Wilkes Rips King's, Sets Record With 10-0 Start

311 Non-emergency Number Also Faces Hang-up

By MELISSA M. DONOVAN; Times Leader Staff Writer
 Wednesday, January 14, 1998 &nbsp;&nbsp;&nbsp;&nbsp;Page: 1A 





WILKES-BARRE- Four months ago, Mayor Tom McGroarty held a "parking summit,"
at which he said he would add two levels to Park &amp; Lock North, the garage next
to the Ramada Plaza Hotel. &nbsp;&nbsp;&nbsp; 
 Three months ago, he stood outside the garage to formally announce the $3
million project. &nbsp;&nbsp;&nbsp; Last month, he said the hotel, which has a right to buy the garage in 30
years, was thwarting his plan. But he wasn't giving up hope. &nbsp;&nbsp;&nbsp; 
 Last week, McGroarty talked about the hotel again. This time, he repeatedly
and publicly attacked the Ramada about another issue, alleging the owners
might have "manipulated" a 1979 loan and are cheating the city. &nbsp;&nbsp;&nbsp; 
 That's not a coincidence, say two sources on different sides of the loan
issue. McGroarty hopes that questioning the loan will help him get his way on
the parking garage project, they say. "It's a fake issue," one source said. &nbsp;&nbsp;&nbsp; 
 McGroarty ridiculed talk that he is attacking the Ramada because of the
garage debate. &nbsp;&nbsp;&nbsp; 
 "If it was a tactic, you'd have to consider me the smartest man in the
world," he said. &nbsp;&nbsp;&nbsp; 
 McGroarty brandished a letter from the U.S. Department of Housing and Urban
Development that he said tells the city to account for the "missing" $1.6
million. McGroarty said he's reacting to pressure from HUD. &nbsp;&nbsp;&nbsp; 
 But HUD officials call the letter routine. And some others familiar with
the loan differ sharply with the mayor. &nbsp;&nbsp;&nbsp; 
 City Council Vice Chairman Bernie Mengeringhausen has heard the rumors that
the loan issue is a political tool. He doesn't know if they are true. But he's
worried that McGroarty might waste up to $20,000 on an unnecessary audit of
the loan. &nbsp;&nbsp;&nbsp; 
 At issue is an Urban Development Action Grant loan that lured the hotel,
then called the Wilkes-Barre Inn, to flood-ravaged Public Square. &nbsp;&nbsp;&nbsp; 
 At McGroarty's urging, City Council voted Thursday for the audit to find
out why the hotel hasn't made payments for several years. &nbsp;&nbsp;&nbsp; 
 McGroarty cites a letter he received from Louis S. Williams, deputy
director of HUD's Office of Community Planning and Development, in early
December. It asks for more information about an unspecified loan. &nbsp;&nbsp;&nbsp; 
 The letter seemed "stronger in tone" than similar letters received in the
past, said City Attorney Marisue Elias. &nbsp;&nbsp;&nbsp; 
 Diane Lello, a spokeswoman for Williams, said she couldn't comment on the
mayor's handling of the loan. But the letter he received was routine, she
said. Such letters are sent every time HUD reviews a city's annual audit. &nbsp;&nbsp;&nbsp; 
 Because the loan payments go to the city, not HUD, the federal agency has
little involvement, she said. &nbsp;&nbsp;&nbsp; 
 Locally, several officials say the hotel is following the agreement. &nbsp;&nbsp;&nbsp; 
 "I don't know where the word `missing' comes in," said Joseph Williams,
director of the Wilkes-Barre Industrial Development Authority, which handled
the loan. The "liberal" terms of the loan allow the hotel to skip payments in
years it doesn't show a profit, Williams said. But the whole thing must be
paid by 2015. &nbsp;&nbsp;&nbsp; 
 Mengeringhausen, a former member of the development authority, agrees that
the hotel is within its legal rights. He fears that hiring the accounting firm
Hall-Mihalos-Straub &amp; Co. of Wilkes-Barre was "too fast a move." &nbsp;&nbsp;&nbsp; 
 Even without council's approval, the mayor could hire the accountants, said
Mengeringhausen, who hopes the audit isn't done. &nbsp;&nbsp;&nbsp; 
 Two people close to the issue say the mayor wants to pressure the hotel
into renegotiating the hotel's option to buy Park &amp; Lock North. An agreement
signed years ago gives the hotel owners, Grosek Associates, the right to buy
the garage from the city in approximately 30 years for $1.2 million. &nbsp;&nbsp;&nbsp; 
 They've refused to renegotiate, McGroarty said. That's why he is abandoning
the plan to expand the garage. It doesn't make sense to spend $3 million to
expand a garage that can only be sold for just $1.2 million, the mayor said. &nbsp;&nbsp;&nbsp; 
 Anthony Grosek, manager of the hotel, said he was unaware of the option to
buy the garage. The HUD loan has gone unpaid because the hotel puts so much
money into maintaining the property that it can't afford th

Mcgroarty Pressuring Hotel Over Garage, Sources Say 
Wilkes-barre's Mayor Would Like To 
Expand The Park & Lock North, But 
The Ramada Plaza Hotel Has Rights To 
Purchase The Garage Eventually

Mcgroarty Pressuring Hotel Over Garage, Sources Say Wilkes-barre's Mayor Would Like To Expand The Park & Lock North, But The Ramada Plaza Hotel Has Rights To Purchase The Garage Eventually