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Middletown ICDA resets Tattered Flag meeting - but water and sewer authority throws a new "wrench" in the plan



A vote Tuesday night by Middletown’s water and sewer authority casts a new shadow on whether the borough can afford the plan to bring the proposed Tattered Flag craft brewery/distillery project to The Elks Building.


The authority voted unanimously that a $3.8 million pot of money that the authority on March 30 transferred to another authority - the Middletown Industrial and Commercial Development Authority - can only be used for “infrastructure” projects.


Infrastructure projects mean projects like the replacing of water snd sewer lines under Main Street, said Water and Sewer Authority Chairman John Patten. It does not include using the money to retrofit the Elks Building to accommodate Tattered Flag, which wants to open a craft brewery/distillery/brew pub in the 104-year-old building, Patten said.


The $3.8 million has been identified by the ICDA as a source of funds for a proposed $1.5 million loan package that the ICDA is now considering for Tattered Flag. Of that amount, $1.1 million would be loaned to Tattered Flag as cash to retrofit the Elks Building; the remaining $400,000 would be provided as financing for Tattered Flag to purchase the Elks Building.


Legality Affirmed, And Questioned


However, other borough officials are questioning whether the water and sewer authority can legally place restrictions - after the fact - upon money the authority has already transferred to the ICDA.


Mayor James H. Curry III, who was at tonight’s authority meeting, said that in his personal opinion, the water and sewer motion regarding the $3.8 million is not legally binding.


“Can this body legally tell the ICDA how to spend the money” since the money has already been transferred to the ICDA, Curry asked.


“We believe it is legally binding,” Patten responded.


The Tattered Flag proposal was to be the subject of an ICDA meeting that had been planned for tonight - Tuesday, July 28 - immediately after the water and sewer authority.


But earlier Tuesday the ICDA abruptly cancelled the meeting, because it had not been legally advertised to the public. 


The meeting cancellation now looks fortuitous, in that it provides the ICDA and its solicitor a few days to try and figure out what impact, if any, tonight’s water and sewer authority vote has on the Tattered Flag plan.


As of now, the ICDA plans to meet at 7 p.m. on Monday, Aug. 3, in the MCSO Building, ICDA Chairman Matt Tunnell told The Press and Journal. The meeting is to open with a presentation from the Tattered Flag partners on their plans for The Elks Building, followed by a question and answer session between Tattered Flag and the public.


The authority is to then consider approving a lease deal with Tattered Flag. 


Middletown Borough Council is also scheduled to meet Monday night. Tunnel said council’s normal 7 p.m. start is to be pushed back to 7:30 to allow for the Tattered Flag presentation and the authority meeting. Tunnel acknowledged it could be a long evening.


Tunnell - who supports the Tattered Flag lease deal now before the ICDA - said he hopes council will consider acting on the lease during its own meeting Monday following the authority session.


Borough council July 20 voted 5-1 that any expenditure of the $3.8 million be subject to council approval - giving council a potential veto on the Tattered Flag lease deal even if the ICDA approves it.


 "A Wrench Into Everything"


However, the water and sewer authority’s own vote seeking to restrict the $3.8 million already transferred to the ICDA “throws a wrench into everything,” said Middletown Borough Councilor Ben Kapenstein, who was also at tonight’s water and sewer authority meeting.


But as with Curry, Kapenstein also doubts whether the water and sewer authority vote is legally binding, since the money was already transferred to the ICDA.


“I don’t see how you can put strings on that money,” Kapenstein told the water and sewer authority. “I don’t think that’s possible. You transferred the money over there. You didn’t put strings on it when you sent it over.”


Reached afterward, Tunnell cited a legal opinion from the water and sewer authority solicitor, Timothy Horstmann, that was shared with the ICDA at the time of the transfer of the $3.8 million.


The opinion from Horstmann “indicated a very broad range of uses for that funding, beyond just infrastructure projects,” Tunnell said. “There were no conditions placed upon those dollars from the borough authority.”


Moreover, “those dollars have been transferred” to the ICDA, Tunnell added. “I’m not sure that this (water and sewer authority action) tonight has any real bearing on how that money can be used.” 


As it now stands, the ICDA needs the $3.8 million to fund all or “certainly a portion” of the $1.5 million loan to Tattered Flag, Tunnell said. 


