The firm will be asked to seek repayment of the $227,999.14 the city spent on building a road, drainage ditch and water and sewer lines on property on the U.S. Highway 181 Business Route in 2012.
The project was known as the Silver Oaks Retirement Community Development-Assisted Living Center, and the work the city had done was supposed to have been financed through a $300,000 grant from U.S. Housing and Urban Development.
The grant was applied for in 2009 after the City Council heard a request from the developer, Joan Reilly.
In April 2010, Beeville received word that the grant had been approved by the Texas Department of Agriculture – the state agency handling grants for the Texas Capital Fund.
The council had contracted with Grant Works of Austin to handle the application.
According to a contract signed by Retired Living Concept, L.L.C., and the city, the developer was to reimburse the city for up to $300,000 in the event that the project was not completed.
Interim City Manager Marvin Townsend said this week that the project was never finished and the three-year time period for completing it had expired.
Although the city requested an extension of the contract on May 28, 2013, the state responded that the grant had been terminated on May 4, 2013. The Department of Agriculture requested that the $18,750 it had sent to Beeville be repaid.
“I hand carried it back to the Department of Agriculture,” Townsend said when he was asked whether Beeville had paid the $18,750 amount.
According to a memo provided to the City Council from Townsend’s office, Reilly had told the council on Nov. 25, 2009, that she had a loan commitment from First National Bank of Beeville for $2.5 million.
Five days later, during a special meeting of the council, three members attending the meeting authorized the city to apply for the grant.
The grant was approved on April 14, 2010.
On Sept. 14 of that year, the council took action on hiring an engineer for the project and appointing Grant Works to handle the application.
Townsend said the grant was intended to provide jobs for the city. Reilly had said at least a dozen positions would be created by the construction of the project and that the city would be reimbursed $25,000 for each job that was not created.
Reilly provided a personal guarantee of $300,000 to the city. Bids were then rejected after the project’s cost of the street construction came in higher than expected.
On Feb. 28, 2012, Harborth Construction was hired to do the work for a total of $196,867.
Reilly certified that construction on the project had begun, but a report given to the council by Townsend revealed that the only work that had started was that being done by the city’s contractors.
It was in June of last year that the city received official notice that the grant had been terminated by the state and that the city owed the Department of Agriculture the $18,750 that it had collected up to that point.
A breakdown of the expenditures of the project showed that $196,049.14 was paid to Harborth Construction, $19,700 went to Urban Engineering and $12.250 was paid Grand Works.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at reporter@mySouTex.com.