WILKES-BARRE — The city has signed a $600,000 deal to sell the former Hotel Sterling site downtown to a developer planning a hotel and conference center and condominiums.
The agreement was anticipated after city council approved the sale of the land in March to Gateway Center Associates or its designee for the prime real estate at the intersection of North River and West Market streets.
Kosovo native Hysni Syla, who has developed several projects in Wilkes-Barre, proposed a $35 million, mixed-use project for the site that’s been used as a parking lot since the city condemned and demolished the historic hotel in 2013.
“It’s going to stay as is,” Syla said of the lot. “For how long we don’t know.”
Construction is still a long way off as Syla said he works to line up partners for the project. “I wish next year,” he said of a possible start date.
The agreement of sale reached on May 8 with H & N Investments LLC, a Wilkes-Barre company Syla said is made up of him and his wife, set deadlines that aim to move along the project and provide legal safeguards for the city to buy back the property in the event the developer doesn’t follow through.
Within 24 months of the closing date for the sale the developer must have approvals from the Wilkes-Barre Planning Commission and Zoning Hearing Board or the city can exercise its right to repurchase under the first option.
The second option kicks in 24 months after the developer receives zoning and planning approvals. The city can repurchase the property if the developer does not have an approved construction plan, construction permits and finalized completion of construction by the deadline.
“This just protects us just in case,” said city Administrator Ted Wampole, one of the cosigners of the repurchase agreement. City Controller Darren Snyder and Syla also signed it.
H & N made a $10,000 deposit on the property and has until June 30 to settle the sale and take possession of the property, which is made up of three parcels covering just over 2 acres.
The commercial real estate agreement with H & N included several other terms in addition to the repurchase options.
The developer will pay the city $10,000 each year — with the first payment due by the end of 2019 — through 2024, when the Keystone Opportunity Zone designation and accompanying tax breaks expire.
The developer’s “Project Management Group” will work with the Diamond City Partnership’s Architectural Review Committee on the design of the project.
The conceptual designs, prepared by the 3plusarchitects of Tirana, Albania and presented to city council, received mixed reviews from residents who questioned whether the modern architecture would fit in with the surrounding buildings.
The city will pay a 3-percent broker’s fee equal to $18,000 to City Brokers LLC of Wilkes-Barre. Steve Barrouk, a former executive with the Greater Wilkes-Barre Chamber of Business and Industry, was listed at the buyer’s agent.
Finally, the agreement contained a copy of an expired memorandum of agreement between the city and the Pennsylvania State Historic Preservation Officer.
The memorandum stated that the city would involve the officer in the review of plans for proposed development on the site. But the memorandum was “null and void” if its provisions were not carried out within five years of when it was signed on Jan. 30, 2013.
Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.