The Fineview Citizens Council's Nunnery Hill project to build seven single-family homes has been stymied since the general contractor abandoned the job in May, with subcontractors now pressing the community group for payment.

Doing business as Angel Contracting, John Castellano was awarded the project two years ago with a bid of $1.06 million.

On May 11, his then-attorney, Shawn Wright, informed the council by letter that "Angel Contracting is no longer in a financial position to complete the Nunnery Hill project." The letter also stated that Angel was "unable to obtain credit with its vendors and subcontractors."

The council's development committee chairman, Wayne Madden, said Angel Contracting was paid each month as work progressed and that the challenge now is to deal with having to pay out even more -- to subcontractors if their claims are upheld, and to a new contractor to finish the work.

Kim Graziani of the Northside Leadership Conference, who manages the Fineview project for the citizens council, said that Castellano abandoned another job in Observatory Hill at about the same time. That project, which is about 95 percent complete, will provide three new homes and rehabilitation of three other buildings.

Castellano said both jobs were costing more than the councils were willing to pay him. "There were constant issues" on both jobs, including sewer lines that had to be replaced, he said.

Delays held up the Fineview job for about seven months after it was bid, he said, and by then, costs had gone up. "I wanted to rebid," he said, "but they said, 'You signed a contract, you need to honor it.' I said, 'It's going to wipe me out.'"

He and the Urban Redevelopment Authority disagree on that point. Tom Cummings, director of housing for the URA, said Angel was given the chance to rebid near the time of closing in April 2004 and declined. Angel had been the low bidder.

Soon after his attorney wrote the letter to Fineview Citizens Council, Castellano dissolved Angel.

The council sought the help of Regional Housing Legal Services to respond to subcontractors demanding payment and to consider action against Castellano, who said he paid his subcontractors.

"I cannot comment on whether Angel paid its subs or not," said Graziani. "We pay the contractor and the contractor is in charge of his subs."

The council does acknowledge that costs were incurred between the last invoice in April and Castellano's departure from the project; some subcontractors delivered materials after he left.

One subcontractor, Cassady Pierce, is going after the Fine-view council for almost $16,000. David Abrams, attorney for the roofing and siding supplier, said mechanics' liens were filed on five of the houses on Aug. 10; the other two houses are still mere foundations.

Akela Vance, a consultant for the Fineview council, confirmed the liens were served.

The council believes it is protected by a no-lien waiver, but Abrams said the council's agreement is with Angel Contracting while his client "dealt with another contractor, John Castellano." Even though they are one and the same, he said, they may be separate entities by law.

One protection Fineview has is a retainage fee a customer holds against a contractor in case he walks off a job, said Cummings. "The danger is that each time you have to get a new contractor, there are higher costs and cost overruns."

Cummings said it is rare for a contractor to abandon a neighborhood development project. The same contractor abandoning two ongoing projects is alarming, he said. What's more, he said, Angel Contracting had worked on several URA-financed projects to the authority's satisfaction. "He had a good track record," Cummings said.

The Nunnery Hill project garnered financial support from Citizens and Sky banks, the Pennsylvania Department of Community and Economic Development and the URA.

In the 1900 block of Meadville Street, Nunnery Hill -- named for the site of a young women's academy operated by Flemish nuns in the 1830s -- is the Fine-view Citizens Council's third housing development in the past decade. The first two provided more than 20 new homes and two rehabilitations of old structures.