FARRELL, PA. Reversion clause jeopardizes project

The federal government wants a change in the deed transferring the property from the city.
FARRELL, Pa. -- A plan to build a 10-unit apartment building for severely mentally ill tenants has hit another snag.
Independence Park, proposed by the Mercer County Community Action Agency, was to be built on the city's former ash and salt storage site on Hamilton Avenue, but those plans were scrapped in April when it was determined that it would be too costly to do a full-scale environmental assessment of the ground.
The agency and the city agreed on a new location. Farrell City Council took the first step to secure the land Monday, voting to take seven vacant lots in the 600 block of Spearman Avenue by eminent domain to assure a clear title for the agency's deed.
However, Brad Gleason of Housing and Neighborhood Development Service of Erie, the agency's developer for the project, told council that another problem has arisen.
The project is contingent on the agency's getting a $714,700 grant from the federal Department of Housing & amp; Urban Development, but Gleason said HUD now wants to change terms of the deed transfer from the city to the agency.
HUD wants to strike a reversion clause that stipulates that, should the agency decide to sell the land before it finishes the project, the city has the right to take the land back.
Gleason said HUD wants assured that it will have full control of the project from start to finish and that clause actually leaves some control in the city's hand. HUD said the clause must be stricken before the grant documents are signed.
Possible contradiction
Atty. Steve Mirizio, city solicitor, balked at the request, saying it was at HUD's insistence years ago that that particular clause was inserted in all deed transfers in federally financed projects.
HUD seems to be contradicting itself, he said, adding that he doesn't think city council has the right to remove that clause.
Gleason said the debate could put the project in jeopardy.
HUD has given the agency until Nov. 30 to begin construction or the grant will be rescinded, he said.
City council asked Mirizio to investigate the matter with HUD.
Any necessary council action could be taken at the Sept. 23 council meeting. Mayor William Morocco said he hopes that will provide enough time to get the project financing closed and construction started by the Nov. 30 deadline.

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