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The financial problems facing Starpointe Industrial Park – which is expected to be sold to a private company after recently being scheduled for sheriff’s sale – accelerated after the COVID-19 pandemic stalled parcel sales and stopped new development, starving it of cash to pay contractors. The troubled industrial business park in northern Washington County hired Independence Excavating Inc. in late 2019 to clear and grade about 100 acres of land for Phase 1-C of the development, and the work began in early 2020.
As part of that plan, the Washington County Council on Economic Development, which is the nonprofit organization that owns and operates Starpointe, had several parcel sales lined up in the 1-A and 1-B sections of the business park, with the proceeds earmarked to pay the contractor. But as the COVID-19 pandemic spread and led to economic uncertainty, those sales fell through and development at the business park stagnated as companies pulled back on expansion projects. “The property sales did not come to fruition and there was a shortfall,” said Rich Sahar, who has been with WCCED since early 2020 and was elevated to the position of executive director in April 2022.
“We were faced with decisions on what to do at that point. We were unsuccessful due to the economy.” Sahar said WCCED had state grants and Local Share Account money from gambling revenue to help cover a portion of the roughly $5 million contract to Independence Excavating for its work to prepare the 1-C section for development.
But it wasn’t enough, leaving WCCED about $2 million short and ultimately leading to a multimillion-dollar judgment being awarded to Independence. Sahar said WCCED, which is independent from Washington County’s government, tried in 2021 and 2022 to secure a $2 million bailout from the county commissioners to pay Independence – first asking for a grant and then requesting a low-interest loan – but was rebuffed both times. Over the next couple of years, the $2 million in outstanding payments increased through late fees, penalties and court costs, all while WCCED was unable to generate any new income as the financial aftershocks from the pandemic stopped any potential new development at the business park.
“It just bloomed over the term of this thing,” Sahar said of how the debt increased. “When you’re $2 million in the hole, it’s tough to find a ‘white knight’ out there.” Commissioner Nick Sherman said Starpointe had already received about $10 million from LSA gambling revenue and state grants over the years, so officials did not see the need to divert county tax dollars in that direction.
“When I got on (in 2020), I didn’t have the confidence that (the WCCED) board would be able to deliver on that project when they failed so many times in the past,” Sherman said. “I felt it was irresponsible for the taxpayers to foot the bill for an organization that was unable to produce results.” Commissioner Larry Maggi echoed that sentiment and said there were ongoing concerns for years about the financial situation surrounding Starpointe.
He added that county officials had no oversight of the organization, which meant the commissioners had no input on Starpointe’s future or its finances. “There was a lot of public money that was put into Starpointe by LSA. A lot of public money, and I just think over the years, we had no say on what happened out there, we had no positions on the (WCCED) board,” Maggi said.
“We felt like it wasn’t managed the way we wanted to see it.” Maggi thinks the explanation that the pandemic stalled development “oversimplified the issue” because Starpointe struggled to gain traction in the two decades after it opened for business. Starpointe opened for development in October 2004 and offered 1,200 acres in Hanover and Smith townships for larger industries and manufacturing companies to build, although less than one-third of the land has been developed so far.
“There were choices and decisions made that helped the situation,” Maggi said. “They were basically a hand-to-mouth operation, and the COVID situation didn’t help them with the situation they’re in now.” The financial problems ultimately led the courts to recently award an $11.
193 million judgment to Independence, which prompted a sheriff’s sale to be scheduled this summer to sell the remaining 800 acres of undeveloped land. In addition to the judgment, another $3.27 million remains outstanding, including $2.
6 million owed on two separate bank loans and more than $400,000 in monthly payments to Hanover Township Sewer Authority that haven’t been sent in three years. The sheriff’s sale has been postponed twice so far, most recently because a private sale with ALTIAN Development LLC – which is located at the same Atlasburg address as Alex E. Paris Contracting – is currently being negotiated and could be finalized next month.
As part of any sales agreement, the buyer must continue to develop the remaining Starpointe property. “I have all the confidence this is the right direction,” Sherman said of the potential sale. “We’re turning the page and have a fresh new start for economic development in Washington County.
” Sahar did not have details on the private sale because it’s being negotiated between Independence Excavating and ALTIAN with little input from WCCED on the agreement. However, with the sale of Starpointe now in motion, Sahar said it will allow WCCED to focus more on its mission of assisting small businesses and start-up companies through training seminars or offering micro loans, which he thinks the organization is better equipped to handle. “We’re going in a totally different direction with small businesses.
There’s a real need (for small businesses) and there are funding sources. We just need to take care of this,” Sahar said of unloading Starpointe from WCCED’s plate. “It’s absolutely wonderful to get out from under this.
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