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State officials to meet with Butler authority over Centre City project use of block grant

| Thursday, May 1, 2014, 11:15 p.m.

A state economic agency is questioning a Butler authority's plan to spend more than $130,000 in public money, some of which would go to a hotel and parking garage in the heart of the city.

“We've made commitments to the developer, and if we can't follow through, that's going to be a problem for the city and the developer,” said Art Cordwell, head of the Redevelopment Authority of the City of Butler.

Crews have started demolition work for the $18 million Centre City project, which includes an 80-room Marriott SpringHill Suites, a 260-space parking garage and a Rite Aid. Paul Dunn of developer J.S. Capitol Equities LLC in Rochester Hills, Mich., did not return messages on Thursday. A mix of public and private money is expected to pay for the development.

An April 22 letter from the Pennsylvania Department of Community and Economic Development agency questioned the authority's desire to spend $80,000 in Community Development Block grants to buy land, some of which is for Centre City. It's also questioning the authority's plan to spend $50,000 on street improvements related to Centre City.

“Would this activity benefit the entire downtown area or just the proposed Centre City project?” grant Manager William R. Snyder Jr. wrote.

The state administers the federal grant money for work that benefits low- to moderate-income people, including housing repairs, infrastructure improvement, development and planning.

“The state said we could do this, now they're saying, ‘No, you can't,' ” Cordwell said. “It's an investment in the community. It's for the public good.”

State economic development officials expect to meet with Butler officials within the next few weeks, spokeswoman Lyndsay Kensinger said.

“We hope to have a contract to the city of Butler following the meeting. Once the contract is fully executed, the city will have access to administrative funds, but will not have access to the rest of the funds until the concerns are addressed,” Kensinger said.

The authority uses 18 percent of the grant money for administrative costs, Cordwell said.

The city is expected to own 40 percent of the hotel and the developer 60 percent. The developer would build the parking garage and turn it over to the city's parking authority. The drug store would be built first and finished by the end of the year.

Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or bvidonic@tribweb.com.

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