By AYLEEN CANIZALES
San Benito NEWS
VARCO, a local real estate company, has decided to move forward with a lawsuit against the San Benito Economic Development Corporation (SBEDC) over the Resaca Village project and the termination of their Performance Agreement, a cooperate spokesperson informed the NEWS Wednesday afternoon.
The SBEDC and VARCO entered into a Performance Agreement in November 2018 after receiving grant funding in 2013 to purchase land for developing a commercial plaza.
Construction for the Resaca Village project began in March 2019 with a scheduled four phases of completion. The set deadline on the original Performance Agreement was scheduled for December 31, 2022. The lawsuit, which was obtained by the NEWS, indicates that phases one and two were completed ahead of schedule; however, due to the effects of the COVID-19 pandemic, construction efforts were stunted.
In response, both VARCO and the SBEDC agreed to a series of amendments that extended VARCO’s deadline for completing phases three and four. The final and fourth amendment noted that April 31, 2024 was the set deadline for phase four.
Paul Serafy, VARCO’s Managing Director and General Counsel, said that two city commissioners and the mayor of San Benito, at the time, were present during the approval of the fourth amendment by the SBEDC in November 2023 “with no objections” verbalized.
Despite this, in March 2024, the SBEDC insisted that VARCO was behind schedule, in violation of their Performance Agreement and demanded that VARCO refrain from further construction and turn over Resaca Village to the SBEDC, according to VARCO.
According to the lawsuit, the SBEDC made no attempt to reimburse VARCO for the over $8 million invested into the project, instead demanding that VARCO pay an additional $1.8 million. Serafy, when asked to confirm the damages VARCO is seeking, said that due to the amount they had invested into the project, they are planning on suing for upwards of $10 million.
In response, the City of San Benito issued a written retort on May 1, 2024, stating that as of now, neither the City of San Benito nor the SBEDC have been served with any lawsuit.
The City’s press release continued to read that the terms of the agreement between the SBEDC and VARCO were not met, thus leading to action by city leaders to prevent taxpayers, “suffering penalties.” The City of San Benito concluded the press release stating that the City plans to continue the project and will do so either through the City or through other partners.
Serafy, when asked about not having yet served the SBEDC with the lawsuit, stated that VARCO was hoping to resolve the issue outside of court. However, once reading the press release by the City of San Benito, Serafy stated that plans to move forward with the lawsuit will be occurring “very soon.”
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