“There is not enough money we (the ICDA) have access to” to fund the Tattered Flag deal without relying on the $3.8 million, Tunnell said. Otherwise, the ICDA has about $425,000 in unrestricted capital funds. Tattered Flag would have to decide if that reduced amount is sufficient to cover what the company wants to do in the Elks, Tunnell said.


Curry after the meeting said he supports Tattered Flag coming to Middletown, but that the amount of money being loaned to the company should be reduced - in part to lower the risk to the borough if the project fails, and in part to be fair to other borough businesses and residents.


The borough should earmark some of the money to assist residents, as well as to help other businesses that have been in town for a long time - instead of devoting such a large block of funding just for Tattered Flag, Curry said.


For instance, Curry said he would be more supportive of an earlier version of the Tattered Flag deal that proposed a loan of about $600,000, with the borough retaining ownership of The Elks Building.


“It’s easy to be enamored over” a project like the one proposed by Tattered Flag, Curry said. “It’s our job to play devil’s advocate. To spend it all and not give something back to the people I think would be unfair.”


Water/Sewer Authority Still Alive


A sub-plot in this unfolding drama is the continued existence of the water and sewer authority. The authority was supposed to go out of business at the beginning of this year, as a result of the 50-year lease of the borough’s water and sewer systems to United Water going into effect Jan. 1.


At first it was assumed that the water and sewer authority was on temporary life support until some permitting issues could be worked out. On March 30 the water and sewer authority, thinking itself about to  dissolve, voted to transfer approximately $8 million in proceeds related to the lease deal to the ICDA.


Of that, $4.3 million was money paid by ratepayers between when the borough approved the lease deal with United Water in September 2014, and when the deal went into effect. The ICDA transferred the $4.3 million back to the water and sewer authority, since it came directly from ratepayers.


The remaining $3.8 million that the water and sewer authority transferred to the ICDA is derived from the $43 million one-time payment that the borough got from United Water in return for agreeing to the lease deal - known as “the concession.”


The ICDA considered this "an appropriate transfer" and did not transfer the money back, Tunnell has said.


However, Patten after the water and sewer authority meeting said that the concession money should be restricted to infrastructure projects directly benefitting the water and sewer systems. Money from the lease deal was never intended to go for projects beyond this scope, he said.


It now also appears likely that the water and sewer authority may need to continue to exist throughout the entire 50-year lease of the water and sewer systems to United Water, Patten said.


For example, he pointed to concerns that have surfaced recently that transferring to United Water wells that were under the water and sewer authority could lead to these wells being claimed by the Susquehanna River Basin Commission, Patten said.


Ensuring these wells stay under borough control is reason enough for the water and sewer authority to continue to exist - even if it only has to meet once a year, Patten said.



Last Updated on Wednesday, 29 July 2015 10:40

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Nancy Schenck dies


Many people from Middletown were saddened by the death of Nancy Schenck, the former executive director of the Middletown office of the American Red Cross. She died on Thursday, July 23 in western Pennsylvania.schenckpic7 29 15WEBNancy Schenck

Friends remember Schenck, a Middletown native who retired from the Red Cross in 2014 and moved to Cranberry to be with her daughter, for her joyful singing voice and her talents in baking, in addition to her work with the Red Cross and Homestead Savings.

Schenck’s efforts made Middletown’s Red Cross office, housed in borough hall, more than a typical Red Cross office. While the agency typically focuses on providing disaster relief, support for military families, a sizable share of the nation’s blood supplies and health and safety courses, Schenck provided much more for Middletown’s residents: She developed a cadre of supporters who could help a family in need with a variety of services, whether they needed baby formula, clothing, home heating oil or a tank full of gas.

“Nancy always knew someone who could help,” said Judy Oxenford, a friend and the mayor of Royalton. Over the years, Oxenford said she contacted Schenck many times on behalf of families with trying circumstances ranging from fires that destroyed their homes to those who needed a food voucher because they ran short of cash prior to payday.

“Nancy was a miracle, and she was so devoted to the people of Royalton and Middletown,” Oxenford said. “You could interview 50 people and they would all have something good and nice to say about her.”

Former Middletown mayor Robert G. Reid agreed. He served on the board of the Middletown Red Cross office and directed many families to Schenck when they had needs.

“It was just amazing what she did in helping her fellow man,” Reid said. “I saw her action numerous times. She was always there, helping.”

