City may buy Town Tavern building

WENDY STIVER/THE EXPRESS The city may acquire the Town Tavern building on Bellefonte Avenue and demolish it, in order to protect public safety. The building’s rear section is collapsing, threatening other properties as well as the alley to the right, which has been closed to traffic.

LOCK HAVEN — The city may buy the former Town Tavern building, to tear it down.

The owner, David Mayes, and the creditor, Stephen Poorman, have been asked to consider a purchase price of $10,000.

That building, also known as the Harmon Building, stands at 47-51 Bellefonte Ave. It has a significant hole in its roof, damage to its interior, and reportedly, a partially collapsed wall that has damaged the building next door.

Mayes owns it and is also a co-owner, with Brian Osenbach, of the vacant lot just across the alley, at 37-41 Bellefonte Ave. The city recently demolished the former furniture store that once stood on that lot and was gutted by a fire in December 2016. The demolition took place during April and May.

That now-vacant lot is listed for county judicial sale on Sept. 20.

Also up for judicial sale on that date is the Kennedy property. This building is on the corner of the same block, at 53 Bellefonte Ave., at the five-way intersection of Bellefonte Avenue and Church and Commerce streets. The owner is Earl Kennedy Jr., according to the Clinton County treasurer’s office.

From the street, this building appears to be part of the Harmon Building, but it is not. It may share a wall with that building, or there may be two independent walls up against each other, according to City Manager Gregory J. Wilson.

The city has been aware of the Harmon Building, Wilson said. There is a question of whether it is structurally sound. If it isn’t, it poses a danger to public safety.

“We are stewards of the public. We are just trying to ensure the public is safe,” Wilson said.

The burned-out husk of the former furniture store posed a danger to the public that was easily seen. City government was in contact with Mayes for more than two years, but eventually it stepped in and took on the task of razing what was left of that structure.

The city spent about $18,000 in legal fees on that project, Wilson said. Specific paperwork had to be filed and specific actions had to be followed, he said.

“We had to make sure we did everything by the book, as we were not the property owner,” he said.

As for the Harmon Building, if it poses a danger, as it appears to, the city could demolish it for the same reason. If the city owned the building, most of those $18,000 in legal fees would not apply, Wilson said. Therefore, buying the building at a nice price would save money in the long run, he said.

The city has posed the potential price of $10,000, but property taxes would come off the top.

Taxes are owed on the property for 2017 and 2018, Wilson said.

The city does not propose to take city taxes out of the $10,000, he said. That would be unfair, he added. Instead, the city would pay itself the delinquent taxes owed. This means that as far as the city is concerned, acquiring the property would cost $10,000 plus the city taxes owed.

The county and the school district taxes, however, would come out of the $10,000.

The taxes and fees for 2017 and 2018 total $5,017, Wilson said. More than half of that amount, $2,786, is city taxes and fees. The balance is $2,231 for the county and school district.

City Council has the last word on whether or not to offer $10,000 — or any money at all — for the building.

Council held a closed-door session on buying the property recently, but has not voted on the idea yet. If all parties can reach an agreement, council could see such a vote on its agenda as soon as its next meeting, which is Monday, Aug. 20 at 7 p.m., Wilson said.

Mayes has been “very, very cooperative” regarding the potential deal, according to Cyndi Walker, city code and zoning officer.

Mayes is not the only party who would have to agree. Stephen Poorman & Company Inc. of Lock Haven holds a lien on the property, and Poorman also has been approached about his willingness to sign off on the deal.

The Express was given a copy of a letter written Aug. 10 from Poorman & Group Consulting to city solicitor Justin Houser.

“I am willing to release my lien so the city does not waste tax dollars going through some unnecessary steps,” Poorman wrote in that letter.

He said he is referring to a $50,000 loan/lien which was to secure the Town Tavern building and be collateral for other loans.

Basically, if the city pays Mayes $10,000 for the building, the taxes would come off the top and the rest would go to Poorman toward the lien. Poorman would then allow that amount to satisfy the full lien.

But Poorman said Tuesday he is concerned about the amount owed in taxes. The city had not shared that amount with him, he said, so he did not know what he would receive in the end.

“When they originally said ‘would you do this,’ I said yes. They came back and said the city would not require the city taxes be paid, but the other taxes would be taken from the $10,000. Now that, I did not know or expect. Instead of being a net $10,000, it would be some unknown number,” Poorman said.

He also said he does not want to see the Harmon Building razed and he does not believe it needs to come down.

He said the two-story brick Italianate structure was built around 1885 to house the Harmon Brothers Co., which manufactured and sold a range of household products and also operated a drug store. For half a century, 1920 to 1970, it held the Dickey-Grugan Hardware Store.

Betty and Raymond Forster acquired the building in 1971 and opened the Town Tavern there. Many remember that bar and restaurant fondly, but the Forsters’ establishment was not the first Town Tavern to be operated in that building.

William P. Stoddart, Poorman’s uncle, ran the original Town Tavern Restaurant and Grille for many years. He eventually shuttered his restaurant, but he later re-opened it under the same name in the Harmon Building, where he operated his Town Tavern from 1954 to 1958. Poorman said he has fond childhood memories of visiting his uncle’s place and making and enjoying 7-Up ice cream floats during those years.

