By Staff
No confirmation whether entirety of for-profit’s suit settlement will pay off loan
By EUGENE L. TINKLEPAUGH
Staff Writer
BELHAVEN — The full amount of a lawsuit settlement awarded to two local nonprofit boosters was turned over to the state to pay back an emergency loan that was given to this town to salvage a $1 million investment.
But state officials aren’t saying whether the partial repayment will forgive Belhaven’s debt.
At the town’s March meeting, the council unanimously approved a budget amendment that forwards the Wynne View settlement to the state Division of Community Assistance, an amount of $125,000.
Deborah Barnes with the Department of Commerce confirmed Wednesday that the town did send a check for $125,000 and that DCA, a division of the state’s Commerce department, has received it.
When asked if that settles up the town’s debt, Barnes said, “I’m not prepared to comment on that.”
O’Neal said the budget amendment was passed because it was clear any money from the settlement had to go to the state.
He wasn’t sure whether that payment would forgive the remaining $360,000 left on the emergency loan.
Wynne View Inc. — jointly owned by Northeastern Beaufort County Economic Developers and Community Developers of Beaufort-Hyde — was awarded a $125,000 settlement for its faulty-construction grievance against the project engineer and architect of the Wynne View building. The settled figure is just about one-fourth of the state loan that went to pay for the structural repairs needed on the Wynne View building when its foundation began to give.
The state granted a $485,000 emergency loan to Belhaven to rescue the building paid for with nearly $1 million in state grants.
Barnes indicated in an earlier interview that the entire loan was to be paid back under the state’s original agreement with the town. In previous council discussions of the loan, some town officials and representatives of the nonprofit entities believed the town would be exempt from paying back a portion of the loan, to the tune of $100,000. Barnes said she did not have that understanding of the state’s financial agreement with the town.
The state and town have been negotiating repayment “because of extenuating circumstances,” Barnes said, which may result in the final amount differing from the amount loaned.
Negotiations between the town and the state reportedly centered around how much had to be repaid since the settlement did not exceed the amount loaned to repair the building.
Dr. Charles Boyette, chairman of the Wynne View board, has said the corporation has been in a funding crisis brought on by mounting legal fees and the shoddy construction that resulted in the lawsuit.
The building was paid for with an entrepreneurial empowerment grant. When the structure began settling, it was discovered the foundation would not hold, and the building faced being condemned.
The current councilman and former mayor fought to save the structure. Through his and the town council’s efforts, a loan was secured through the state Division of Community Assistance, a branch of the Department of Commerce, to reconstruct the foundation and salvage the $1 million investment.
At the December town council meeting, Boyette pitched to his counterparts that the Wynne View property be put on the market and any profit made from the sale of the building be reinvested to spur on other economic development projects in Belhaven.
More than a decade ago, construction on the Wynne View building began under the direction of NEBCED.
Wynne View was part of a three-pronged project meant to spur development and provide a sustainable source of income to the nonprofit group so that it could continue other economic projects in the northeast region of the county.
The funds to construct Wynne View came from an entrepreneurial empowerment grant through the state’s Community Development Block Grant program. The grant was approved in 1995 for $999,994, according to information Boyette provided to the Daily News.
In 1997, NEBCED sought the assistance of another area booster when the project ran into financial difficulties. Community Developers of Beaufort-Hyde, also a nonprofit, teamed up with NEBCED on the Wynne View project, and the two entities established a jointly-owned for-profit corporation, Wynne View Inc.
Under the agreement of the two nonprofits, NEBCED would own 51 percent of the for-profit and CDBH would own the remaining 49 percent.