FAIRMONT, W.Va. — With a federal bankruptcy lawsuit now behind them, officials with the West Virginia High Technology Consortium Foundation and its HT Foundation are optimistic for the coming year.
“There’s a couple really exciting initiatives that are going to be put into place this year, and I’m really looking forward to that,” said Jim Estep, president and CEO of the High Technology Foundation.
On Tuesday, U.S. Bankruptcy Judge Patrick Flatley granted the dismissal of the Chapter 11 bankruptcy filing by the Consortium/Foundation, thus not only diminishing the entity’s staggering debt but also opening possibilities for new revenue.
“When you’re in bankruptcy, of course, it’s very hard to sign new contracts,” Estep said. “Fortunately we had just enough existing contracts that saw us through the last year, but we’ve been unable to sign new ones. Now that it’s officially dismissed, we’re moving forward to enter into a few contracts that have just been on hold.”
The first step, however, is moving forward with the sale of two parcels of land at the I-79 Technology Park to pay off Huntington Bank — the creditor in the federal bankruptcy case.
The properties, known as the Innovation Center and 5000 NASA Blvd., have suffered a drop in occupancy rates, Estep said. After failed attempts to negotiate, Huntington Bank filed a breach of contract lawsuit.
“We had lost two large tenants at one of our facilities, and the revenues from that facility that couldn’t support the full debt service,” he said. “That in and of itself wasn’t the sole motivation for us filing for Chapter 11 protection. They also exercised the right they had to have all the rent checks of the facilities sent directly to them, leaving us with the cost of the operation of the building, which we couldn’t sustain, obviously, without those rent revenues.”
Judge Patrick Flatley provided counseling to the two entities, ultimately ending in a settlement agreement in which either the space would be back filled or the facilities would be sold.
“Fortunately we were able to, over the last year, back fill the space, so that the two levels are even higher than they were before, and we were also able to come to terms with a buyer for the facilities, who I think is going to be a great partner with us at the park,” Estep said.
The Consortium/Foundation is in the process of assembling closing documents, with a closing date expected within the next few weeks, he said.
“I’m excited about that. It fits perfectly with our strategic plan, and the person we’re selling to is going to be a great partner,” Estep said. “Now we can focus on some new projects that we’ve been teeing up over the last several years that we’re going to get started here in the spring.”
With the bankruptcy case now behind him, Estep said he and his staff can instead focus on their “incredibly important mission” — working to diversify West Virginia’s economy.
“It’s difficult to get funding for economic diversification in West Virginia, especially one of the magnitude of what we’re pursuing, but it’s absolutely a critical activity as part of our state’s economy recovery,” he said. “So regardless of how difficult it is and what challenges we may have to face, we’re willing to work that much harder and take on challenges as they come, no matter how unpleasant.”
In addition to the sale of the Innovation Center and 5000 NASA Blvd., Phase III of the I-79 Technology Park is slated to begin construction this spring.
Estep said the objective is to offer the building sites along the new road system to federal operations, similar to the National Oceanic and Atmospheric Administration’s existing programs in Fairmont and the FBI’s Criminal Justice Informational Service in Clarksburg, that are looking for new locations out of the Greater D.C. area.
“We’re targeting activities for those anchors because each time we bring one of those federal operations into our community that’s doing a lot of contracting, it creates a business case for knowledge sector companies to want to come and do business in this region,” he said. “That’s a critical path element of the state’s economic diversification needs, and it’s key to building a knowledge sector in the state to address some of our broken workforce demographic issues.”
Additionally, NOAA currently has out a bid a contract to support the Park’s Super Computing Center, which is worth $553 million, “and that’s really got the attention of a lot of large technology companies around the country who are now looking seriously at the park and really all of North Central West Virginia,” Estep said.
The U.S. Commerce Department has out for bid another contract that would bring tens of millions of dollars to support their cyber security program, he said.
“I’m really optimistic that we could really be seeing the solid foundations of a new economic sector for the state,” he said.