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WILKES-BARRE — An attempt to delay the sale of the former Hotel Sterling site and demand more detailed financial information from the developer failed Thursday as city council approved the $600,000 deal with Gateway Center Associates.

Council voted 4-1 to sell the slightly more than 2-acre site for a mixed-use building made up of a hotel, retail space and condominiums selling for as high as $500,000 with panoramic views of the Wyoming Valley and the Susquehanna River.

Councilwoman Beth Gilbert found some support from the public, but not from council to hold off the vote until the April 12 meeting so that developer Hysni “Sam” Syla could provide assurance he had the financing to build the $35 million project on the dirt lot located at West Market and North River streets.

Gilbert pointed out a similar project first proposed in late 2015 on downtown land a few blocks away hasn’t been built. Waiting a few more weeks would not hurt Syla’s project and could spare the city from future harm.

“Right now, I don’t feel 100 percent confident that this is going to get built,” Gilbert said.

Syla’s Gateway Center Associates of Wilkes-Barre was the unanimous selection by a committee, that included Gilbert, of the two proposals submitted to the city to develop the site left vacant with the demolition of the landmark hotel in 2013. The sale price offered by Gateway was less than the $650,000 from The McClure Company Inc. of St. Petersburg, Fla., and the total $1.3 million appraised value of the three parcels.

But the city has been more interested in finding the best use of the property and getting back the nearly $600,000 it spent to secure the condemned hotel and demolish it after a prior attempt by the nonprofit CityVest to develop the site failed after receiving a $6 million loan from Luzerne County Community Development Office. Any proceeds in excess of the city’s costs would have to be turned over to the county to be put back into the loan program funded by the U.S. Department of Housing and Urban Development.

While noting Syla, a native of Kosovo, has a good track record with other city projects, hotelier Gus Genetti urged caution on council’s part.

“A simple agreement such as this wouldn’t necessarily prevent anybody from just paving it and making it into a parking lot. And if that were the case, then I would like to also offer that I would like to purchase it for the same price,” Genetti said.

“A simple paragraph to turn over a property like that is foolhardy. You need to have some safeguards.”

Councilman Bill Barrett opposed any further delays and the addition of conditions sought by Gilbert who said she’s heard from people who disliked the design of the building presented in a video at council’s Tuesday work session.

“We have to keep in mind what’s before us here,” Barrett said, referring to the agenda resolution dealing with the land sale.

“Right now, one paragraph is what’s in front us. I don’t agree with adding to the this,” Barrett said.

The time and place to do the due diligence on the developer was when the selection committee was reviewing the proposals, Barrett said.

Another committee member, Larry Newman, told council to proceed with the sale.

“It represents a tremendous opportunity to repair and rebuild the western entrance to downtown, putting this key riverfront site back to work both as economic generator and as a point of pride for our entire city,” said Newman, executive director of the Diamond City Partnership, the downtown economic development organization.

The design of the project presented Tuesday was “undeniably conceptual,” and subject to change, he said.

Gilbert raised some valid points that could be addressed before the sale is finalized, said Steve Barrouk, a real estate broker and former Greater Wilkes-Barre Chamber of Business and Industry executive working with Syla on the project.

Barrouk responded to statements and questions raised during public comment before council’s vote.

The site is in a Keystone Opportunity Zone that provides tax breaks through 2024. But once the project is completed, there will be four years left before the KOZ expires, he said.

Given that the city is not receiving tax revenue from the site, Syla is willing to make $10,000 annual payments in lieu of taxes as a gesture of goodwill, Barrouk said.

Syla intends to rely on private investment to build, added Barrouk.

“We’re not going to come in and ask for any grants from the city to build the building,” he said.

The price offered by Syla is comparable to the $300,000 an acre paid for land near the Mohegan Sun Arena at Casey Plaza in Wilkes-Barre Township where many retail spaces, restaurants and hotels have been built, Barrouk said. Syla’s offered “maybe even more than it’s worth,” Barrouk said.

And once Syla buys it, he’s holding onto the land, said Barrouk. “There’s no intention to build this and sell this to a college,” he said.

George Albert, whose engineering firm is consulting on the project, also vouched for Syla.

”You have a developer here whose vested in the community already and has expressed an open willingness to work with the city and the community to do this project,” said Albert.

The conceptual design of the mixed-use building proposed by developer Gateway Center Associates for the former Hotel Sterling site in Wilkes-Barre has raised some concerns, but what was shown to city council was not final and subject to change. The city approved the sale of the Sterling site for $600,000 on Thursday.
https://www.timesleader.com/wp-content/uploads/2018/03/web1_1_Sterling.jpg.optimal.jpgThe conceptual design of the mixed-use building proposed by developer Gateway Center Associates for the former Hotel Sterling site in Wilkes-Barre has raised some concerns, but what was shown to city council was not final and subject to change. The city approved the sale of the Sterling site for $600,000 on Thursday.

Gateway Center Associates’ preliminary design of two buildings on the site of the former Hotel Sterling site in downtown Wilkes-Barre likely will be revised to one building. Plans call for a hotel, retail space, parking and condominiums selling for as much as $500,000 with panoramic views of the Wyoming Valley and the Susquehanna River.
https://www.timesleader.com/wp-content/uploads/2018/03/web1_2_Sterling.jpg.optimal.jpgGateway Center Associates’ preliminary design of two buildings on the site of the former Hotel Sterling site in downtown Wilkes-Barre likely will be revised to one building. Plans call for a hotel, retail space, parking and condominiums selling for as much as $500,000 with panoramic views of the Wyoming Valley and the Susquehanna River.

https://www.timesleader.com/wp-content/uploads/2018/03/web1_3_Sterling.jpg.optimal.jpg

By Jerry Lynott

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Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.