The Department of Community and Economic Development wants answers to what happened to a $500,000 anchor building grant intended for the failed Allegheny Center for the Arts project on Liberty Street.
Approved during Monday's regular meeting of Warren City Council on Monday night, answers are on their way.
The city's Comprehensive Response Plan, provided to the Times Observer after Monday night's meeting, indicates that the state wants answers to some key questions, among them how the City will complete the ACA work and how the City will account for or replenish the revolving loan, including the time frame for such.
The grant was originally slated to be part of a revolving loan apparatus wherein revenue generated from the completed project could be flipped and loaned to local entities for additional development. The grant flowed through the city to GRO-Warren, an economic development entity whose board dissolved late last year.
"In order to accomplish completion of the Anchor Building Project, the City would be committing substantial additional taxpayer dollars," the plan states. "The City does not find this to be an economically viable solution to the problem."
What could be part of the solution is suing GRO-Warren.
To recoup some of the amount of the loan, the plan states that "City Council, on June 25, 2012, authorized the retention of special legal counsel to pursue recoupment of funds via legal action and/or possible settlement under the insurance policy covering the GRO-Warren organization."
However, the city recognizes its responsibility to ultimately pay back the funds.
"The City recognizes and accepts its responsibility to replenish the revolving loan account," the plan reads. "Therefore, the City proposes a twenty-year payment period and schedule...The City is prepared to begin making these payments at the start of the City's 2013 fiscal year." Each monthly payment would be $3,029.90. "Additionally, if, and when, the City is successful is recouping the $500,000 through successful legal action and/or settlement with the insurance company, any funds recovered will be paid directly into the revolving loan account at the time of receipt excepting those funds in excess of the outstanding principal balance...."
Amid the process of preparing the response, the City spoke with Jim Decker, president of the Warren County Chamber of Business and Industry, about taking over the ACA project. In a letter to Acting City Manager Mary Ann Nau, dated July 9, and attached to the plan, Decker explains that, "We are... very interested in partnering with the City of Warren in developing and implementing a plan for completion of the renovations which have been started on these properties."
However Decker went on to explain that "...we cannot commit to any level of involvement in this initiative without confirmation that all legal and financial exposures associated with the properties have been fully satisfied and resolved and that clear title to the property can be made available. The WCCBI is not interested in taking ownership of the property."
In a cover letter to DCED, Nau wrote that, "It is our hope that you will find the attached, the Comprehensive Response Plan and supporting documentation, sufficient and favorable to the DCED."
The motion to forward the plan to to the state was approved unanimously with both Mayor Mark Phillips and Councilman Howard Ferguson abstaining.
The Times Observer filed a Right to Know request in June with DCED for the complete fiscal monitoring report. DCED issued a 30-day extension on June 20 to that request. The agency has until Friday to respond to the request.