LAWRENCE COUNTY PARK 5 proposals preceded grant cut

Project officials are going to Harrisburg next month to talk about new funding.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- The local funding for Millennium Park went through several changes before state officials finally said there were not enough matching funds to meet state guidelines for the $15 million state grant, says a report generated by Gov. Ed Rendell's budget office.
The report outlines five proposals given to the state by local officials from February 2003, when Rendell announced the grant, to the rejection of all but $4 million of the required one-to-one match last week.
State officials have said they could not find a legitimate local match, a requirement of the state's Redevelopment Capital Assistance Program.
Lawrence County Economic Development Corporation, the private agency heading the project to develop the high-technology business park in Neshannock Township, was in charge of applying for the funding.
In its final proposal, the LCEDC was using property and equipment value of current businesses in what the corporation defined as phase one of Millennium Park to secure the state money.
State officials, however, say that phase one was in name only, and the current buildings were privately owned and constructed and not physically part of Millennium Park. The state defines the boundaries of the technology park as 500 acres of undeveloped land.
What happened
The report generated by the governor's budget office and released by state Rep. Frank LaGrotta of Ellwood City, D-10th, states that from February 2003 to April 2003 the LCEDC estimated its project costs at $35 million.
A spreadsheet of costs sent to the state identified uses for the $15 million in RCAP funding that were ineligible, including off-site sewer upgrades and work on current public roads such as Pa. Route 60. The LCEDC was at least $8 million short of the required funds at that time, the state report says.
In April 2003, the state met with LCEDC to discuss its approach to finding qualifying matching dollars for RCAP and talked about using land values from phase one.
The report says the budget office agreed to consider the proposal if phase one was "in fact physically and legally actually part of Millennium Park as being developed and owned by LCEDC."
That meeting resulted in a proposed match of $5 million prior land value, $7 million in not-guaranteed federal funds for on-site roads in Millennium Park, $2.6 million for utility company expenditures within the park for utility upgrades, $1.3 million not-guaranteed federal funds for site work, $800,000 in county money for sewer costs and $1.12 million of other local funds for soft costs such as studies and engineering work.
That approach was approved in May 2003, and state officials waited for the official application, the report said.
The third proposal submitted in May 2004 for the funding included none of the match agreed on in 2003 but listed $15 million in "unspecified private company investment."
LCEDC told the budget office it was installing infrastructure from a Pennsylvania American Water Co. plant within Millennium Park, which the budget office interpreted to mean waterlines installed by PAWC, the report said. The state later learned it was a current water plant that did not fit into state guidelines as a match.
Another idea
A fourth proposal made in July 2004 showed a possible match of $5 million to $7 million made by Lawrence County commissioners through the use of county Community Development Block Grant Funds, federal money used in the past for housing rehabilitation.
Commissioner Steve Craig said the idea was proposed, but never formally presented. He said LCEDC officials have requested a new meeting to talk about that proposal now.
He said it would require the county to give up several years of its CDBG funding to the project.
The county gets about $400,000 per year and has most recently used it on community improvement projects, including storm sewer work in South New Castle Borough and for new sidewalks in Wampum Borough.
Craig said he's unsure if the county will hand over the money because the previous board of county commissioners already took out a $3.5 million loan through the sale of bonds to pay for land acquisition for the park. He said there is no formal agreement as to how that money will be repaid.
"We need some level of assurance that this project is going to work and we'll be made whole again," Craig said.
That fourth proposal also names a possible tenant that discussed a $1 billion investment. State officials asked for verifiable proof of bank financing that was never produced, the report continues.
The last proposal gave the land and equipment values from phase one, which the budget office determined was "in name only" and part of Millennium Park.
"This looks like a summary. It doesn't get down to the true technical discussions we had with the budget office consultants," Linda Nitch, executive director of LCEDC, said of the report.
She would not give details of her communication with the state budget office but said she believed she was following directions given by the state.
She said LCEDC is now focusing on getting funding for the technology park through other government programs.
State officials have suggested the LCEDC apply for a Business In Our Sites grant that would provide up to $5 million, she said.
The rest would come from "patient loans," which means the corporation isn't responsible for any principal repayment and interest will not be accrued until lots within the park begin to sell.
Neshannock Township Supervisor Gale Measel, whose community has put nearly $1 million into the sewer line project leading up to the park, calls the state's funding decision on the $15 million subjective but said he is looking positively to the future.
"This is just a hurdle. The only bad thing is if the state gave us an unfavorable subjective opinion, they could have done it 12 months ago rather than make us wait," he said.
Measel, who is a private real estate developer, said the township and LCEDC intend to "roll with the punches."
State Sen. Gerald LaValle of Rochester, D-47th, also believes the project will go forward. He is part of the local contingent of state officials who have been working on securing money for the park in Harrisburg.
He said Dennis Yablonsky, secretary of the Department of Community and Economic Development, called him personally to tell him about the funding snag.
"I don't think anybody is abandoning the project. I think the [DCED] is trying to work through this thing and get as much of it as it can," he said.
cioffi@vindy.com