Judge to settle ongoing Center City argument
SUNBURY - A Northumberland County judge will rule next week on the validity of the mortgage for Center City Apartments as the ownership dispute regarding the Shamokin complex continues.
Judge Charles Saylor heard 25 minutes of testimony in county court Wednesday regarding the mortgage and several other issues in the dispute between Red Gold Enterprises Inc. and the Shamokin Housing Authority.
The million-dollar mortgage is central to the ownership dispute between Red Gold, which claims it still owns the four-story complex at Independence and Shamokin streets, and the authority, which believes it legally acquired the property last year through the agency that originally issued it.
Selinsgrove attorney Robert Cravitz argued on behalf of Red Gold that the mortgage is no longer valid. He told Saylor that, in 2000, the Pennsylvania Housing Finance Agency (PHFA) entered a foreclosure action against Red Gold because the company had not made a mortgage payment for more than 11 years. However, the legal proceeding never went any further and, in 2004, Northumberland County President Judge Robert B. Sacavage gave notification that if no action was taken on the matter within 60 days, it would be dismissed.
PHFA took no further action, so Sacavage dismissed the suit "with prejudice," meaning no further action about the matter could be brought against Red Gold.
If the mortgage isn't valid, Cravitz argued, then the authority's acquisition of it has no legal standing.
Saylor asked if the foreclosure was dismissed because an agreement had been made with PHFA about making payments.
"There was no agreement as far as Red Gold is concerned," Cravitz replied.
In April, PHFA transferred the mortgage to the Shamokin Housing Authority, which said that until payment is made, all rents should be made to the housing authority.
Cravitz also said Red Gold's corporate seal was never on the mortgage's corresponding promissory note.
However, Harrisburg attorney Clayton Davidson, representing the authority for this case, produced a copy of the note that showed Red Gold's seal.
Cravitz then questioned why the note wasn't included in the original complaint, and said such evidence should have been presented in court previously.
Cravitz further argued that Red Gold has done everything the court has asked in terms of using rent payments to maintain and perform upkeep on the building, paying back taxes and providing proof of insurance to the housing authority.
Saylor asked about the status of the agreement between the two sides to share information and allow each side to collect rents until the ownership dispute is settled. Cravitz and Davidson agreed that it is working.
However, Eugene Picarella, president of Red Gold, said the authority is holding $50,000 in back rent "that rightfully belongs to us." He said the money could be used for building maintenance.
"The $50,000 that we have collected is in an escrow account," responded James Rosini, housing authority solicitor. "We have no idea what Red Gold is doing with their money."
Picarella told Saylor 20 of 28 tenants are paying rent to Red Gold and the other eight to the authority.
The authority, since February, has been withholding federal subsidies that should be going to Red Gold, Picarella also argued.
He said this lack of cash flow has resulted in the manager, Susan Good, not taking a paycheck. She receives a percentage of the rent payments.
In his argument, Davidson said that while the legal battle over the mortgage may have been dismissed, the note itself is still valid.
"Both those documents are separate but equal," he said.
"Red Gold Enterprises secured the mortgage and used the money for its own benefits to better their property, and then didn't pay the debt back," Davidson continued.
Should the housing authority take ownership of the building, it was revealed in court that a property management company would be used to manage the complex.
Saylor said he has a two-day jury trial today and Friday, necessitating that his ruling come next week.
Copyright ©2012 The News Item | 707 N. Rock St. | Shamokin, PA 17872 | (570) 644-6397
Privacy Policy | Opinion Posting Policy | About our ads | Questions or comments? Contact Us
Be the first to comment on this article!