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Pennsylvania's Sno Mountain financial woes

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Sno Mountain set for sheriff's sale in July


Published: June 27, 2012

The bank that holds the mortgage on the Snö Mountain ski resort and Snö Cove water park has foreclosed on the property, which is scheduled to be sold at a sheriff's sale next month. The water park was open Tuesday and will remain open because the owners are nearing refinancing of its debt, general manager Mark Verrastro said. "They're not going to let it go at a sheriff's sale," Mr. Verrastro said. "We do have momentum going into the summer. We are staying open."

The resort/water park is owned by Snö Mountain LLC. The mortgage lists the company and Denis J. Carlson, Charles Hertzog and Edward Reitmeyer as borrowers. Mr. Carlson once regularly spoke for the company but has failed to return repeated telephone calls since October, when the resort's financial troubles first became public. Efforts to reach him Tuesday were again unsuccessful. National Penn Bank of Boyertown claims it is owed $6,654,473.03 in principal on a $7.5 million mortgage signed, according to Lackawanna County records, in April 2009 and renegotiated in November 2010. Efforts to reach lawyers for the bank to confirm that a refinancing is imminent were unsuccessful.

The sheriff's sale is set for 10 a.m. July 17 with the 388.94-acre resort/water park first on the sale list. A sheriff's sale is an auction. If the resort/water park is sold at the sale, the successful bidder will own the property, and will be liable for all its unpaid bills, said county Chief Deputy Sheriff Dom Manetti. Resort officials promised as far back as November that a refinancing deal was around the corner. Mr. Verrastro said he recently spoke to Mr. Carlson, who told him the refinancing is almost complete, but said he is not certain why the deal is taking so long. The bank actually filed papers foreclosing in late March, but the sale was not scheduled until last week. The resort's financial troubles are well-documented. It defaulted on a $5 million state loan before renegotiating the terms of the $4.5 million balance earlier this year with no payments for up to a year. The resort also had more than $1.5 million in unpaid bills, and was without power for three weeks before electrical service resumed in late October.

Ron Koldjeski, director of the county Tax Claim Bureau, which collects delinquent taxes, said the resort now owes more than $707,000 in delinquent county and Scranton School District taxes, penalties, interest and fees for 2009, 2010 and 2011. Mr. Koldjeski said the taxes must be repaid as part of the refinancing or the resort will be listed for his office's upset tax sale scheduled for September. Efforts to determine how much, if anything, Snö Mountain owes in city taxes were unsuccessful. Because Snö Mountain's liabilities would go along with it at the upset sale, it would be unlikely to sell and would then go into a judicial sale in February, Mr. Koldjeski said. At judicial sales, buyers get properties free and clear of any past debts, usually generating more interest from bidders. Mr. Koldjeski said he has discussed Snö Mountain's bills with the county commissioners. "We don't want to be in any way, shape or form an obstacle or to stop the refinancing," he said. "We want to give them every opportunity to pay their taxes. But if they don't, well, we have to protect the taxpayers."

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