Daily News from New York, New York • 29

City's low home-loan plan needs rebuilding By MARTIN GOTTLIEB. At a time when home-improvement loans have become prohibitively expensive for tens of thousands of lower-and -middle-class New Yorkers, the city's low-interest loan program for small homes is mired in bureaucratic snags that have left it crippled. Despite the fact that the federal government has already reclaimed nearly half the funds it gave the city this year forthe program $3.2 million the Department of Housing Preservation and Development is still unable to hand out the money at anything near the levels it set for itself, managing to award only 12 loans in September and nine in the first half of October. When city officials discussed the shortcomings of the pro-gram with a reporter two months ago, they vowed that 35 loans would be awarded in September and 50 in October. The bottleneck has created a backlog of loan outpuLof loans does not pick up "we have to consider whether we want to be in the program at all." Assistant Commissioner Jeffrey Heintz, who responsibility for the program, says the 50-Ioan a-month level should be reached by December.

"It was our sense a few months ago that the pieces were falling together," he said. "We're still missing a piece or two. It didn't happen with the bang we thought it would." Basically, the program is still suffering from prob-' lems of overlapping, cumbersome bureaucratic processing. Federal officials, as well as one from what is said to be a model Section 312 program run in Poughkeepsie, have been called in for advice. The feds want to put together a package of 50 loans in abandoned buildings in South Ozone Park.

But, as of now, the hope that the rebuilding of Pine St gave homeowners in the city is not being realized. Because of the backlog, new applications for loans are not being encouraged. applications as the interest rate on private improvement loans has gone as high as 12. Under the federally financed plan, called the Section 312 program, the consumer pays only 3 interest. The difference in cost on a loan of $27,000 the limit per unit of housing under the program is in the thousands of dollars.

A delay on applications Making the delays particularly irksome is the fact that the program, in its first widespread application in New York, was used to finance the reconstruction of Brooklyn's fire-ravaged Pine St. in record-breaking time, leading Deputy -Mayor Nathan Leventhal, then the city's housing commissioner, to intensify the loan program and predict that it would be of great use to small homeowners all over the city. Laventhal's successor as housing commissioner, Anthony Gliedman, sees the program as one in need of almost immediate improvement and says that if the IFSccadlDODy: Lvlo saOe ffoir iraew Enottell "n- Mini I Jl0f yJ LI fsr-TY ri) illiiiM By OWEN MORITZ Owners of the midtown Piccadilly Hotel, having already turned down a $2 million offer, insisted yesterday they will not sell their property under any circumstances to make way for a $280 million luxury hotel backed by the Koch administration. If the hotel owners hold to their vow, it will set back and perhaps jeopardize the administration's plan to use the hotel as a centerpiece for its Times Square urban renewal plan. The Piccadilly, a 532-bed budget hotel $30 a night catering mainly to foreign tourists, at 227 W.

45th St. is due to come down along with three legitimate theaters for the futuristic Portman Hotel. But Piccadilly manager Francis X. Brown says: "The Piccadilly is not closing and we are not selling out to John Portman or to anyone else involved in the planning of the Portman Hotel. We are continuing the renovation which was started in 1977 when the Piccadilly was purchased by its new owners.

Since that time, more than one and half million dollars has been spent on renovations." The hotel manager, after consulting with former Deputy Mayor John Zuccotti, is reported to have told Portman interests from Atlanta that the Piccadilly's owners are not selling. Because the hotel planned for Broadway, between 45th and 46th constitutes an urban redevelopment project, the state Urban Development Corp. can still acquire the hotel through condemnation, but that could involve a time- -consuming law suit. The hotel, on the drawing boards for Dan News p. efvna Members of the Black and Latino Coalition Against Police Brutality WCIffCj drUfftC; demonstrate in front of the Municipal Building at Chambers and Centre Sts.

yesterday. The group was protesting the alleged increase in the use of deadly force against unarmed civilians by police officers in the line of duty. B'klyn support of hotel is seen almost a decade, is said to be awaiting only a $15 million federal grant before work starts. Sale of three theaters, including the Morosco and Helen Hayes, is said to be no problem, despite a lawsuit to block the Helen Hayes sale on grounds it should be declared a city landmark. Says manager Brown: "The Piccadilly provides a unique service in that we give our clients a good clean room in a safe and well-managed hotel for less than $32 a night The proposed Portman Hotel will cost at least $100 a night." 350-unit, first-class hotel in its downtown section, but it points out that a luxury hotel with large banquet facilities probably would not be feasible until 1936.

A first-class hotel would charge about $50 a night, a luxury hotel in the $7100 range. Bob Kappstatter A new hotel may grow soon in Brooklyn, but it won't be the luxury hotel that Borough President Howard Golden wants. A report prepared for the city's Office of Economic Development by Laventhol Horwath, a consultant firm, and officially released yesterday says that Brooklyn could support a Teaching Holocaust, so young will know 55 yi as was Insisting that teachers and administrators make clear to publishers that textbooks are "incomplete if they ignore the Holocaust." The push to make the Holocaust an integral part of the curriculum has come from various sources in recent years, including the Anti-Defamation League of B'nai B'rith and the United Federation of Teachers, which were among the sponsors of the conference. But the highly sensitive nature of the subject matter is the reason a series of workshops were planned to give teachers the techniques they can use to convey the Holocaust experience. Says all should learn McCarthy feels that more knowledge about the Holocaust is especially needed in Ridgewood, where he says there has been an upsurge in pro-Nazi feeling in recent months.

And he plans to put the new curriculum into effect in his classes. "I had one parent, a veteran of the German Army in World War II, thank me for teaching his child about what happened during the Holocaust" McCar-' thy said. "He said there were a lot of things he didn't even know about He finally realized he'd been a victim of the Holocaust, too, because he lost his youth serving in the German Army." school administrators who want to learn how to teach students about the Holocaust The conference, which drew about 200 participants at the City University Graduate Center at 33 W. 42d St, celebrated the Board of Education's distribution this fall of a new Holocaust curriculum designed to integrate study of the Nazi era into the regular social studies program. The materials consist of lessons that teachers can use in the classroom.

Declaring that schools have an obligation to teach not just reading and writing basics, but also "the basic lessons of morality," Schools Chancellor Frank Macchiarola told the conference that the Holocaust teaches both a "universal" and a "personal lesson." It teaches what can happen anywhere in the world when we lose our sense of justice, our capacity to see humans as human beings," Macchiarola said. Intensified feelings "It also explains some of the very strong feelings that Jewish people have about human liberties, and that sensitivity has got to be part of the school system." Charging that there is a tendency for schools to "sugar the Holocaust "because it is a very tough part of history to teach," Macchiarola said he By SHERYL MCCARTHY To look at Matthew McCarthy, a robust, merry-eyed, third-generation Irish-American, is to know that it is unlikely that any of his relatives suffered the horrors of Auschwitz or Treblinka those infamous concen-tion camps that have come to symbolize the Nazi persecution of the Jews. But Jn the 22 years he has been a city public school teacher, McCarthy has made teaching about the World War II Holocaust a part of his social studies classes. Sometimes the response is startling. "You start talking about the Holocaust and the students laugh," says McCarthy, who teaches at Grover Cleveland High School in Ridgewood, Queens, where most of his students are of German and East European descent "They say: 'That happened to someone else.

But when you point out that the Germans were also victims of the Holocaust, that everyone was a victim, they begin to listen." McCarthy's belief that everyone can learn important lessons from the Holocaust is the reason he attended a conference, recently, for teachers and to.