A resolution to a dispute over $238,000 the city contends Metropolitan Housing & Development Corp. owes it and the paving of the road in the Keys Landing subdivision could be developing.

During its meeting Monday, the Washington City Council unanimously voted to pave those streets, provided that Metropolitan “deed” the city the remaining eight undeveloped lots in the subdivision. To recoup the money it spends on paving the road, about $40,000, if not more, the city would return each lot, as needed, to Metropolitan for one-eighth of the cost to pave the street. Metropolitan would have until 2025 to repurchase the lots, or they would remain city property.

The council instructed City Manager Bobby Roberson to present the city’s proposal to the Rev. David Moore, CEO of Metropolitan, for consideration.

The city, in an April 4 letter to Moore, 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.

At the April 10 meeting, Moore, referencing the April 4 letter asking for that reimbursement, said he believes he was being “treated like a criminal” and considers the letter an “insult.” Moore challenged the letter’s assertion Metropolitan owes the city $238,000. “This letter is unacceptable,” he told the council then.

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

After talking about the issue with Moore at its April 10 meeting, the council instructed Roberson to meet with Moore in an effort to resolve the matter. That meeting occurred, according to Roberson. Moore did not attend Monday’s council meeting.

The Keys Landing project, initially funded with $250,000 in Community Development Block Grant funds in 2015, has been plagued with problems over the years, resulting in the project being extended and modified several times. That CDBG grant has been closed out, resulting in the city having to pay the clawback.