Listen Now: Morning News

Agencies try again to cancel lease on vacant property, but new mall owner wants proof

CHARLESTON, W.Va. — State agencies today produced new letters meant to cancel a lease at Fairmont’s Middletown Mall, where rent payments amounting to almost a million dollars have been made for years after office suites were vacated.

But the new owner of the property says he doesn’t have a copy and that the state should honor its lease until he does.

“To date, we’ve not gotten anything,” said David Biafora, one of the owners of General Acquisitions, which just bought Middletown Mall out of bankruptcy. “Maybe they don’t know where to send it.”

The fresh letters from the state Real Estate Division are dated June 8 and were provided to MetroNews by request.

“To the extent that there is any misunderstanding about the current validity of the leases, please consider this letter as notice that the leases were appropriately terminated in 2015,” Real Estate Division Director Jon Amores wrote.



Lease Cancellation Letters (Text)

The state followed up on Friday by providing signed receipts for certified letters, including for General Acquisitions.



Certified Letter Return Receipts (Text)

Copies are addressed to General Acquisitions, to the old owner, Pin Oak Properties, and to BB&T.

The State Auditor, in a report released this week, concluded that each of those has received hundreds of thousands of dollars in state rent that never should have been sent.

That amounted to $432,702.76 for BB&T, $185,444.04 for General Acquisitions and $247,258.72 for Pin Oak.

The Legislative Auditor recommended the state take every legal means to recoup the payments.

Biafora isn’t exactly on the same page. He took a phone call and answered questions while having lunch on Thursday.

As far as Biafora knows, he said, the State Department of Health and Human Resources still has a valid lease and should be paying rent.

“I haven’t seen ay notice and there’s nothing in the files of bankruptcy and nothing in any file that we got through Pin Oak that says they moved out.”

State government was paying a combined total of $30,907.34 a month for use of multiple properties at Middletown Mall. The lease agreement initially was with Pin Oak Properties, owned by Steve Fansler of Morgantown, who has not returned messages left with his business.

DHHR’s Fairmont offices were moved to a new state office building in 2015.

The payments for space at Middletown Mall continued even after that, though.

Biafora, as much as anyone, thinks that’s weird.

“What’s kind of odd is why the state kept paying,” Biafora said today.

Middletown Mall went into bankruptcy last June and into receivership this past January. General Acquisitions, owned by David Biafora and his brother Rick, bought the mall out of bankruptcy on May 8.

The landlords received payments from the state even before the bankruptcy closed, though. In a March 1, 2017, letter to the Real Estate Division, General Acquisitions gave notice that it was exercising provisions allowing it to receive monthly rental payments on behalf of Pin Oak.

“We said all the rents come to us, all the leases, all the assets,” Biafora said today.

The letter, which sought payments to be made to General Acquisitions on behalf of Pin Oak, should have drawn major questions and flags, the Auditor’s Office wrote.

But the agency made the requested payment change, despite its own position that DHHR had vacated the property.

The Auditor’s Office, as a result of its investigation, stopped any payments on the property this past February.

As Middletown Mall was sold during bankruptcy, Biafora said the he only received one item of paperwork related to DHHR.

“In my file, I have a lease,” Biafora said. “That’s all that was given to me during bankruptcy.”

He has, however, seen an unsigned, undated memo on Real Estate Division letterhead that described moving out of the property in 2015.



DHHR Lease Termination Docs (Text)

He thinks that’s strange too.

“There’s no date on it, no signature, nothing. That’s pretty baffling,” he said. “It sounds like the have a draft letter. Or maybe they made this letter up and don’t want to sign it and date it. We’ve read this thing like ten times.”

Until he sees something official, Biafora said, his business has to assume the lease is still good through its 2019 expiration date.

Otherwise, he said, he can’t just assume the state’s intentions.

“People vacate places all the time and pay until their lease is up,” he said. “Sometimes they just pay the lease out, sometimes they make a deal.

“When we bought the mall, before we bought the note, we were told DHHR was not occupying the space, it was empty but they were still paying the rent and it was on the rent roll.”

He said the state could leave by providing 30 days notice.

“They would owe us some rent,” he said. “June, July and they’d be out in August.”

Each of the agencies involved issued statements today acknowledging they had addressed this issue poorly. They vowed to do better.

DHHR stated, “It is clear that past practices and policies have been insufficient, and the Department is committed to making the necessary changes to ensure such incidents do not happen again.

“DHHR is working with the Attorney General’s Office in exploring legal options to recoup funding from this landlord for the improper payments they received.”

The Real Estate Division commented, “We do take these issues seriously and have and will continue make any adjustments to our processes as necessary to ensure situations such as this will not reoccur.”

Biafora says they ought to pay the rent he believes they still owe.

“If the state still has a lease, they should pay it,” he said today. “I highly doubt they would pay it, and I wouldn’t spend the money on legal to chase them down. It would probably look pretty bad.”





More News

News
MetroNews This Morning 3-29-24
Summary of West Virginia news, sports, and weather for Friday, March 29, 2024
March 29, 2024 - 6:24 am
News
Dunlow Volunteer Fire Department closes
The Dunlow VFD did not have a valid workers compensation insurance policy.
March 29, 2024 - 1:23 am
News
As Yeager Airport's Wildlife Patrol Dog turns 7, a new dog comes in to learn from him
The new Border Collie is getting acclimated and receiving training for his soon-to-be role.
March 28, 2024 - 6:30 pm
News
PEIA examines financial effects of new law meant to ensure local pharmacies get fair reimbursements
Gov. Jim Justice signed Senate Bill 453 into law this week.
March 28, 2024 - 4:11 pm