WILMERDING, Pa.—The tiny business district here includes a Dollar General store, a body-piercing parlor and a convenience shop whose front window displays pictures of shoplifting suspects.  "There's nothing to draw people here," Dominic Parisi, the 90-year-old mayor of Wilmerding, lamented one recent afternoon over lasagna at Johnny's restaurant. "Except the castle."  The castle, as it is known here, looms incongruously over this town of 2,200 in the Turtle Creek Valley, a deep gouge in the Allegheny foothills about 15 miles east of Pittsburgh. The five-story sandstone building, listed in the National Register of Historic Places, was erected in the 1890s as the headquarters of Westinghouse Air Brake Co., a maker of train equipment founded by George Westinghouse, inventor of the air brake and a pioneer in electricity. The octagonal clock tower still chimes every 30 minutes.  The castle imparts a "baronial feel of weight, importance and permanence" to what might have been just another factory town, said Diane Shaw, an associate professor of architecture at Carnegie Mellon University, who calls the style Medieval Revival.  Most days, though, the castle is padlocked. Tours are by appointment only. The local nonprofit that owns the castle has turned off the water and gas to save money. Weeds choke the gardens. Plastic barrels in the attic catch some of the rainwater that seeps through the steeply sloping slate roof.  Past efforts to save the castle, involving Elvis impersonators and ghosts, have fallen short.  Like the castle, Wilmerding has seen better days. Most of its factory jobs are gone. Median household income, at about $20,800, is 60% below the national level. Even so, John Graf, a Pittsburgh entrepreneur, has proposed to buy the castle and turn it into a luxury hotel. That plan hinges on whether he can raise $11 million to buy and renovate the leaky, creaky structure.  Tom Setz, sitting alone at the U-shaped bar in his Wilmerding restaurant, the Station Brake Café, a few hundred yards from the castle, said the hotel plan seems worth a try. "We don't have a lot of problems," he said of Wilmerding. "We just don't have a lot of commerce. A lot of people got older."  Wilmerding, named for the wife of a local landowner, was born when Mr. Westinghouse (1846-1914) bought farmland in the late 1880s to set up an office building and a factory. Modest houses went up for the workers, and larger ones for managers. Marguerite Avenue, on a hillside behind the castle, was named for Mr. Westinghouse's wife.  The planners avoided "barracks and monotonous rows of operatives' houses," according to Henry G. Prout's biography of Mr. Westinghouse. The company held contests for the best gardens and lawns. "Thus," Mr. Prout wrote, "the little town has become a focus of taste in a commonplace and even dreary region."  Known as a compassionate employer, Mr. Westinghouse provided a separate factory lunchroom for women, with tablecloths. Prince Albert of Belgium, eager to learn about the Westinghouse business empire, toured Wilmerding in 1898.  Employment at the brake factory, now run by Wabtec Corp. WAB 0.44 % , peaked at more than 4,000 in the 1940s and has since dwindled to about 350. Wilmerding Renewed Inc., a local nonprofit, acquired the castle in 2006 and had high hopes for a revival.  Tenants, including a funeral directors association, moved into some of the offices. A historical society opened a tea and gift shop on the ground floor, offering $3 refrigerator magnets with pictures of the clock tower. To raise money, the nonprofit rented out the castle for weddings and brought in entertainers, including Elvis Presley mimics.  "They were so good, believe me," said Geraldine Homitz, a retired beautician and former mayor who serves as the castle's volunteer caretaker. Still, she said, "no matter how much money you made, it was never enough." Just paying for utilities and maintenance cost $10,000 a month.  For several years, at Halloween, part of the castle was turned into a "Spooky Vault" featuring a casket that opened when guests approached. That theme seemed appropriate because the castle was rumored to be haunted.  "I never heard anything or saw anything, but a lot of people have," said Ms. Homitz. Three years ago, she allowed the Pittsburgh Paranormal Society to investigate.  Shawn Kelly, the society's lead spiritual investigator, is foggy about the details of his castle tour: "That was so long ago, dude," he said. But Ms. Homitz recalled being told by the spiritual gumshoes that the castle was "a hotbed for ghosts." The theory, she said, was that "these people who used to work here, they think they still work here." She hoped the spiritual angle would lure tourists. That didn't happen.  "Maybe we should just stick with George Westinghouse," whose artifacts are still displayed in the castle, Ms. Homitz concluded.  In late 2010, an overflowing toilet flooded the building, forcing the remaining tenants out. Now paint is peeling, and mold speckles the carpet. A musty smell has permeated the dim corridors since the dehumidifier broke down. The oak-paneled offices, with walk-in fireplaces and transoms over the doors, were built for another era, when men in stiff collars dictated letters to secretaries.  A hotel is the best and perhaps only option, Ms. Homitz said. But what would hotel guests find to do in Wilmerding?  "That is a good question," Mayor Parisi said. He shook his head. "Nothing. I'm sorry to say that." But, Mr. Parisi added, Wilmerding remains "a nice, nice town."  Mr. Graf, the Pittsburgh hotel operator who has proposed to buy and restore the castle, acknowledged that Wilmerding's charms are faded but said the castle, if renovated, "creates its own destination." He would offer billiards, croquet and lawn bowling for people seeking a romantic weekend in Wilmerding. Buses could shuttle guests to downtown Pittsburgh—or to the nearby Monroeville mall.  If the hotel project succeeds, Wilmerding still will need some spiffing up. Ms. Homitz hopes someone will buy a vacant building next to the castle—a former public school, which is on the market for $449,900. "I was thinking an indoor mall or something," she said.  Write to James R. Hagerty at bob.hagerty@wsj.com
Some in a tiny Pennsylvania town are hoping the restoration of the historic Westinghouse Air Brake headquarters can help revive the community.