Metropolitan Housing & Development Corp. and the City of Washington are trying to resolve a dispute over $238,000 the city contends Metropolitan owes it.

The city, in an April 4 letter to the Rev. David Moore, CEO of Metropolitan, asked the nonprofit organization to reimburse it because the city had to pay back the state some grant money related to the Keys Landing residential project. Because the project, revised and extended several times during about a dozen years, did not meet all of the grant requirements, the city was required to pay the $175,000 clawback.

The city wants Metropolitan to reimburse it that clawback amount, plus $63,000 that the city lent Metropolitan to help move the Keys Landing project along. The city says it has a promissory note and a “legally binding commitment” that requires Metropolitan to reimburse the city. Overall, the city contributed $90,000 to the Keys Landing project

Moore, referencing the April 4 letter asking for that reimbursement, said he believes he is being “treated like a criminal” and considers the letter an “insult.” Moore challenges the letter’s assertion Metropolitan owes the city $238,000. “This letter is unacceptable,” he told the City Council during its meeting Monday.

“We’ve never defaulted on a loan. We never will,” Moore said.

If Metropolitan owes the city money, it would be in a position to take care of that debt after the second phase of the Keys Landing project is completed. The first phase, initially 13 houses, was reduced to five houses over the years. The fifth house of the first phase has yet to be built and occupied. Moore said that would happen later this year.

Debate over the matter went on for several minutes.

“You did enter into a promissory note telling us that if we had to refund monies to the state as part of that grant agreement that you would reimburse the city for that expenditure,” Councilman Doug Mercer said Moore.

“As long as you allow me to do phase two, sure,” Moore replied.

“There was no (such) condition in that promissory note,” Mercer said.

“That was not a condition,” Councilman Larry Beeman said.

“It was always a two-phase program. You cannot build 13 houses for $250,000,” Moore said.

Moore also asked the city to pave the streets in Keys Landing, saying the homeowners there pay taxes and city fees for water, sewer and electricity and deserve to have the streets paved.

“You pay us the $238,000 and we’ll get out there and pave the street,” Mercer said.

Beeman took exception to Moore’s assertion that the April 4 letter is “threatening.” Moore read from the letter.

“There’s nothing in there that’s threatening,” Beeman said.

Moore disagreed.

Beeman made a motion that the city pave the streets in Keys Landing after Metropolitan paid the $238,000 to the city. Mercer seconded the motion, but it failed. Beeman and Mercer voted for the motion, but council members William Pitt, Virginia Finnerty and Richard Brooks voted against it. Finnerty said she needed more information about the matter before she could decide what course of action to support.

Brooks told Moore that he and Metropolitan should “take care of your financial obligations.”

The council instructed City Manager Bobby Roberson to meet with Moore in an effort to resolve the matter.