BRADENTON, Fla. – Port St. Lucie, Fla., asked a circuit court judge to appoint a receiver to safeguard a failed bond-financed economic development project.
The city filed an amended complaint Sept. 2 asking that a receiver review financial and business documents of The Vaccine & Gene Therapy Institute of Florida, and oversee decommissioning of the biotech firm’s property.
The city said it could not comment on the request for a receiver because of the pending litigation.
Last month, VGTI announced that it is winding down operations and plans to close by Oct. 1.
Port St. Lucie issued revenue bonds in 2010 and loaned the proceeds to VGTI to build its research facility. The city covenanted to cure any debt service reserve fund deficiency.
Some $61.9 million of debt was outstanding as of Sept. 30, 2014.
In May, the institute defaulted on a mortgage payment resulting in an unscheduled draw on debt service reserves, and Port St. Lucie filed a lawsuit in an attempt to enforce VGTI’s commitments.
On Aug. 25, the city said in a market notice to bondholders that VGTI failed to make a scheduled reserve replenishment payment, and that the city would continue to pay for any reserve deficiencies.
When asked to comment on the city’s request for a receiver, VGTI Florida president Richard Jove said the biotech firm has cooperated with the city and its advisors.
“We have sought, unsuccessfully, to negotiate an acceptable agreement on how city hall will use our confidential information,” Jove said. “As soon as city hall agrees to appropriate safeguards, we will grant access to any information they request.”
Jove contended that Port St. Lucie officials previously used information provided “in confidence” to attack VGTI in public.
City officials likely because of Florida’s broad public records laws released documents showing that VGTI requested forgiveness or restructuring of this year’s $4.2 million bond payment and that the city fund its three-year operating deficit.
“With regards to the overall decommissioning process, we are adhering with strict standard protocols and coordinating this effort with the appropriate regulatory agencies to ensure a safe and secure facility,” said VGTI spokesman Douglas Calder.
The institute is retaining a third-party consultant to validate decommissioning and work with the city to hand back the property, Calder said.
“VGTI Florida is committed to conducting a process that retains maximum value of the facility,” he added.
Port St. Lucie has said provisions have been made in the city budget to pay debt service on the bonds.
The city is also making payments on bonds it issued to assist the failed Digital Domain special effects studio, which filed for bankruptcy in 2012.