Nancy Taxweiler, who worked with Schenck at Homestead Savings in Middletown, said Schenck’s many years of experience at the bank and her connections through her church, Wesley United Methodist Church on Ann Street, enabled her to garner community support to make the Red Cross’ Middletown office strong.

“Nancy always took care of everyone who came in the office,” Taxweiler said. “Many times she went out of her way to the extreme to help people out.”

Schenck served the Red Cross in Middletown from 1995 to 2011, when the office closed and she was moved to Harrisburg. Taxweiler said the move was crippling because the distance prevented those without cars from being able to stop in the local office and request assistance. “We could help them faster in Middletown,” she said.

When Schenck was in Middletown, “She saw that anything that could be done for the people of the town was done,” Taxweiler said. “People have missed her since she retired, since the chapter moved out,” Reid said. Schenck retired from the Red Cross in February 2014, after working in the Harrisburg office for three years.

“Her commitment to community service has been unwavering,” said Pastor Jim Dawes of Wesley United Methodist Church, who presided over a memorial service for Schenck on Monday, July 27 at the church. “Nan knew the art of neighboring.”

Dawes said Schenck went far beyond how many people view their duty as neighbors, from the love she showed to so many people she encountered through the community for many years, and that “neighboring” extended far beyond this service to simply the love she shared.

“She is one of the most sincere and authentic people I have ever known,” Dawes said.


Last Updated on Tuesday, 28 July 2015 16:09

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Father, son charged with impersonating cops


A Lower Swatara Twp. man and his son were charged with impersonating a police officer for allegedly entering and rummaging through a township home on June 22 while claiming to be looking for someone, according to Lower Swatara police.sonphoto7 29 15WEBDillon Arnold

Ray M. Arnold Jr., 56, and his son, Dillon J. Arnold, 22, both of the 100 block of Eby Lane, entered a home in the 100 block of Lake Dr. around 5 a.m. claiming they were cops looking for an individual they believed was there, police said.

One was brandishing a baseball bat, police said. The Arnolds caused about $1,000 worth of damage to the residence, police said.

Ray Arnold was charged with impersonating a public servant, burglary, criminal trespass, disorderly conduct, criminal mischief and making, repairing or selling offensive weapons, police said. Dillon Arnold was charged with impersonating a public servant, burglary, criminal trespass, disorderly conduct and criminal mischief, police said.

They were arraigned before District Judge Steven Semic on Thursday, July 16 and held in Dauphin County Prison in lieu of $10,000 bond.

A preliminary hearing for the two is set for Wednesday, Aug. 12 before District Judge Michael Smith.

fatherphoto7 29 15WEBRay Arnold






Last Updated on Tuesday, 28 July 2015 15:59

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Who are these guys and what do they want?


flagguys7 29 15WEBPress And Journal Photo by Jim Lewis -- Tattered Flag partners Ben Ramsey, left in insert, and Matt Fritz say their brewery and distillery proposed for the Eliks Building, pictured, will be a unique regional attraction.

The proposed craft brewery/distillery/brew pub that Tattered Flag wants to open in the Elks Building in Middletown would be a regional attraction unlike anything else in south-central Pennsylvania – or on the East Coast, two of the four Tattered Flag partners told the Press And Journal on Friday, July 24.

While partners Ben Ramsey and Matt Fritz said that there will be “nothing else like it,’’ they did not get more specific in an interview at the Press And Journal’s office on Friday, saying they feared that competitors might steal some of their ideas if details were released now.

“Tattered Flag is designed to be an attraction that highlights what is good about south-central Pennsylvania,” Ramsey said. “You can do everything from take the family out for a meal, come out and get a drink, come out and get a tour and see how beer is made, how whiskey is made. We will have a venue area where we want to highlight the personalities, celebrities, and people of this area.”

Tattered Flag would also be the first “truly co-branded co-located” combined craft brewery and craft distillery operation in the greater Harrisburg region, Fritz said. “You can’t find that anywhere else.”

The venue would offer an area set up “exclusively” for Penn State Harrisburg students, including those not of drinking age, Fritz said. “It’s going to bring the university to the heart of Middletown. That’s good for us, and all the surrounding businesses.” Finally, Tattered Flag would provide opportunities for “passionate experts and novices” alike to get as close as they can to the operations of craft brewing and distilling, Fritz said.

Until now, little regarding Tattered Flag and what it wants to do in the Elks Building had been revealed to the public since the plan surfaced in May.

