Thu04172014

Last updateTue, 04 Nov 2014 9pm

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County sends Notice of Default to Project FAITH

HELP Center deadline passes without start of construction

Project FAITH received a Notice of Default from King George last Friday.

The Aug. 2 letter was sent by King George county attorney Eric Gregory to put Project FAITH on notice that it failed to comply with the terms of the Deed of Gift and the Performance agreement, as amended, regarding commencement of construction of a proposed HELP Center.


Gregory wasted no time in sending the default notice.

The reason cited for the default is because Project FAITH has “failed to commence construction the proposed improvements/HELP Center facility by August 1, 2013,” as defined by “at least the pouring of all footers.”

 

REVERSION
The result of default, according to the guiding legal documents is “reversion.” Reversion is the legal term used for the county to reclaim the 5.529 acres of donated land. The parcel is located on the north side of Route 3 (Kings Hwy) across a side street from the new Sheriff’s office building.

DEED OF GIFT & PERFORMANCE AGREEMENT & AMENDMENTS
Gregory, on behalf of the county and the Board of Supervisors, is tasked with interpreting and defending the wording of the two legal documents, which were authored by former county attorney, Matt Britton, whose primary job was Commonwealth’s Attorney.

While Gregory did not write the original guiding legal documents, he did author the revisions to the Amended Deed of Gift and Exhibit A-Amended Performance Agreement. Those amendments were requested by Project FAITH in February and approved by the Board of Supervisors on a split vote.  

It is noteworthy that since an altered letter came to light in early June with Project FAITH executive director Froncé Wardlaw publicly taking responsibility for it, Supervisors have become united on the topic and appear to be unanimous that it is now a legal matter to be handled by the county attorney under board direction.

FAILURE TO DEVELOP
Here’s a closer look at the guiding legal documents.  The reversion section of the original Deed of Gift has two clauses. Clause A has to do with “failure to develop,” and is titled as such. Clause B is entitled “Failure to Use Property for the Purposes for which it is granted.”

Yet, it is clause B that provides for a 60-day grace period prior to reversion of the title of the 5.529-acre parcel that was given to Project FAITH.

The wording and language in clause B would not be expected to come into play under the current notice of default, since the property has not yet been put to any uses as contemplated by the two guiding legal documents.

Clause A was amended at the request of Project Faith earlier this year, with all other provisions remaining in effect, including the deadline of August 1, 2014 for substantial completion of construction of the facility. The successful delivery of the proposed HELP Center facility has always been about financing for the project, which has remained elusive.

DEED OF GIFT - CLAUSE A, AS AMENDED
Clause A, as amended, consists of one of long sentence. Clause A, as amended, appears below in its entirety.

 “All rights granted in this Deed shall cease and become null and void and Grantee’s interest along with all improvements and appurtenances shall revert to County if Grantee fails to commence construction of the improvements in accordance with the terms of the Performance Agreement on or before August 1, 2013, provided, however that if such failure is due to events or circumstances beyond Grantee’s control, including, but not limited to fire, wind, storm, strike, unavailability of materials, acts of God orders of Federal, State or local governments or their agencies or their courts, the Property shall revert to the County.”

PERFORMANCE AGREEMENT
The Deed of Gift in Clause B makes the distinction that a 60-day “cure” period would apply to numerous requirements referred collectively to, “Failure to Use the Property for the Purposes for which it is Granted.”

That could muddy the waters as to whether any cure period exists under a default having to do with failure to commence construction. At the same time, the Performance Agreement appears to have a catch-all clause in its final paragraph of the section entitled, “County Obligations.”

That’s where the agreement stated, “County shall give notice of any default and shall allow Company sixty (60) days to cure any such default before any reversion under the Deed or this Agreement shall take effect.” The point is likely to be considered legally debatable.

BOTH SIDES HAVE LAWYERS
Legal points may be negotiated by attorneys with the consent and concurrence of the results by their clients. If that is not successful, the next step, if taken, could be legal action.

If there is either agreement between the two parties or a dispute about the necessity of a 60-day cure period for Project FAITH to start construction, the clock started ticking on Aug. 2.

At the same time, the county, through Gregory, is still waiting for a detailed answer to its July 1 letter requesting details about Project FAITH’s plans for proceeding with its HELP center project, having asked for a detailed report to include financing, construction planning and administration, timelines consistent with the terms of the Deed and Agreement, prospective tenants, and a revised Operations Plan.

There are a few factors that could yet play out. Those include the potential 60-day time period to commence construction which can only come after issuance of a permits for land disturbance and building, advertisement of a construction bid, and award of contract. Those have a need for big funding. Another factor is the suspected use of an altered letter to attempt to obtain funding.

Stay tuned.

Phyllis Cook

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