The Centre City in Butler project could be in jeopardy because of the financial concerns of Kelly Automotive Park.

Art Cordwell, executive director of the city redevelopment authority, said Monday night that if the authority goes bankrupt then it may not get a $2 million state grant to help finance the proposed Marriott Springhill Suites hotel downtown.

“In my mind, if that happens, then the grant money from the state is gone,” he said.

The authority owes more than $45,000 in late payments on the ballpark’s mortgage. It received a default letter in January from Dollar Bank.

Cordwell said the city Parks, Recreation Grounds and Facilities authority, which manages the park, is responsible for making those payments under an agreement between the two boards. He added that the facilities authority budgeted $8,800 per month on mortgage payments this year.

However, the facilities board last week said it ultimately is the redevelopment authority that is responsible for paying the mortgage.

“We have to pay for a park in which we have no control in managing,” Cordwell said.

Cordwell said the facilities authority’s sale of its share of the Butler BlueSox baseball team should have gone to pay the bank for the overdue mortgage payments. The authority sold its share of the baseball team for $40,000 earlier this year and is using the money to pay off other debts.

“The original intention was for that money to go to the bank,” said Cordwell, who was a member of the facilities board at that time.

“Instead they put it in a separate bank account so the bank couldn’t get its hands on it,” Cordwell said.

The facilities authority last week also said it would not pay the redevelopment authority about $140,000 in previously listed debts, claiming that money was associated with cost overruns on the stadium, and therefore is the responsibility of the redevelopment authority.

Cordwell was critical of that decision, saying it seemed the facilities board was trying to “drive the redevelopment authority into bankruptcy.”

“This is not a good situation,” Cordwell said. “The organizations are not working together. All they’re doing is throwing knives at each other.”

Cordwell said the loss of the $140,000 and a default on the stadium could lead the redevelopment authority into bankruptcy because it also has previously defaulted on its mortgage on the former Penn Theater on Main Street.

He said if the redevelopment authority does declare bankruptcy, it could mean an end to the Centre City project.

The redevelopment authority will be a 36 percent owner of the proposed hotel to be built on the corner of East Jefferson and South McKean streets. It plans to use a $2 million state grant on the hotel, partnering with developer J.S. Capitol Construction, which owns the other 64 percent of the building’s stake.

“I think the state would take that money back,” Cordwell said. “And without that money, there is no hotel.”

The city also has a proposed 239 space parking garage set to be built as part of the Centre City project, although its construction is dependent on the hotel. Construction on both those projects is expected to begin this summer.

A new Rite Aid Pharmacy — the third piece of the overall project — was completed in December.

Cordwell said the redevelopment authority has already invested about $200,000 in the Centre City project.

Cordwell said he still believes the project will move forward, but said the facilities authority’s decisions are a major concern.

Cordwell said the facilities authority is focusing more on passing blame off to the redevelopment authority than it is on working to pay off the stadium.

“This is not in the best interest of the community,” he said. “It looks like that board is putting private interests first to say ‘look who’s responsible for this.’”

Cordwell also criticized the facilities authority’s claim that it first learned of the default on the mortgage payments last week.

Cordwell said that board discussed on multiple occasions last year its inability to keep up on mortgage payments. He said he also reported to his board in February that Dollar Bank is moving forward with a default, saying the city was sent the minutes to that meeting.

Nick Ban, chairman of the facilities authority, could not be reached for comment this morning.

Board member Joe Gray said the two authorities need to work together.

“Cooler heads need to prevail,” he said.

Cordwell resigns

Cordwell submitted a signed letter of resignation to the redevelopment authority’s board, citing comments made by Mayor Tom Donaldson and members of the facilities authority about the management of the redevelopment authority.

However, the authority’s board took no action on the letter following a lengthy executive session.

“We decided not to discuss it further at this time,” Cordwell said. Cordwell added he will continue to work for now.

The board must approve the letter of resignation, according to its solicitor.

In addition to the comments on the authority’s management, Cordwell also said he has not been paid since November due to the financial turmoil of the authority. He earns $26,000 per year as executive director.

Gray praised Cordwell’s work for the authority.

“I think Art has done a fantastic job to get us to this point,” he said. “We still have troubles, but we have half the trouble of when he started.”

Chairman Fred Reese said he believes the authority is headed in the right direction.

“We’re not far from turning that corner,” he said.

What is next

Donaldson, who was in attendance at the meeting, said it is his understanding that the facilities authority is attempting to work out an agreement with Dollar Bank to turn over ownership of the park from the redevelopment authority to the facilities authority.

“My thought is that frees up you guys and takes away that threat of bankruptcy,” he said.

Gray said he would support that proposal.

“I think it’s a good idea,” he said. “We just add another layer of management. The redevelopment authority is a middleman.”

Cordwell said the redevelopment authority only took on the mortgage of the ballpark because the facilities authority, which was newly created at the time the park was built, was unable to get the financing needed.