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HELP Center passed over for CDBG funding

Project FAITH’s proposed HELP Center project has been passed over again by the state in the latest round of competitive grant applications funded this week by the Department of Housing & Community Development.


A similar amount, $690,000, had been requested three years ago in 2010 for the project. That request also failed to receive funding.  

The latest setback for the proposed HELP Center was indicated last Friday by a press release from the office of Governor Bob McDonnell dated June 21. The release said that eleven projects around the state will receive $6.8 million in Community Development Block Grant (CDBG) funding.

By its absence on the list, it’s clear the HELP Center project was not among them.

$700,000 had been requested earlier this year in March for CDBG funding to go toward construction of a small portion of the proposed facility. It was requested for costs toward construction of a 1,500 square-foot free clinic that would comprise a portion of the proposed 30,500 square-foot facility.

 

HELP CENTER REPORT ON THIS WEEK’S AGENDA
Project FAITH executive director Froncé Wardlaw is on this week’s agenda to report progress for the project slated to be built on land already provided free from the county.

The meeting of the Board of Supervisors is on June 25, following our press time.

It is likely she will also be questioned about whether her other potential funding sources will hold together with the grant setback.

Wardlaw may also be asked for a more thorough explanation about a letter that she has taken responsibility for altering that came from Rappahannock Community College President Elizabeth Crowther.

That letter had been intended for one-time use in 2010 on that first failed CDBG application for the proposed HELP Center, but had recently turned up with a date change to 2012.

CLOSED SESSION FOR LEGAL CONSULTATION
Wardlaw’s slated presentation near the beginning of the meeting is not the only listing of the proposed project on the meeting agenda.

The topic also appears as a closed meeting subject near the end of the meeting agenda, “for consultation with legal counsel employed or retained by a public body regarding specific legal matters requiring the provision of legal advice by such counsel.”

Where that discussion will lead is unknown. It’s possible that the board will be exploring legal aspects of the proposed project related to a performance agreement and deed of gift that require strict adherence to their clauses.

CLAUSE FOR REVERSION OF LAND
The performance agreement dated June 28, 2012 and amended in February 2013 requires that construction be commenced with all footings poured no later than Aug. 1, 2013.

The performance agreement provides that the County “retains the right to reclaim the property through reversion of the property and all structures, appurtenances and improvements of any kind, in the event that Company does not meet all of its obligations under this Agreement and as set forth in the Deed.”

Whether the board will let that deadline slide, extend it again as they did in February, or require strict adherence remains to be seen.  

The companion legal document to the performance agreement, a deed of gift date June 28, 2012, also contains a reversion clause under a paragraph named, “Failure to Develop.”

That clause states that the rights granted in the deed “shall cease and become null and void and Grantee’s interest along with all improvements and appurtenances shall revert to the County” if the deadline is not met for commencement of construction.

It could also revert if the deadline for completion is not met. That completion deadline is August 1, 2014.

The documents also intend that Project FAITH must own and operate the facility in perpetuity or reversion would occur. The performance agreement states, “Company is solely responsible for the continued maintenance and operation of the Facility solely for its stated and intended purposes.”

LIABILITY ISSUE
If the land were to revert to the county, it appears that the county would also get the liability on the property and on any improvements. As of Wardlaw’s report earlier this year in February, that liability appeared to be $850,000 at the most, from a land loan from an unspecified source. It is not known whether that funding has been drawn upon and spent.

The deed of gift states that the property cannot be encumbered “in any way and for any purpose not directly related to the development and use of the property to accomplish its mission.”

But if the reversion clause is invoked, any amount of liability could end up being subject to dispute, depending on how it was spent.

For example, if the money was spent on costs for engineering and design, that would appear to be in compliance. If such funds were simply used to pay salaries for Wardlaw and the office manager, there could be an argument against it being a liability accruing to the land.

There are numerous unknowns about the proposed project. Many experienced owners of commercial property now find themselves with empty buildings and few tenants seeking long-term leases.

That could happen to Project FAITH as the developer of the HELP Center.

The project is proposed to cost $8.4 million. The loan paybacks could require a higher lease rate than non-profits are prepared to pay.

The same could be true for state agencies that must also follow state rules for procuring space with price considered an important factor.

If the project were to fail in the future, any liability on the property could be higher.

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