Tattered Flag’s Web site – – provides no real information regarding what track record the partnership has in brewing and distilling, or in running a restaurant/events venue such as the partners have described.

Part of the reason for that, according to Ramsey, is that Tattered Flag doesn’t want competitors to know its plans. At the same time, Tattered Flag has to put out enough information to satisfy the public – and decision-makers like Middletown Borough Council – for people to be on board supporting a plan that depends on the borough loaning Tattered Flag $1.5 million.

“Nobody’s trying to be secret,” Ramsey said. “We have every intention in the world of being transparent, but we want to bring the best situation in here with us, and for us to do that we want to have something when we open that there is nothing else like it.” The $1.5 million would be from the $43 million one-time payment that Middletown received from United Water on Jan. 1 in return for Middletown leasing its water and sewer systems to United Water for 50 years.

A portion of this money was transferred earlier this year from the Middletown Water and Sewer Authority to the Middletown Industrial and Commercial Development Authority, which acquired the Elks Building in 2014.

The $1.5 million would cover the estimated cost to retrofit the 104-year-old Elks Building to make it suitable to house the Tattered Flag operation. Of the $1.5 million, $400,000 could consist of financing a lease-to-own arrangement where Tattered Flag would purchase the building, Middletown Borough Councilor Ben Kapenstein told the Press And Journal on Friday.

On Tuesday, July 28, the authority was to consider approval of a long-term lease of the Elks Building to Tattered Flag. The lease would be structured in such a way that the authority – over a period of years specified in the agreement – would recoup the $1.5 million loan to Tattered Flag.

Fritz and Ramsey would not discuss specific financial aspects of the proposed lease deal before Tuesday’s ICDA meeting. “Acquiring (the) building is one of the things we are talking about,” Ramsey said. He pledged that the historic Elks Theatre would operate as a separate entity under ownership “independent” of Tattered Flag.

The authority months ago received a proposal from Phantom Theatre Company to turn The Elks Building into a regional performing arts center. It is expected that the authority will receive at least one other proposal from another group regarding the future of the theater between now and Tuesday, Aug. 4, the deadline for submitting proposals.

On July 20, Middletown Borough Council approved a motion by a 5-1 vote that any proposed expenditure of the remaining funds from the $43 million United Water payout be subject to council approval.

Most of the $43 million is already committed to paying off borough debt and funding projects like the replacement of water and sewer lines under Main Street.

Council’s July 20 action would make the ICDA’s decision to loan the $1.5 million to Tattered Flag subject to council approval. Council could vote on a deal with Tattered Flag on Monday, Aug. 3.

Tattered Flag is not coming to the table empty-handed, the partners told the Press And Journal.

Tattered Flag has qualified for a bank loan through the Federal Small Business Administration. However, Tattered Flag has until Tuesday, Aug. 4, to produce “a binding agreement” toward obtaining a property in which to locate the proposed business, Fritz said. The SBA will not grant Tattered Flag any more extensions on the current loan application, he added.

Tattered Flag has other financial assets to bring to the deal, although neither Fritz nor Ramsey would provide specifics. “We are fully funded,” Fritz said. “We had two separate rounds of investment that were satisfied and we have personal equity in the company as well.”

Ramsey is an owner of three Meineke automobile repair franchises in the region. He and his partnership are opening a fourth Meineke franchise in the region, while a fifth is being “teed up” to open in the next six months or so, Ramsey told the Press And Journal.

The Meineke stores have raised funds for entitles like Children’s Miracle Network, Toys for Tots, veterans organizations and missions through promotional activities held in concert with area radio stations, Ramsey said. These fundraising efforts would be part of the Tattered Flag business model at the Elks Building, Ramsey said.

Ramsey and Fritz grew up in Perry County. The two have memories of coming to the Elks Theatre with their parents to see movies for $1.

Fritiz has a background in real estate and owns a marketing company, Ramsey said.

The other two partners are Pat Devlin and Tony DeLellis. DeLellis is a life-long central Pennsylvania resident who earned degrees in elementary education and religious studies from Elizabethtown College, according to the Tattered Flag Web site.

DeLellis taught for a period of time and went on to build a successful career in the mortgage industry. He is also a regional church planter, Ramsey said.

Devlin, a central Pennsylvania native and Penn State graduate, is a veteran of 10 years in the Navy who has received the Purple Heart and the Bronze Star with valor, Ramsey said. Devlin has been brewing and distilling for six months, Ramsey said.

