Cody Creek fires back at county

Local business files counterclaim for $25,000

By Andy Winemiller - [email protected]

DOBSON — A local business owner is firing back at Surry County in a lawsuit regarding economic development incentive funds, claiming he was treated unjustly.

In October the county began pursuing $203,754 in damages from Cody Creek and Fred Snow Jr., owner of the business south of Dobson. The suit arose from a 2010 project which carried water and sewer services to the restaurant and banquet hall.

In short, county officials relied on a grant from the N.C. Rural Center, which now falls under the N.C. Department of Commerce, to pay for a portion of the project. The grant agreement promised Snow would create 21 full-time jobs at or above minimum wage for two consecutive quarters.

The county applied for and received the grant. Thus, it is liable to pay back any funds which are the result of Cody Creek not holding up its end of the bargain.

An agreement, separate but related to the grant, between Cody Creek and Surry County states Cody Creek will reimburse the county for any funds it must pay back that are the result of unkept job-creation promises.

Neither agreement was of much concern until Commerce took over the Rural Center. The department audited Cody Creek, and determined none of the 21 jobs had been created.

The commerce department informed Surry County, the grant applicant, it was on the hook for the more than $203,000. The county issued the check to commerce, and sought relief, based on its agreement, from Cody Creek.

As previously reported, Snow is adamant he created all 21 jobs and more. He also claims the county treated him unfairly when he opted to build a banquet hall on Cody Creek grounds, the situation from where the entire dispute begins.

Unjust treatment

According to Snow’s counterclaim in the case, Surry County determined Cody Creek’s private well and septic system had enough capacity for a new banquet hall. In 2002 the county issued the building permit.

“After construction commenced, Plaintiff Surry County arbitrarily and capriciously reversed its previous decision and required Defendant Cody Creek to obtain additional water and sewer capacity,” reads the counterclaim. “At the time of this decision, construction of the banquet hall was approximately 75 percent complete.”

“Cody Creek advised Plaintiff Surry County that the facility would not be serving three meals per day, seven days per week. Rather, the facility would be serving a maximum of three to five meals per week,” explains the amended counterclaim.

“Thus, the defendants requested that the water and sewer requirements be prorated…Surry County refused to allow the Defendants to prorate the water and sewer requirements; instead, requiring that the Defendants construct an additional five miles of tail line to the sewer system.”

“Defendants have now learned that Plaintiff Surry County on many other occasions, allowed churches, daycare facilities, wineries, schools and other corporations to prorate the water and sewer capacity required when a facility was not used for three meals per day.”

The tail line requirement put Cody Creek in a position in which it wasn’t economical to construct the tail line necessary, according to Snow. However, a building, which was 75-percent complete and unusable, stood on the property.

It was then that Snow was approached by Surry County officials who sought to run water and sewer lines to his property, states the court documents. They advised grant monies from the Rural Center and other entities were available to aid in the endeavors.

Snow was also required to allow the town of Dobson to annex his property, and Cody Creek paid $107,000 toward the project’s cost.

The bookkeeper

While Snow was taking care of the water and sewer issues, another issue was brewing at the business. According to court documents, Cody Creek bookkeeper Cheryl White was reporting different tax and wage figures to the Department of Revenue and the Department of Commerce.

The documents allege the differences in White’s reported numbers were the result of continued attempts to conceal the fact she was embezzling money from Cody Creek. White has been criminally charged for the alleged embezzlement.

In an interview, Snow said there’s no doubt in his mind his allegedly crooked bookkeeper’s crimes in part caused a misunderstanding as to how many jobs had been created.

However, Snow also said he and his wife went back through records to clarify any unclear matters and correct any purposeful or accidental mistakes in the books.

The jobs

Snow said he absolutely created the 21 jobs at his business. He claims the issue is the result of the commerce department’s definition of a “job.”

According to Snow, Cody Creek didn’t hold 21 additional full-time employees for the necessary six consecutive months. However, the positions were available and filled with different people, which Snow contends is allowed.

Snow said he offered to go to Raleigh with county officials to sort the matter out. However, he said he saw his government quickly throw in the towel in the fight against Commerce, but it was quick to act in its attempts to collect from his business.

In his counterclaim and answer Snow contends Surry County had no legal obligation to return any funds to the Commerce Department. The counterclaim simply states Cody Creek complied with its agreement and owes nothing.

“Surry County has failed to exercise reasonable diligence and ordinary care to minimize its alleged damages.”

The repercussions

If Surry County is victorious in its legal action against Snow, the county will collect $203,754 from the local business owner.

Snow’s counterclaim asks the Surry County Superior Court to award him $25,000 in damages, plus attorney’s fees.

“The Defendants have suffered actual damages in an amount in excess of $25,000 as a result of the violation of their civil and constitutional rights by Plaintiff…”

County Attorney Ed Woltz has indicated the lawsuit is in the early stages of discovery, with both sides gathering and evaluating information, documents and possible evidence.

A hearing on a “motion to compel,” likely associated with the discovery process, was on the court’s calendar this week. However, the hearing was continued until the April term of Superior Court.

Local business files counterclaim for $25,000

By Andy Winemiller

[email protected]

Andy is a staff writer and can be reached at 415-4698.

Andy is a staff writer and can be reached at 415-4698.


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