CHARLESTON, W.Va. — A developer faces two separate lawsuits over claims that he accepted more than a million dollars in rent money from Ticketmaster without passing it along.
Developer John Wellford of Charleston is the target of lawsuits by the West Virginia Water Development Authority and by the Kanawha County Commission.
Those government entities oversaw a lease agreement that started in 1999 with Wellford at its center. They extended the money as part of an economic development project.
Each lawsuit contends Wellford collected but failed to pass on $1,560,000 over a period of years.
The lawsuits were filed this morning in Kanawha Circuit Court and assigned to Judge Carrie Webster.
“We want the money back,” said Marie Prezioso, director of the Water Development Authority.
The Kanawha County lawsuit, which names both Wellford and his Corotoman Inc., goes so far as to call the act criminal, even though no criminal charges have been filed.
A statement released today by Kanawha County Commission President Kent Carper referred to Wellford as a “crooked landlord.”
“Make no mistake, I believe serious civil and criminal offenses have occurred. The Regional Development Authority will pursue all possible claims against this bad actor,” Carper stated.
That lawsuit asks for punitive damages, contending that what Wellford is accused of doing amounts to embezzlement.
“To date, Defendants have not been charged with any crime; Defendants’ conduct is ‘unprosecuted criminal conduct,'” wrote lawyers for Kanawha County.
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.
That’s how both entities — the Water Development Authority and the Kanawha County Commission — came to produce separate lawsuits.
Corotoman Inc. of Charleston, and its president, 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 July, 2017, she wanted to size up outstanding loans and asked for a review.
What she found out was troubling.
Ticketmaster, employer of 300 people, had been paying its rent on time.
“He received the rent payments. He just didn’t pass them on to us,” Prezioso said today on MetroNews’ “Talkline.”
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.
Payments were made in June, July, and August of this year, but prior to that only three payments had been made since October 2012.
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.
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.
A statement released today by the Kanawha County Commission alludes to outstanding tax debt unrelated to the situation with the Ticketmaster property.
Corotoman and Wellford have more than $2.4 million in federal, state, and city tax liens on record in the Kanawha County Clerk’s Office, according to the statement from the county.
The Water Development Authority’s lawsuit contends the full amount remaining on the original promissory note is $2,069,379.06.
That lawsuit cites a guaranty agreement for the punctual payment of principal and interest.
So the Water Development Authority wants immediate payment in that amount. The authority also wants payment for its attorneys’ fees and costs.
Kanawha County’s lawsuit makes a similar argument, although from the point of view of the Regional Development Authority.
The county’s lawsuit alleges a breach of contract for failing to pay over money due to the Water Development Authority on behalf of the Regional Development Authority.
The lawsuit contends that has resulted in damages of $1,561,000.87 representing the amount that was not passed along — plus another $333,018.31 in interest that is owed.
Moreover, the county alleges breach of contract for failing to follow through on the full contract, taking over ownership at the end and paying foregone real estate taxes.
“Payment of the foregone real estate taxes was a benefit which RDA bargained for when the agreement was entered,” the Kanawha County lawsuit states.