among those listed.

“They had no intention of paying us,” Perrotta said. “We wouldn’t have uncovered it without the hearing.”

Attorney Timothy McNickle, representing Affordable Housing, said he had planned to request a dismissal of the authority’s complaint if Perrotta hadn’t.

“We thought from the very beginning of the process the injunction would be dismissed (by the court),” he said.

The day’s proceedings began with Perrotta calling DeLorenzo to testify.

Under examination, DeLorenzo stated he had provided documentation at Affordable Housing’s request that was used to secure a $250,000 loan from First Commonwealth.

DeLorenzo, an accountant, said Affordable Housing consultant Robert Ratkovich sought his assistance. He provided DeLorenzo with financial data and information on the structures.

DeLorenzo said he was not given the location of the properties or the owners’ identities.

“It was not necessary for me to ask who the seller was,” he said.

Ratkovich is New Castle City Council president and the authority’s maintenance superintendent. At the time of the purchase, Ratkovich was not an authority employee.

Although he projected an initial shortfall, DeLorenzo said, Affordable Housing required an 80 percent occupancy of its properties to meet income objectives.

Those objectives were never met, DeLorenzo said.

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