Former state prison in Hempfield scheduled for sheriff's sale

A former state prison in Hempfield is scheduled to be sold at a Westmoreland County Sheriff’s sale on Sept. 7 as part of a mortgage foreclosure seeking payment of $5.6 million.

The sheriff’s sale notice is the most recent chapter in the ongoing saga of the former prison located on 96 acres along Route 119. The structure has been empty since the state closed the 900-bed facility in 2013.

In February 2015, the state sold the prison property to Carlisle businessman David Goldsmith.

Goldsmith, who previously had done business with the state, actually made money on the transaction.

The businessman had built a steam energy plant at the prison and had a contract to provide electricity to the facility through 2024. In an arrangement that raised questions with state and local officials, he collected $7.6 million under the terms of the agreement that required the state to buy out his contract if it was terminated before the expiration date.

Goldsmith promptly titled the prison property to Verdant Holdings LLC and touted plans to build a $150 million veterans center there.

That plan never materialized. But several years later, Goldsmith mortgaged the property for $5 million.

The current sheriff’s sale listing cites a mortgage foreclosure by Midwest Bank of Detroit Lakes, Minn., filed against Verdant Holdings in October 2018, seeking payment for the note due May 16, 2018.

That Midwest deal also appears to be at the heart of a complex civil case the bank filed against Goldsmith in U.S. District Court in Harrisburg. That case is scheduled to go to trial this fall.

Although the prison property has been scheduled for sheriff’s sale several times over the past two years, the matter has been postponed repeatedly.

Attorneys for Goldsmith and Midwest did not immediately return calls for comment.