By ARABELLA SERRATA
editor@sbnewspaper.com
San Benito City officials are accusing VARCO, the development company overseeing the construction and management of Resaca Village, an embattled commercial shopping center off of Business 77 and Sam Houston Blvd., with theft after officials say authorities noted an onsite contractor allegedly using backflow water without proper permission, according to a City-issued press release.
The press release specified that police officers noticed a coupling being used to connect to the City’s backflow pipes. According to the City, this connection allowed access to the City’s water supply. The press release indicated that the extension did not have a water meter to measure the volume of water used in a building supplied with municipal water.
The press release also included information on the ongoing litigation between the San Benito Economic Development Corporation and VARCO. The release said the City’s suit against VARCO stems from the developer’s “Continued failures over the years” on multiple fronts. The lawsuit cited alleged failure to pay base rent, failure to include the San Benito Economic Development Corporation on the insurance policy, failure to vacate the property, and accusations of being “deceptive and misleading.”
The City’s press release was distributed last week. This week, Paul Serafy, a VARCO attorney, said a judge dismissed the citation against the VARCO employee. “The allegation that VARCO, or our general contractor, stole any water is just false,” said Serafy.
“Once VARCO became aware of the claims, they immediately inquired about them with the site superintendent who reported that the subcontractor used the backflow only once. It had previously not been used. VARCO will remedy this one-time occurrence,” reads a VARCO press release.
The release also states that VARCO has invested $10M into the Resaca Village project and continues to create new jobs for the San Benito area. “Contrary to the City’s press releases, and statements from San Benito officials, Resaca Village has provided the City with proof of insurance where the City is named, financial statements, and owes no taxes or rent to San Benito,” the release notes.
This latest allegation is just one in a series of volleys between the City/EDC and the developer rooted in the Resaca Village development deal which began in 2018. That year, VARCO commenced construction on Resaca Village. When COVID struck, VARCO representatives asked for a series of extensions to complete the project. Those extensions were granted by the EDC board, but by its last extension, the City’s patience was pushed to the limit and forced VARCO towards completion of the project or risk losing control of the shopping center to the City/EDC, at which point, VARCO filed suit against the City.
Noting that VARCO was in violation of its terms of its contract with the City and that the last extension wasn’t ratified by the City Commission, the City ultimately countersued.
“We think we are entitled to finish the construction,” said Serafy, adding that the City Manager has a Stop Work Order [SWO] on the project. Serafy went on to say that the order is keeping the contractor from continuing construction on the project.
“We can’t get an answer from them about why they have issued a Stop Work Order. We’ve done everything they asked us to do,” said Serafy.
He also reported that he had sent members of his team to meet in person with San Benito City Manager Fred Sandoval to no avail. For his part, Sandoval went on record with Houston-based investigative reporter Wayne Dolcefino last week and said that EDC board member Jose Morales was sent by official to speak with VARCO regarding these issues on the onsite of the matter, not to shake VARCO down as Dolcefino suggested in one of his controversial video segments.
“I think we’re going to have to pursue this with the courts. I think we’ll prevail with our lawsuit. The facts are on our side here,” said Serafy, who added that the one thing VARCO has not done was re-negotiate the agreement, which he believes is what the EDC wants.
“We have a valid and binding contract with the EDC, and we are performing on that contract,” said Serafy, later criticizing the EDC, saying its representatives have done, “absolutely nothing” to help VARCO with development.
“We’re doing what the EDC should be doing, but dosen’t want to do,” alleged Serafy. “We really want the City to allow us to resume our work. We think that all of the obstacles that have been put in our way have been manufactured for political purposes that have nothing to do with us. We’re doing everything we’re supposed to be doing, but the City and the EDC just keep on getting in the way of progress. I think everyone in the City needs to know about that.”
The NEWS attempted to speak with an attorney representing the San Benito EDC, however, received no response as of newspaper deadline Thursday morning. A direct message was sent to Sandoval but was unanswered as of the time of this publication.
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