Luzerne County Council to consider $3M award for Sterling site hotel project

Six of 11 Luzerne County Council members voted Tuesday to introduce an ordinance that would allocate $3 million in county community development funding for a hotel project at the former Hotel Sterling site in downtown Wilkes-Barre.

A government study commission referendum ordinance also received more than the four votes required to advance to the next phase of the approval process, which means 2024 primary election voters may be asked to decide if they want to convene an elected citizen panel to examine the current home rule structure and possibly recommend a change.

A public hearing and approval by a council majority would be necessary at a future meeting for both ordinances to take effect.

County Manager Romilda Crocamo and county Acting Budget/Finance Division Head Mary Roselle also presented the administration’s proposed, no-tax-hike 2024 budget Tuesday.

Sterling project

Councilman Stephen J. Urban proposed the $3 million allocation toward a Gateway Hyatt Place Hotel and Conference Center on the empty lot at the corner of North River and West Market streets, saying help is needed so a downtown-boosting project is not lost, leaving the site as an “eyesore.”

In addition to Urban, the following council members agreed to introduce the ordinance and keep it under consideration: Brian Thornton, Carl Bienias III, Kevin Lescavage, John Lombardo and LeeAnn McDermott.

The five council members voting no: Matthew Mitchell, Chris Perry, Gregory S. Wolovich Jr., Tim McGinley and Kendra Vough.

Wolovich said the proposal was “brought out of left field” and that council should have scheduled a presentation about specifics before it voted on the ordinance introduction instead of waiting for the subsequent work session.

During public comment following the vote, Hysni (Sam) Syla, managing partner of H&N Investments LLC, the hotel/conference center developer, spoke about three multi-story residential projects he completed in the Wyoming Valley that were privately funded and said he is equally committed to developing the Sterling site.

A summary of some work session updates provided by Stephen Barrouk, who is involved in the project:

The 112-room hotel and conference center is estimated at $36.36 million, which does not include a 150-vehicle public parkade projected at $2.8 million.

Developers paid $700,000 for the land and are working to secure a $21 million loan toward the hotel/conference center. The state has committed $7 million in grants toward the project to date, and there also is a $225,000 contribution from Hyatt. That leaves a gap of about $7 million.

“We’re close, but we’re not there yet, and without your help we may not get there,” Barrouk said.

If the county approves the $3 million allocation, developers will again approach state officials seeking assistance to close the gap.

For the parkade, the county awarded $2 million in federal American Rescue Plan funds, and the Wilkes-Barre Industrial Development Authority and hotel developer want to seek casino gambling funding to cover the rest.

The garage is a public-private partnership involving the city authority and H&N Investments.

The nearly 10,000 square-foot conference center will include a ballroom and occupy the portion of the property fronting River Street. Approximately 3,100 square feet of retail space is included in the design along with an urban park along West Market Street that can hold outdoor activities for hotel and conference guests.

Barrouk released a map showing most of the site is more challenging to develop because much of the debris from the Hotel Sterling demolition was dumped in the hotel basement, and that material must be extracted and hauled away for the new hotel construction.

The hotel will help small downtown businesses that are “hurting,” Barrouk said, providing other examples of public investment in hotels in other areas.

Study commission

Before council’s vote on the referendum ordinance introduction, county assistant solicitor Shannon Crake Lapsansky sent a memo making it clear the study commission would still be free to recommend a return to the prior three-commissioner/row officer structure that was replaced by home rule’s 2012 implementation.

There was some confusion because the referendum itself would ask if a study commission should be convened to consider the advisability of a home rule charter adoption.

State law only allows counties to pick one of three questions to appear on the ballot, and the one selected is the only option that does not allow the commission to consider an “optional plan.” Crake Lapsansky said optional plans are pre-drafted structures more appropriate for a small municipality that do not address county needs, such as oversight of a prison or elections.

“The question should not be read as the only thing a government study commission can do is look at our existing charter and recommend changes or recommend a new charter,” Crake Lapsansky wrote. “Although a government study commission has the authority to do either of those, it would have the ability to recommend going back to the third class county code as well.”

If council approves the referendum ordinance at a subsequent meeting, primary voters would then have to simultaneously decide if they want to convene a commission and choose the citizens who will serve on it. The commission candidates would only serve if the referendum passes.

Study commissions have 18 months to decide if a change in government is warranted and, if so, prepare a recommendation on how to proceed. Voters must approve a resulting, recommended change for it to take effect.

“It is my opinion that if a majority of voters vote yes for a government study commission, the commission will study our form of government and issue a report and recommendations it believes is best for the citizens of Luzerne County as a whole, and their powers cannot be hamstrung or limited to only a ‘charter review committee,’” Crake Lapsansky wrote.

Without any debate, eight council members voted to introduce the referendum ordinance: McDermott, Mitchell, Thornton, Urban, Bienias, Lescavage, Lombardo and Vough.

Three opposed the ordinance advancement: McGinley, Perry and Wolovich.

Supporters have said council is left with no other options to make improvements. Critics said it’s not worth the risk of losing the home rule structure.

State law allows commissions with seven, nine or 11 members. The ordinance states it will be seven, with the other numbers in parenthesis as other options, but council did not expressly discuss whether seven is the plan.

Budget

Crocamo thanked the “fab five” budget team: Roselle, Budget/Finance Deputy Director Chris Dalessandro, Deputy Controller Thomas Sokola, budget/finance Office Administrator Mark Majikes and Human Services Fiscal Officer Adam Wiernusz.

“We are thrilled to formally announce that, despite the challenges we face, our budget team has successfully devised a budget plan that does not involve any tax increases,” Crocamo told council. “We recognize the importance of keeping the burden on our citizens as low as possible, especially during these challenging times.”

The $164.5 million budget contains $2.7 million in additional revenue, largely due to a $1.2 million increase in real estate tax revenue from added assessed value. The budget also raises non-union employee contributions toward health insurance from 10% to 11%, which will bring in an additional $50,000.

Roselle said the budget contains a $255,000 reserve, which is $10,000 higher than this year’s initial budgeted allocation. The budget includes a 2.5% increase for non-union workers at $370,000.

The budget also is conservative in allocating funds for vacant positions so there is not an excessive cushion, Roselle said.

The proposed budget is posted under the budget/finance section at luzernecounty.org. Council members have scheduled public budget hearings and will consider amendments before it votes on the final adoption in December.