Connellsville hotel files for bankruptcy
Official calls it a ‘speed bump’ in city’s revitilization
The opening of a 53-room hotel two years ago was supposed to herald the revival of a struggling Fayette County city as a destination for outdoor recreation.
Now, the bankruptcy of the Cobblestone Hotel & Suites in Connellsville has given city officials pause. Oakland-based Trailside Lodging LP, which owns the North First Street hotel, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The filing, made in U.S. Bankruptcy Court in Pittsburgh this week, estimated assets ranging between $1 million and $10 million and liabilities of $500,000 and $1 million. Among the biggest unsecured creditors were Fayette County-based Fairchance Construction, $230,000; BriMark Builders of Neenah Wis., $51,875; and Chart House Furniture, Zeeland, Mich., $38,000. The hotel is located next to the Great Allegheny Passage, a 334-mile former rail line turned biking trail that has been central to the revitalization of other small towns in its path, including Ohiopyle in Fayette County and Confluence in Somerset County.
The bike trail, which hugs a scenic section of the Youghiogheny River for 17 miles between Connellsville and Ohiopyle, is a natural draw for visitors, said Michael Edwards, executive director of the Connellsville Redevelopment Authority, who called the hotel bankruptcy a “speed bump” for the community.
“There are ups and downs in any community redevelopment,” he said. “We’re in it for the long haul.”
Nearby Ohiopyle may be a model for Connellsville’s rebirth. The borough has fewer than 100 year-round residents who live next to a state park with the same name. But visitors to the park and nearby towns total nearly 1.5 million annually, according to the state Department of Conservation and Natural Resources, fueling white water rafting businesses, restaurants and bike shops.
The Cobblestone Hotel is located several blocks from a business district anchored by a bike shop, two restaurants and a frozen yogurt shop that have opened in recent years. Because of the hotel’s location, attorneys anticipate a quick reorganization, said bankruptcy lawyer Daniel Schimizzi from the Downtown firm of Whiteford, Taylor & Preston LLP.
“We do not anticipate a long case at all,” Mr. Schimizzi said, “90 to 120 days. It’s a great town, a great location.”
Moreover, it’s unlikely the hotel will close, Mr. Schimizzi said, but rather emerge from protection from creditors as a “fully operating hotel.”
Connellsville City Clerk Vern Ohler said the bankruptcy was a disappointment to the city of 7,600 people. Connellsville’s poverty rate is nearly 23 percent, well above Pennsylvania’s rate of 13 percent and the U.S. rate of 14 percent.
“It hurts,” Mr. Ohler said. “Hopefully, things will get straightened out.”
The post-industrial city, located about 50 miles south of Pittsburgh and once a capital of coal and coke production, is pinning its future on outdoor recreation, Mr. Ohler said.
And the city has begun to see the early economic benefits of the Great Allegheny Passage.
Ruvo’s Italian Restaurant, a new eatery on West Crawford Avenue, is having trouble keeping up with demand, Mr. Ohler said.
“Things are picking up.”