NEW CASTLE City tries to recoup money lent to hotel

By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- City officials have hired an attorney to help recoup some of the money the city lent to a local hotel.
Council members agreed to pay Frank Veterano of New Castle $150 an hour to represent the city's interests in bankruptcy proceedings in federal court involving New Castle Hotel Banquet Properties Inc., and Patricia Moosally.
Moosally and New Castle Hotel Banquet Properties own the city's only hotel, Best Inns at the corner of North and East Washington streets.
City officials lent Moosally and the company about $500,000 in two separate loans, said John DiMuccio, city business administrator.
They owe $160,000 from an economic development loan and $365,000, with the balance due in 2011, from an Urban Development Action Grant the city secured, he said.
Council member Patricia May said council hired Veterano because it needed an attorney who specializes in bankruptcy proceedings to help recoup the money.
Sewer project: In other business, council approved easement agreements with eight property owners for the city's upcoming sewer line project.
City officials are constructing a main sewage line that will stretch from the north hill section of the city to the Shenango River. A second phase of the project will take that sewage line to the city plant on state Route 18.
The work is part of an agreement the city ironed out with state environmental officials after being cited several years ago for sewage overflows in the city.
Council members agreed to pay a total of about $3,200 to five property owners. Two more agreements are still being worked out, said Ted Saad, assistant to Mayor Timothy Fulkerson. All of the money paid to property owners will come out of a bond issue passed by council in 1998 for this project.
Saad said work on the sewage line should start sometime in September.