CHARLESTON, W.Va. — A Charleston business has failed to make $1.5 million in loan payments due to the state over a period of almost two decades, the Justice administration contends.
The Governor’s Office made the allegation in a news release distributed today.
“As soon as I became aware of this problem, I directed my staff to turn over the evidence to the State Police, and to begin working with the appropriate parties to recover the lost payments,” Gov. Jim Justice stated.
This twist comes just a couple months after the revelation the state paid almost a million dollars for office space at the Middletown Mall in Fairmont, vacated three years ago.
In this case, the state was owed the checks but wasn’t enforcing payment.
This instance came to light through an internal review by the West Virginia Water Development Authority, according to the statement from the Governor’s Office.
The situation dates back to 1999, when the West Virginia Water Development Authority loaned $3 million to the Regional Development Authority of Charleston-Kanawha County to finance the purchase of the Ticketmaster building in the Northgate Business Park.
Corotoman Inc. of Charleston, and its president, John Wellford, had been developers of the property. The deal allowed the businessman to remain as the landlord of the building, including being responsible for collecting the rent and making all loan payments.
The loan was designed so that once the loan was paid off on schedule, August 1, 2019, Wellford would take over ownership outright.
The West Virginia Water Development Authority,which finances water and sewer projects, has a relatively new director. When Marie Prezioso took over leadership of the agency at the end of last July, she wanted to size up outstanding loans and asked for a review.
“We found out it was seriously in default,” said Prezioso, who has a long career in public finance. She’s the sister of Senate Minority Leader Roman Prezioso.
Ticketmaster, employer of 300 people, had been paying its rent on time.
But many months over the years, the payments were not passed on by Wellford and his company, Prezioso said. In total, 79 payments were missed.
“There’s no reason,” Prezioso said. “I don’t know when he received the money from Ticketmaster what he did with it but he didn’t give it to us.”
Payments were made in June, July, and August of this year, but prior to that only three payments had been made since October 2012.
“I think it got worse. For the first several years they did a really good job. Then they started to miss payments and it started to become a problem,” Prezioso said.
“At the very beginning I think it was working out fairly well. After 2009 or so it started to become an issue. He would make a few payments and quit, make a few and quit. It was kind of a problem.”
Wellford, one of the main developers of the Northgate Business Park, has felt the strain of additional tax troubles in recent years.
In 2015, The Charleston Gazette-Mail wrote that three businesses owned by Wellford owed $229,791.70 in 2014 taxes on 302 tax tickets. That made Wellford one of the biggest tax delinquents in Kanawha County, the newspaper wrote.
Wellford’s financial situation prompted conversations with Chris Jarrett, Prezioso’s precessor as the water development authority’s director. Jarrett was director of the agency for seven years, retiring last summer after an ethics investigation with no apparent relation to the Wellford matter.
“Over the years, the previous director would talk to him about why he was behind. I’m not privy to any of those conversations,” Prezioso said Wednesday afternoon.
“When I saw it, I said ‘Wait a minute, this is not right. He’s getting the money, it’s our money, the authority should be paid down on the loan.’ As soon as I told the Governor’s Office about it they wanted me to take immediate action.”
Prezioso said the agency’s lawyers have contacted Wellford’s lawyers. The water authority board was briefed about the investigation Tuesday.
On Wednesday afternoon, the telephone number for Wellford’s home rang busy and no one picked up calls at the Corotoman office.
Kanawha County Commission President Kent Carper said the missed payments over all those years are inexcusable.
“It’s a red flag,” Carper said.
“This never should have occurred. Fortunately, I made sure the county’s financial interests were protected. The county’s not out a penny.”