Developer accused of pocketing $1.5 million in rent ‘acted in good faith’

CHARLESTON, W.Va. — A developer accused of accepting more than a million dollars in rent money from Ticketmaster while making minimal progress on a loan from the State of West Virginia says he’s done nothing wrong.

Furthermore, Charleston developer John Wellford has filed a counterclaim.

“The Defendants state that they acted in good faith and without malice or intent to injure the plaintiff,” lawyers for Wellford wrote in a response filed last week in Kanawha Circuit Court.

Wellford 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 Kanawha County lawsuit asked 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 response for Wellford specifically denies that.

“The Defendants deny that their conduct constitutes embezzlement and demand strict proof thereof.”

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.

When Marie Prezioso took over leadership of the West Virginia Water Development Authority at the end of July, 2017, she wanted to size up outstanding loans and asked for a review.

What she found out was troubling.

Many months over the years, the payments were not passed on by Wellford and his company, Prezioso said. In total, 79 payments were missed.

Last week’s filing on behalf of Wellford includes a counterclaim. It says that in summer and fall of 2018, Wellford negotiated the repurchase of the Ticketmaster property. But the counterclaim says the other side refused to discuss the repurchase.

From Wellford’s view, the repurchase would have led next to the sale of the property to a third party. That would have moved responsibility for the lease while allowing Ticketmaster to stay at the property.

“As a direct and proximate result of the breach by the Plaintiff of the REPA, to-wit:by not accepting the rights of Corotoman to repurchase the Premises and the rights conveyed or transferred to RDA, the Defendants have been damaged,” according to the counterclaim.

Lawyers for Wellford want the original complaint to be dismissed, attorneys fees, damages, punitive damages and any other relief.





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