AP CRA sues center for repayment of grant

A deal to repair Hopewell Academy for the Art's gymnasium went sour when the previous owners broke their agreement with Avon Park's Community Redevelopment Agency to repay $38,000.

Now the CRA wants its money back.

On Dec. 11, 2009 it filed a lawsuit against Mid-Florida Center for Mental Health and Substance Abuse Services Inc. for breaking its contract.

In Oct. 2007, the CRA approved a $48,000 grant to Mid-Florida to rebuild the roof and complete other repairs to the gymnasium, which they owned at the time.

According to city records, Mid-Florida accepted the grant and agreed to a repayment schedule if they sold the building within five years.

A year after the repairs were completed, Mid-Florida sold the building - they purchased it for $20,000 in 2000- for $275,000 in 2009.

Some city officials say the organization walked away with a hefty profit using public funds. The CRA wants them to follow through with their contract to pay back $38,000 of the grant.

But in Mid-Florida's response to the lawsuit, their director Arthur J. Cox denied the organization owes the CRA any money. He claims the organization never received it.

"It's legal maneuvering," said Maria Sutherland, interim city manager.

Grant to improve youth community center goes sour

Hopewell Academy for the Arts was the city's only charter school until April 2008, when budgetary constraints and low enrollment led Mid-Florida to close its doors.

A year before the school closed, the school's director, Kevin Dewberry, initiated a partnership with the Southside CRA in hopes that rehabbing the school's gymnasium's roof would benefit the community.

In 2004, several tropical storms and hurricanes damaged the roof and lack of funding for repairs led to further deterioration.

Cox supported Dewberry's initiative, and both met with city officials on several occasions between June 2007 and October 2007 to discuss possible funding for repairs.

The CRA approved $48,000 to fund the refurbishing in October 2007. During that time, Sutherland and Dewberry said they and Cox met to discuss the terms of the grant.

According to city records, Cox signed an agreement that stated a repayment schedule if the building was sold within five years of receiving the grant money- an agreement that Cox denies.

"Mid-Florida never received cash, check, money order or any other means of currency demonstrating receipt of any funds from the CRA grant," Cox wrote in his response to the CRA lawsuit.

He further stated, "...they Mid-Florida owe the CRA nothing but a thank you for doing what it is mandated to do with public funds."

Dewberry, who worked closely with the city and Mid-Florida to have the renovations completed, was stunned upon reading Cox's letter.

"I thank the CRA and the city for helping. It's unfortunate that they Mid-Florida haven't lived up to their contractual agreement," Dewberry said.

According to city records, Cox did agree to a repayment schedule and had full knowledge of the terms of the agreement for the grant.

In a letter signed by Cox addressed to Sutherland, he acknowledged the repayment schedule and terms of the grant. The city also has copies of checks issued to contractors for the work on the gymnasium totaling $48,000.

Despite records that show Cox and Mid-Florida were aware of the terms of the agreement, the organization came up with its own interpretation of the deal during their board of directors meeting on June 30, 2009.

According the board's meeting minutes the organization said:

"Dr. Cox said C.B. Shirey sent a letter out about how much was owed. Dr. Cox and the board agreed this was grant money, the city entered into an agreement without contact approved and/ or written contract."

However, Dewberry recalls the terms of the agreement were discussed between Cox, Dewberry and Sutherland.

Records favor city

Mid-Florida purchased the Hopewell Academy in 2000 for $20,000 from the Highlands County School Board.

Shortly after the repairs were made, Dewberry said there was talk about selling. Mid-Florida sold the building March 31, 2009 for $275,000 to Redlands Christian Migrant Association, Inc.

Mid-Florida walked away with a lucrative deal, city officials said. And Cox's unwillingness to pay back his portion of the grant has led some to speculate that Mid-Florida made a profit off of public funds.

"Without the repairs I doubt he would've been able to benefit from the sale ... the building needed a lot of work," Sutherland said.

Cox did not return calls for comment.

Wes Hoaglund, CRA director, said that it is not uncommon for communities to award grant money with repayment provisions.

"You're trying to benefit the business occupants and not provide that owner with increased resell values based on public funds. That's why communities put these provisions," Hoaglund said.

With such a large amount of grant money to account for the CRA paid the contractors directly after receiving estimates from several vendors.

Quality Home Maintenance Inc. received $2,201.62 for air conditioning repairs and Stewart Construction received $45,798.38 for roof repairs, electrical remodeling and window installation.

According to the CRA's complaint against Mid-Florida, they were to repay the full amount ($48,000) if the property was sold by Jan. 31, 2009 and $38,000 if sold by Jan. 30, 2010.

The city is seeking repayment of $38,000, plus filing costs and prejudgment interest on the grant beginning on March, 31, 2009.

"A deal is a deal. Whether the money went to Mid-Florida's pockets or not contractors directly...the responsible thing to do would be to pay back his portion...He is evading the situation and that's not fair to the Southside community," Sutherland said.

History of Hopewell Academy building

The Hopewell Academy building was owned by the city in 2000 but through a quick claim deed it was transferred to the Highlands County School Board.

Mid-Florida purchased the building for $20,000 that year and operated the school along with the school's board of directors.

In 2009 they sold it to RCMA for $275,000.

CRA paid contractors directly

Stewart Construction was paid $11,643.79 for window repairs; $19,182.09 for roof; $14,972.50 for electrical repairs made between March and April 2008.

Quality Home Maintenance Inc. was paid on July 9, 2008, $2,201.62 for air conditioning repairs.