Martinsville City Council authorizes use of government funds to pay back $780,000 in Tobacco Commission grant funds for failed medical school

MARTINSVILLE, Va. (WDBJ7)-- Tonight, Martinsville City Council decided it will be using $780,000 in government funds to pay the tobacco commission back after a failed project.
In 2015, Martinsville was issued a grant to go towards a medical school, but after exhausting the grant, the medical school still struggled to open.

In late 2014, local Doctor Noel Boaz started talking to City Council about his idea for the College of Henricopolis School of Medicine. Dr. Boaz presented to the city on multiple occasions and many said it sounded like a good idea.

“Everything seemed to fit. And that was a risk that we took,” said Leon Towarnicki, City Manager.
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The proposal said the college would create jobs and boost economic development in the area. Martinsville signed on, allowing the project to qualify for an $800,000 grant from the tobacco commission.

Some of that money was used to get the building prepped, but as time went on the additional funding needed was not there. Because of those funding hurdles, the project no longer met the qualifications and benchmarks for the grant, and now the city is stuck with the repayment process.

“It's an unfortunate situation that we find ourselves in and we're not happy about having to pay the money, but all economic development projects have risk,” said Mayor Gene Teague.

In September, the city had a conference call with the commission and it became clear that the city would have to be the ones to pay it back. They agreed upon a payment plan that City Council authorized Tuesday. Martinsville will have to pay back $780,000, because of a $20,000 credit, over five years: $156,000 a year.

“It may be that instead of being able to spend an additional $156,000 in capital-or maybe even paving type projects….that money might have to be reallocated to repayment,” said Towarnicki.

The city says it is not clear how the original $800,000 was spent. They have issued a letter to Dr. Boaz to answer specific questions, but the mayor says he did not answer all inquiries directly.

They will now issue a summons through the circuit court for him to answer more in depth.

“The questions are about what did he do with the money, give us some specific information that we don't have,” said Mayor Teague.

WDBJ7 did reach out to Dr. Boaz, but he declined to comment at this time.