The City of Harrisburg has lost the battle over a liquor license that had been earmarked for the National Sports Hall of Fame.
Judge Mary D. France, bankruptcy judge for the U.S. Middle District Court of Pennsylvania, rejected the City’s latest and final plea on July 15. France ruled on June 17 the license is property of the bankruptcy estate of Violet Kanoff, a former bar/restaurant owner, and the City did not have a secure claim.
The license was assumed by the City as the result of a defaulted loan involving Kanoff and her past establishment located on Walnut Street in Harrisburg.
But Kanoff’s lawyer, Marc Allan Crum, argued Kanoff still owned the license because the City did not file the proper paperwork needed to transfer the license to another entity.
France agreed.
The City of Harrisburg will receive a smaller portion of money from the sale of the license – valued between $100,000 and $120,000 - because the City is an unsecured creditor, Crum told CBS 21 News.
CBS 21 News contacted a City spokesman for comment on Thursday but did not hear back.
In an email to CBS 21 News, the Pennsylvania Liquor Control Board on Wednesday confirmed the license is property of the bankruptcy estate, not the City. However, in order for the estate to sell or transfer the license to another buyer, it will have to pay some delinquent licensing fees – likely a few hundred dollars, according to Francesca Chapman, the LCB’s Deputy Press Secretary.
In November, CBS 21 News first reported the City of Harrisburg gave the license to the Hall of Fame for free. Harrisburg Mayor Stephen R. Reed told Bristol there was a “stipulation that if the license gets used for this restaurant/sports tavern or, alternatively, would be sold, the Revolving Loan Fund must receive at least $70,000 for it.”
A Right to Know request, however, later filed by CBS 21 News with the City returned no contracts or signed agreement that guarantees the City would ever be paid.
CBS 21 News later uncovered paperwork that revealed The National Sports Hall of Fame Foundation had little intention of repaying the City of Harrisburg for the license.
A loan pre-application filed with the United States Department of Agriculture in 2007 listed the license under “Assets;” and not “Liabilities” - even though a city memo from 2006 states the Foundation “should put the fair market value of the license on its books as owing to the city.”
On a following page, the license was noted as a “Donated Liquor License.”
Design plans for the National Sports Hall of Fame called for the facility to have a restaurant/sports bar; and the license was ascribed to NSHF Food Services, LLC, a for-profit entity headed by John Levenda, purportedly a close friend of the Reed’s.
Harrisburg City Council was hoping to reclaim the license and sell it to replenish the revolving loan program.
In March, a Harrisburg City spokesman said The National Sports Hall of Fame concept was essentially dead, due to a lack of funding, and not because of CBS 21 News' exclusive investigation into the project and its CEO and President, Mr. Levenda.
