YEAGERTOWN - Although the developers of the Derry Heights project have been awarded a $2 million grant through the state's Redevelopment Assistance Program, it doesn't look like they'll be cashing any checks just yet.
That's because a contract between the state and Mifflin County Industrial Corporation, who will administer the grant, stipulates that a municipal third party must also participate before any of the $2 million can be disbursed.
During the Derry Township Supervisor's meeting held Monday evening, MCIDC President Rob Postal said Derry Township will need to adopt an ordinance that would essentially recognize its commitment to repay the $2 million to the commonwealth in the event the state were to find fault with how the grant money is ultimately used.
Postal said he doesn't foresee any potential problems for the township, but as an example, he said if any of the money was used to reimburse the developer for construction costs in which the prevailing wage stipulated by the state Department of Labor and Industry was not paid, that could be deemed an ineligible cost and grounds for the state to demand a repayment of the grant money.
Currently, $425,000 of the grant is slated to reimburse the project developer, Nick Moraitis, for costs associated with the purchase of the property along Ferguson Valley Road where his company plans to build several hotels, a restaurant, movie theater, water park and family sports center. The remainder of the grant would reimburse the developer for utility costs and storm water management infrastructure on the property.
Postal said any potential problems would probably not emerge until after the state completes its audit of the project.
Supervisor Ronald Napikoski said the board needed to find a solution that allows the grant to move forward in a way that would pose minimal risk to the township.
"They are counting on this money, so its a go or no-go situation," Napikoski said.
Postal said he understood why the supervisors might have some concerns about the proposed arrangement.
"Everyone could do everything correctly and then in three years, there is a problem," Postal said, referring to when he thinks the state would complete an audit.
Supervisor John McCullough acknowledged the developer's need for the reimbursement funds, but he said the board should act cautiously.
"We are not trying to make a buck on this; we just don't want to lose money. We have to protect our citizens," McCullough said.
The supervisors discussed utilizing declining letters of credit or bonds to ensure the township - and ultimately, the taxpayers - would not be stuck with a $2 million bill once the project is completed. The supervisors agreed to refer the issue to legal counsel and staff to determine the most suitable course of action, at which point the supervisors will meet with the developer and MCIDC to discuss their options.
Postal said if Derry Township opts to refrain from involvement with the grant, he may approach the Mifflin County Commissioners with the request. Postal acknowledged the commissioners would likely have the same questions and concerns as the supervisors.