Agents look at Judge Zola’s office lease

Federal authorities are investigating Luzerne County’s controversial leasing of a Hazleton building that houses the offices of District Judge Joseph Zola, according to a subpoena issued to Controller Walter Griffith.

Griffith showed the subpoena to the media Tuesday, saying he believes it is a public record.

The document requested all records dating back to 2004 relating to the county’s lease of 615 E. Broad St., Hazleton, which is owned by Zola’s friend, Leonard Rossi, of Grande Inc.

Griffith said he can’t reveal questions asked by federal agents but said he is personally questioning a $58,911 payment to Grande on Dec. 6, 2006.

This payment covers rent from March 1, 2006, through Nov. 31, 2006, but commissioners didn’t vote to lease the building until Oct. 2006.

Leases are supposed to be approved by commissioners before a county entity moves into a building, Griffith said.

The lease wasn’t formally signed by commissioners until Dec. 1, 2006, but both the lease and invoice for the $58,911 payment indicate that Zola had been occupying the space since Dec. 1 of the previous year.

Griffith questions the legality of approving the leasing of space a year after the fact.

“If they were there without a lease, why? Who authorized Zola to move into that space without a lease?” Griffith said.

Zola, who did not immediately return a message left with his secretary Tuesday, has acknowledged that he and Rossi are friends, but he has maintained that he chose the building because he thought it was the best fit, not as a favor. Rossi could not be reached Tuesday at his home, on his cell phone or at his business, Rossi Coal Co.

The move into his building stemmed from the county’s decision to evacuate its nearby rented annex on Broad Street in September 2005 due to a suspicion of toxic mold that was later deemed unfounded.

Rossi bought the building at 615 E. Broad St. a month after the mold scare, on Oct. 24, 2005, for $150,000.

Zola had temporarily moved his office in with District Justice Thomas Sharkey in Hazle Township after the mold scare, but then-county chief clerk/manager Sam Guesto said the state was pushing Zola to get his own space.

Guesto said at the time that other sites were examined, but Rossi’s building was the most suitable and ready for occupation.

County minority Commissioner Stephen A. Urban said he never bought that argument because he’s confident that the state would have allowed Zola to remain with Sharkey until the county publicly sought requests from other building owners interested in leasing office space.

The lease, approved by then-commissioners Todd Vonderheid and Greg Skrepenak, paid Grande $78,540 per year – an amount that Urban has repeatedly described as a “sweetheart deal” and excessive compared to other magisterial office rentals.

“They set up a purchasing policy to get the best price, but they never followed through with this one,” Urban said. “This was not an emergency situation.”

County commissioners recently sought proposals when the lease expired, and Rossi cut his rates to come in with the lowest price – $62,675 per year in 2010 and 2011 – saving the county $31,730 over the next two years.

The county will also save more because Hazleton area probation workers will now share the same 3,500-square-foot space with Zola and his staff.

The county had started leasing a West Hazleton building after the mold scare as a substitute southern county annex to house probation and other departments, but commissioners are ending that lease.

The county had been paying about $6,000 per month, or $72,000 a year, to rent that building from BEKIDS Property Management. Robert Powell, who was charged as part of the ongoing federal corruption probe, had previously rented that space from BEKIDS for his law firm before relocating to his own building in Butler Township.

Urban said he hopes federal investigators also examine the county’s purchase of another property stemming from the mold scare – a former Hazleton bank building that cost $700,000.

Skrepenak and Vonderheid had voted to buy that building in May 2007 from Val-Mar Holdings for $605,000 through eminent domain, but a court panel later ordered the county to pay $700,000. Their original plan to lease the building for $2.58 million over 10 years was scrapped after public outrage.

Val-Mar is owned at least in part by then-county planning commission member Frank DeGaetano. Urban had opposed the lease and purchase, pointing out that Val-Mar bought the building for $330,000 in December 2005 and had done little, if any, work on the structure.

The building was never permanently occupied by any county offices, and Urban and Commissioner Maryanne Petrilla decided to sell it, saying it would be too costly to renovate. No buyers have surfaced since the property was put on the market for $625,000 more than a year ago.

“The purchase of that building was a total waste of tax dollars,” Urban said.

The county’s original annex that was evacuated after the mold scare was later deemed safe and now houses Lackawanna College.

Hazleton City Councilwoman Evelyn Graham said she never understood the mold scare.

“It was one dot of mold about the size of a nickel. I took a moistened paper towel and wiped it off,” Graham said.

After the county left, she personally paid for a new roof and windows because the city couldn’t afford the repairs and she didn’t want the historic structure to deteriorate. The county could have saved “all the moving around and additional expenses” if it had stayed put and made minimal repairs, she said.

“It’s a very fine building, a great example of a well-built structure,” Graham said. “I’m glad it’s being used. It’s a real asset to the city.”

Griffith said Tuesday that he supplied authorities with a copy of the Grande lease, as well as all checks that were written to Rossi and/or Grande Inc. in the requested time period.

The subpoena directed him to appear at federal court in Scranton Tuesday morning to testify before a grand jury, but the session was canceled for an unknown reason.

Griffith said one of the agents explained that it was not necessary for him to appear because he had already provided all the documents requested. Griffith said he opted to show up anyway just in case there were questions.

“He has been out in front warning people about this issue, and nothing was done about it,” Griffith said.