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Infrastructure

Luzerne County Council approves infrastructure loan guarantee

After extensive discussion Tuesday, a Luzerne County Council majority agreed to guarantee a new infrastructure loan currently estimated at $51 million because all proceeds will be used to address county-owned roads and bridges.

Replacement of the Nanticoke/West Nanticoke Bridge over the Susquehanna River, currently estimated at $45 million, is stated as a project to be funded, although county officials will have flexibility if they deem other projects a higher priority, officials said.

In other business, a council majority chose to retain real estate agent Lori Spencer and Classic Properties to market and seek buyers for a county-owned residence in West Pittston and possibly other properties no longer needed by the county.

Councilman Kevin Lescavage, Spencer’s boyfriend, abstained from the discussion and vote.

Loan guarantee

The loan is possible because new state legislation customized solely for the county redirects $3 million annually for 25 years from the casino-gambling Local Share Account (LSA) to create an infrastructure fund.

The way it is set up, the county Redevelopment Authority must borrow to create the fund and then repay the debt using the annual $3 million LSA earmark.

However, the county is involved because financial institutions want assurance the county would repay the debt if the Mohegan Sun Pocono casino in Plains Township unexpectedly closes down the road.

The legislation leaves it up to the county redevelopment authority to recommend projects that should be funded, with final award approval by the Commonwealth Finance Authority — a state entity that already approves other LSA awards that are not part of this special program.

To address county council concerns about the guarantee, a memorandum of understanding between the county and redevelopment authority approved Tuesday allows council to decide which projects the authority submits to the Commonwealth Finance Authority.

Seven council members approved this memorandum: Matthew Mitchell, Chris Perry, Carl Bienias III, John Lombardo, LeeAnn McDermott, Tim McGinley and Kendra Radle.

Councilman Brian Thornton abstained, saying he is prohibited from voting on such transactions due to his employment as a financial advisor.

Three council members voted against the memorandum after expressing various concerns about the structure and evolution of the agreement: Lescavage, Stephen J. Urban and Gregory Wolovich Jr.

Urban was the lone no vote on a second decision to formally request the LSA funding, with Thornton still abstaining and Lombardo not participating due to a break in his remote attendance connection.

County Interim Operational Division Head Lawrence Plesh told council approximately 6,000 vehicles cross the Nanticoke/West Nanticoke Bridge daily.

The span was downgraded to a 15-ton weight limit in 2020 due to issues found in an inspection. The county has no funds set aside to cover this expense, and officials have said it would take at least a decade, possibly much longer, for the bridge to receive federal and state funding allocations based on the large number of infrastructure requests. The next inspection may result in lower weight limits and/or a future closure, the county administration said.

During unsuccessful attempts to table a decision on the guarantee, McGinley said council could not continue holding off on voting whether or not to provide a guarantee. The amount available for projects already has decreased from approximately $55 million to $51 million in recent months due to rising interest rates, he noted.

State Sen. John Yudichak, I-Swoyersville, attended the meeting to urge support, saying the program stemmed from complaints that county government was shut out of past LSA awards.

In response to an inquiry from Thornton, Yudichak said the Nanticoke/West Nanticoke Bridge must be repaired for safety reasons independent of Yudichak’s push to attract Houston, Texas-based Nacero Inc. to build a $6 billion manufacturing facility in that area.

“Without that bridge, lives are in jeopardy,” Yudichak said.

Although he was unable to vote, Thornton said he believes replacement of the Nanticoke/West Nanticoke Bridge is an “absolute necessity” and believes using gambling revenue instead of tax dollars to pay for it is a “great idea.”

Broker

With Lombardo still unable to connect remotely and Lescavage abstaining, six council members nominated Spencer/Classic Properties as broker, to be paid a 4% commission: Thornton, Urban, Wolovich, Bienias, McDermott and Mitchell.

Three council members unsuccessfully advocated for the selection of Christine Kutz, a broker and vice president of Kutz Real Estate Services, which would charge a 4% commission if a broker is involved for the buyer and 3% if there is no broker on behalf of the buyer. The three: Radle, Perry and McGinley.

McGinley said he believes both agencies would perform well but had a concern about a “negative perception” due to Lescavage’s relationship with Spencer.

Thornton said he was more impressed with the submission from Spencer/Classic Properties and does not believe it is in the county’s best interest to reject viable proposals from companies with employees related to council members.

Council opted for a broker to sell a residential property it owns at 1200 Susquehanna Ave. in West Pittston to ensure it is widely marketed and advertised to obtain the highest price.

The county acquired the house earlier this year as part of its settlement of 2018 litigation filed by Richard and Kimberly Hazzouri, arguing they were wrongly prevented from participating in a flood buyout program.

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