News

Local builder, county contest loan for burned building

By DOMINIC ADAMS Argus-Press Staff Writer

Thursday, June 5, 2008 12:05 PM EDT

Argus-Press File Photo The Wesener Building on Washington Street in downtown Owosso is shown boarded up following the July 4, 2007, arson.

OWOSSO - An argument surrounding $15,000 in grant funds between the owner of the burned-out Wesener Building and Shiawassee County may end up in mediation.

Rock Solid Associates owner David Miller sued the county almost three months after a July 4 arson destroyed the historic site on Washington Street.

Miller contends he should not have to pay the remaining $15,000 of a housing rehabilitation loan to the county because fire destroyed the building.

The lawsuit came after Shiawassee County Commissioners denied Miller's request in September to reduce the payoff balance of the loan through the Shiawassee County Office of Development, Housing and Rehabilitation Program by 20 percent.

Mark Hanna - Miller's attorney - and Shiawassee County Prosecutor Randy Colbry presented information Tuesday during a court-ordered complaint review panel.

“That's why (county commissioners) had to back up because they didn't have the authority to do what they did,” Hanna said.

County Administrator Margaret McAvoy formed the committee and sits on it along with Robert Hardy and Jerry Scepka. The group has 15 days to notify both parties of its decision.

Court records show Owosso-based Rock Solid received $79,692 from its insurance company after the fire and repaid $64,693 to the Shiawassee County Office of Development, Housing and Rehabilitation Program because Miller did not rebuild.

Miller signed a mortgage with the county in 2004, utilizing funds from the Michigan State Housing Development Authority for renovations at the site.

In December, Shiawassee County Circuit Court Judge Gerald Lostracco ordered the contested $14,999 - which represents a year of Miller's renting five Washington Street properties - into a Shiawassee Circuit Court account. Court documents indicate the money will go to whichever party prevails in the dispute.

Hanna said he had to sue the county in order to receive due process via Tuesday's review.

“Rock Solid did not elect to not perform. It was a criminal act that stopped it,” Hanna said. “His building burned. Don't burn him. The guy is due his money. The guy did his work.”

Hanna asked the committee allow Michigan State Housing Development Authority officials to make a final decision.

Colbry said the $15,000 should go to the SCDHRP to fund other programs.

He also said Hanna's lawsuit had no merit.

Lostracco dismissed the civil case without prejudice, which means Hanna can refile the suit at any time.

“Rock Solid Associates took at least $65,000 in public monies toward this project. They decided, ‘we're walking away from this project but we want you to give us this another $15,000,'” Colbry said. “Mr. Hanna is asking that you make a gift - that you change this contract after its inception; in fact after its conclusion - that you change this contract and grant $15,000 to Rock Solid Associates. That would be contrary to the Constitution of the state of Michigan. This isn't something that is legal.”

The state's complaint procedure allows Miller to seek mediation if he is not satisfied with the review committee's recommendation. If Miller does not like what happens during dispute resolution, the county must notify MSHDA in writing about the case, according to MSHDA documents outlining the complaint procedure.

The Michigan State Police continue to investigate the Wesener Building arson, which killed 22-year-old Greg Shire.

- Dominic Adams may be reached at 725-5136 extension 239 or by e-mail at dadamsarguspress@gmail.com.

Comment on this Story

Brick in the wall wrote on Jun 6, 2008 8:48 AM:

" Dr. Stephen Marilyn Lewis, The county's greed and lack of common scenes, Along with the city not being able to solve the numerous arson fires.
Especially this on that took Greg Shire's Life, Just makes my blood boil.

I respect those guys that took on the renovation project. I cannot believe the county even suggests the money is not Rock Solid's to keep. This Country was built with the backs of man like Rock Solid's crew, and the pencil pushers continue to ruin it.HMMMMMMMMM "

Pink Floyd wrote on Jun 5, 2008 5:09 PM:

" I fully agree with brick in the wall.
In my opinon If the county is going to steal the money back from Rock Solid they should be doing the right thing with that $15,000.00. That money should be used as a reward to find the arsonist that set that fire that killed Rock Solids dreams,Greg Shire,the county's goals, and injured all those other innocent tenents. The young adults that lived in those apartments were starting out their lives into adulthood and no doubt on their own for the first time and will have to live with the scars from their injuries for the rest of their lives. "

Dr. Stephen Marilyn Lewis wrote on Jun 5, 2008 12:39 PM:

" You are very right on this one..Our sons worked their blank blanks off doing the renovation of this old building. They probally even inhaled carcinogens over the months of gutting and rebuilding that was done. And for what? And this is the graditude they get for making the downtown a nicer place to work and live..It was bad enough that some nut came along and burnt the place and he is still running around free even after killing someone.. "

Brick in the wall wrote on Jun 5, 2008 12:49 AM:

" It's a little hard to do the math on this. rock solid paid the money it borrowed back. But was there interest that needed paid back too?
I assume the loan was granted to enhance the over all betterment of the community. That is a great plan. unfortunately it went bad. Did rock solid invest time and money into the project? If so how could anyone think they should not be paid for services rendered? On the other hand Why should the county not benefit from their investment? If both parties are in the right My next Question would be who insured the building? How much was the building insured for? How was the amount the building was insured for determined? Was The county's investment along with rock solids investment covered? If not why? It only seems obvious rock solid took on this project to benefit the company. Time and effort is not free. The deal goes bad because the building burns. How can the county For one second think rock solid should eat their efforts. Did the county insure their investment? Why Or why not? Assuming rock solid insured the building, Did the county make it clear what they expected in the event of a fire? If not Rock solid has $15.000.00 coming back to them.
If all expectations where Crystal clear. I would ask was the building under insured? or does the insurance company owe an additional $15.000.00 To satisfy all parties involved. It is my opinion If the county Has no regard for company's that try to better themselves and the community. Why would any other company want to step up to the plate? If risk takers were a dime a dozen we would have no empty buildings in the county.

If the $15.000.00 Is a gift let me know how to get a gift. "