Poorman also sent the city solicitor a copy of a letter from RJD Contracting of Belleview, Wash., written to Kevin Krieger of Silverdale, Wash. This letter talks about the potential development of the Harmon Building. It refers to a walk-through of the building just about a month ago, on July 19, as well as a walk-through in 2017. It also suggests the rear section of the building, where the roof has collapsed, could be demolished for parking.

RJD Contracting also wrote that its participation hinges on several things, including a Poorman construction loan of $250,000 with no payments until 2020, completing the application for historical tax credits, and a facade grant of $20,000 from the city. (The city does not have a facade grants program. Downtown Lock Haven Inc. does give such grants when it has the funding, but only up to a maximum of $5,000.)

The floors in the Harmon Building are level, Poorman said. The back section, where the roof problem is, could be taken down, and that would still leave four apartment spaces. These could be converted into two or three larger apartments, he suggested.

One of the people who did the walk-through in July is a contractor, Poorman said. “He went through the whole building and said this is no big deal,” he said.

“If someone were to take this on, and let’s say the development would cost $250,000, they would get a $50,000 dollar-for-dollar tax credit up front (20 percent),” Poorman said. “When I bought the building, I filed Part 1 with the Pennsylvania Museum Commission to put the building on the National Register of Historic Places. It’s in the historic district. Once it’s considered historical property, you can get federal tax credits.”

Part 2 of the application should be filed when a developer decides to go forward, he said.

“I’ve done a dozen of these applications,” he said. In Lock Haven, he has successfully listed the Simon Building, Fox’s Market House Restaurant, the Grafius House on the National Register, he said.

“Once you’re on the register, anything you do to the building qualifies for a tax credit, like a new roof… If you believe the building needs all new windows to preserve it, it counts,” he continued.

“Another benefit is you don’t have to comply with local codes, in that if it’s historically significant, you don’t have to change it,” he added.

“I love old buildings. You shouldn’t change their character. They should be safe, and I want them to be safe, but you certainly don’t need to do some of the (code) things that are required today,” he said.

Poorman also suggested the city hire a grant writer and apply for a grant to restore the building.

“I guess I just hate to see the building go,” he said. “The city purchase price to me is a secondary issue. If they pay a clear, clean, net $10,000, I certainly will agree to that because I told them I would.”

Poorman himself had owned the building recently. The building had been condemned for several years, and Poorman bought it at a sheriff’s sale, in 2015. He then sold it to Mayes, in July 2016.

When Poorman bought the building, the city told him a plan needed to be in place to secure the roof, according to the city manager. Both Poorman and Mayes told the city they had plans to fix the roof, Wilson added. However, as of today, the roof still needs to be repaired.

Wilson also said the building has degraded further in the past couple of years.

About three months ago, the city required Mayes to produce an engineering study showing the building is structurally sound. Mayes did not meet the deadline to do this. The city followed its procedure and gave him a second deadline. He did not meet that one.

“Regardless of whether it’s us or someone else (who owns it), steps will have to be immediately taken to secure the property for the public’s safety. The obligation is to secure the building,” Wilson said.

Should the city decide to purchase it, the intent would be to demolish it, he affirmed.

“The city would like to see property owners invest in their buildings,” he said. “We’ve taken great steps to secure development for the city — the truck stop and the Geisinger facility. We worked tirelessly, long before they announced they were coming.”

But this particular building has decayed so far that public safety is a concern, he said.

Poorman said Tuesday he does not want to be an obstacle, even though the building has other loans and obligations tied to it.

“If the city decides it’s going to tear the building down, I don’t see any benefit in me making them spend a lot more money to acquire the property. It would be a waste of money,” he said. “I don’t want to slow them down if it’s a done deal and they are going to tear it down.”

However, he said, if there is a chance a developer would take the building on, “I would do anything possible to make that work… I would write off the liens entirely… I would consider loaning or investing.”

Wilson said demolition is not actually a done deal.

Referring to the letter from RJD Contracting, he said, “If this other opportunity is on the table and Mayes and Poorman are interested, there is nothing to preclude them from pursuing it.

“But if there is a new investor, that does not mean the city will wait as it has done since 2015,” he added. “We are on a fast-track timetable now, because a portion of the building has collapsed, and particularly because it collapsed on a neighboring property. And once again, the city has had to close a public right-of-way (the alley) because a property owner is not making an investment in a property to make it safe.”

Quickly removing the back portion of the building, which is the section that has collapsed, might be a way to address the danger, he suggested.

The city will be at the judicial sale on Sept. 20, when both the newly vacant lot and the Kennedy building are scheduled to be sold.

Properties up for judicial sale are in arrears on their taxes. A judicial sale is the next step after a tax sale.

Buyers at a judicial sale could pick up a property free and clear of taxes and of most — perhaps all — mortgages, liens and encumbrances.

The city has a lien against the vacant lot for the costs of the demolition, so it is interested in this sale.

Wilson said the Kennedy building is not collapsing, so this structure does not pose the concern for public safety that the former Town Tavern does.

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