Lancaster City officials are expected to start over with requesting proposals from developers to renovate the long-vacant building at North Prince and West Lemon streets. A draft proposal request could be presented to council members at their next meeting in two weeks.

Mayor Rick Gray promised the proposal request would be more extensive than the one put out by former Mayor Charlie Smithgall’s administration last fall.

“It will be closer to the questions we asked Mr. Eng in the conditions of sale,” Gray said Tuesday evening, soon after council members heard Gray’s recommendation to reject the proposal to sell the building to New York real estate developer Harry Eng.

Eng had proposed spending as much as $200 million to renovate the Lancaster Press building, add two floors and construct two adjacent 21-story condominium and commercial towers.

Council members, agreeing the proposal process was rushed, voted to reject the bids in January and authorized the mayor to negotiate the sale with Eng.

But Gray said the more than 100 pages of documents supplied by the developer still failed to answer two simple questions: what other projects has he done and does he have the money?

Despite Eng’s involvement in real estate development for three decades, Gray found no projects that Eng had done on the same scope as what he proposed here.

Information Eng provided showed he had been a “development consultant,” but did not indicate his level of involvement, Gray said.

“Mr. Eng has failed to produce any credible evidence that he has experience as the developer of record on any project,” Gray said.

The financial question led the mayor and his aides on a stranger path.

Patrick Hopkins, Gray’s administrative services director, and Pat Brogan, the mayor’s chief of staff, found that the man listed as Eng’s partner, Kevin T. Gleaton, a former vice president of a North Carolina commercial lender, had his license as a loan officer in that state suspended last month for altering a bank letter to help a customer secure a loan.

Gleaton was listed as Eng’s principal financier for the Lancaster project. The address for his Bond Street Capital company was that of his home. And Gleaton’s wealth was reportedly tied to his ownership of unmined onyx underground in Yavapai County, Ariz.

A geologist placed a value on the onyx of nearly $2.7 billion. Yet, Hopkins and Brogan found the geologist, Sam Arbuthnot, had been rejected for a license by the California Board of Geologists six months before assessing the value of Gleaton’s mine. In fact, Arbuthnot had been cited by California in 2003 “for unlicensed practice of geology,” Gray said.

“Frankly, the information received by the city is so lacking in verifiable details that a bank would never accept it for financing a home much less a major project,” Gray told council members.

The mayor also said letters Eng had included from development companies did not indicate they were partners in his development team. Rather, the mayor said, they were solicitation letters from companies indicating they were capable of doing a development on the scale Eng proposed.

“As we proceeded through this process, I felt more and more uneasy about who and what we were dealing with,” Gray told council members.

“From over 30 years of work as an attorney, I know the difference between fact and fluff, figures and fantasy. The discovery of Mr. Eng’s felony conviction further raised questions about his candor,” said Gray, referring to last week’s revelation that Eng had served eight years in prison after pleading guilty to drug charges.

Gray’s report was praised by City Council members, particularly those who had been asked by the Smithgall administration to approve the building sale to Eng in December.

“Thank you for your due diligence,” Councilman John Graupera said. “Those of us who have been on on council for a while aren’t used to this type of information. I’m a bit taken aback by all of this.”

Eng did not return a call for comment this morning. Efforts to reach Gleaton and Arbuthnot this morning were not successful.

Also on Tuesday, council members approved the city’s application for nearly $1.3 million in five grant applications to the state’s Elm Street program.

If received, grants would fund facade improvement loans and street lighting in the James Street Improvement District, in the city’s northwest area, and handicapped curb ramps in southwest Lancaster. In the southeast, grant funds administered by the Inner City Group would renovate to a Crispus Attucks Community Center building and pay for a loan program to make commercial buildings handicapped-accessible.

Elm Street applications totaling $650,000 for the northwest and southeast areas were funded by the state last year.

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