“He is a huge craft beer and craft distillery” enthusiast, Ramsey said of Devlin. “It’s something he is really passionate about.”

Until now, the public has only known what Tattered Flag doesn’t have - it doesn’t have it’s own recognized name-brand product, such as other well-known regional breweries like Troegs and Appalachian Brewing Company, to name a few. Tattered Flag doesn’t have a place it can point to where its product is being made.

While still hesitant to provide much in the way of details, Ramsey did talk about what Tattered Flag does have.

Tattered Flag has two brewers who will be part of the Elks Building deal, Ramsey said. The two have a combined 20 years’ brewing experience, and have been brewing with Tattered Flag for six months.

One of the brewers also works for “a very well-known competitor” whom Ramsey would not name.

Tattered Flag has seven beers it is now brewing, all “very much local themed,” Ramsey said. The beers run the gamut from darks to lights and lagers.

Tattered Flag is capable of doing a lot more, Ramsey said. “We can produce a new beer every week or two, that is completely unique to the other beers,” he said.

The Tattered Flag partners have gone to classes in Kentucky, Tennessee and throughout the northeast to obtain certifications in craft brewing and distilling.

The partnership is also trying to get into some beer festivals in August to get its product out to the public. Ramsey said he could not identify any of the festivals until Tattered Flag knows it has been accepted to appear in them.

Tattered Flag doesn’t need a liquor license to sell its own beer, Ramsey said. However, the company needs federal approval to operate the distillery.

Tattered Flag will need a brewery license, a distillery license and a brew pub license to support the operations in the Elks Building. The company has gone as far as possible to obtain the necessary state and federal approvals without having agreement on a property, Fritz said.

“We have a strong product that has been worked on for a long period of time and that we have been developing,” Ramsey said. “This property (the Elks) is really one of the last pieces of the puzzle.”

Not all four members of the partnership need be intimately involved in hands-on brewing and distilling for Tattered Flag to succeed, the two men said.

“You don’t need to be a chef to run a successful restaurant,” Fritz said.

“If you try and rely on yourself to do every aspect of your business, you can’t really grow,” Ramsey said. “You need to know how to surround yourself with good, qualified people, and that’s what we’ve done.”

“It is an exception to the rule to have the owner of a professional sports team be a good athlete,” Ramsey added. It’s more important to “manage and make sure you find the appropriate people,” he said.


Last Updated on Tuesday, 28 July 2015 15:49

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Public meeting of ICDA cancelled; Tattered Flag plans were to be presented

webelks7 29 15

The Middletown Industrial and Commercial Development Authority has cancelled a meeting it had planned for Tuesday, July 28, where partners of Tattered Flag Brewery & Still Works planned to present to the public their proposal to build a brewery in part of the Elks Building.

The authority notified the Press And Journal of the cancellation by e-mail around 2:30 p.m. on Tuesday.

Calls to Matt Tunnell, the authority's chairman, and Sal Bauccio, the authority's solicitor, were not immediately returned Tuesday.

Tattered Flag's partners had told the Press And Journal that they planned to present their proposed brewery, distillery and brew pub project to the authority at the meeting. The meeting was to be held in the MCSO Building.

The partners posted this message Tuesday morning on their Facebook page:  "We are excited to meet you all tonight at 7:30 at Borough Hall in Middletown.''

Little regarding Tattered Flag's plans for the Elks Building had been revealed to the public since the potential project surfaced in May.

Partner Ben Ramsey told the Press And Journal on Friday, July 24 that the brewery/distillery would be "an attraction that highlights what is good about south-central Pennsylvania.'' Partners couldn't reveal more specific details until Tuesday's meeting, fearing a competitor might steal some of their ideas if details were released too soon.

"Nobody's trying to be secret,'' Ramsey said. "We have every intention in the world of being transparent, but we want to bring the best situation in her with us, and for us to do that we want to have something when we open that there is nothing else like it.''

Tattered Flag has qualified for a bank loan through the Small Business Administration – however, it has until Tuesday, Aug. 4 to produce to the Small Business Administration "a binding agreement'' toward obtaining a property in which to locate its proposed business, according to Matt Fritz, another partner. 

For more information on Tattered Flag's plans, read our story in the Wednesday, July 29 edition of the Press And Journal.


Last Updated on Tuesday, 28 July 2015 16:22

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