City of Fort Smith loses $200,000 jury verdict in River Valley Sports Complex lawsuit

by Aric Mitchell (amitchell@talkbusiness.net) 588 views 

Eleven of 12 jurors ruled against the city of Fort Smith on Tuesday night (Sept. 11) in a lawsuit involving the River Valley Sports Complex (RVSC) and adjudicated before Sebastian County Circuit Court Judge Stephen Tabor.

Total jury awards were close to $200,000, to be paid to B & A Electric ($151,880), Megehee Fence Contracting ($14,926.08), Grimes Dozer Service ($12,977.50), and James Griffith ($20,337.50). On a fifth question, the jury ruled unanimously in favor of the RVSC, absolving Lee Webb of financial obligations to the repayment of the four contractors. However, the jury did not find the city engaged in “unjust enrichment” (i.e., it did not benefit from services it had not paid for).

Webb said he would have more to say at a later time but chose not to make a comment to the press following the verdict.

Fort Smith City Administrator Carl Geffken called the decision “disappointing” and said he would be discussing the city’s options with attorney Mike Jones before bringing any further recommendations to the city’s Board of Directors.

“It’s disappointing in so far that this was a project that was brought to the city, that was supported by the majority of the directors, that Jake (Files) and Lee (Webb) had told the directors they would raise the money above and beyond the maximum of $1.6 million in which to build the River Valley Sports Complex, and we trusted them and took them at their word.”

Geffken noted “there was a close working relationship” during the trial between attorneys representing Webb and attorneys representing the contractors, who argued separately the city was the party responsible for breaching contracts.

“It is what it is. It’s unfortunate that that’s the case — that the city is now yet again seen as the source of nearly $200,000 to pay the bills for what was, in my opinion, the responsibility of Jake and Lee,” Geffken said.

As for the future of the RVSC, the city has released a request for proposals, “this time to do it properly,” Geffken said. “(Deputy City Administrator) Jeff (Dingman) has been working on this, and I believe he’s received a proposal. We want to do this properly — do the RFP, work through responses, and if nothing can come of that, then as I’ve been saying since the beginning of the year, I will be making the recommendation to the Board to return the property to the Fort Chaffee Redevelopment Authority and say, ‘Thank you for your kindness,’ but, how do you put it, ‘the road to Hell is paved with good intentions’?”

Geffken said organizations had been expressing interest to complete the project “or to do different things with the RVSC (property).” Geffken said an analysis the city ordered from Morrison-Shipley Engineers suggested the two concession stands contractors had built needed to be demolished. “So, at this point, it’s looking to say, what would somebody through a professional, correct RFP want to do with that land for the city, and then how can we work together in an arrangement that we thought we had with River Valley Sports Complex, Inc.?”

Discussions with Webb and Files to build the RVSC began in 2012 but the city did not enter into a partnership until 2014. Acting on the recommendation of Fort Smith City Administrator Carl Geffken, the Board of Directors nixed the plan effective Jan. 31, 2017 after more than two years of delays on the project, which was expected to cost the city just $1.6 million for the construction of eight tournament-quality softball fields, two concession stands, and associated parking.

Files, a former state senator from Fort Smith, and Webb, a Fort Smith businessman, had planned to use private construction and in-kind donations to finish out the project. They billed the city for completed work, utilizing $1.08 million of the $1.6 million commitment by the time the city ended the relationship. Files pleaded guilty to wire fraud, money laundering, and bank fraud and received an 18-month sentence in June.

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