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Wednesday, 16 November 2011 21:25

Imperial Hotel caught in civil suit over unpaid building materials

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The Imperial Hotel in Canton has become entangled in a legal battle as a result of unpaid bills by a contractor.

Haywood County Builders Supply has filed a civil suit and lien against the hotel, owned by outgoing Canton Mayor Pat Smathers. The claim states that Smathers and his contractor Gary Cochran failed to pay for $29,084.93 in building supplies, such as lumber, paint, flooring, doors and nails. The supplies were used to renovate the old Imperial Hotel, which was built in 1911.

“It is what it is. I don’t agree with it,” Smathers said, adding that he didn’t want to “lambast anybody.”

Smathers said that the problem is between the contractor and Haywood Builders. Smathers said he paid Cochran for the cost of all the materials.

“Everything has been paid to the contractor,” Smathers said.

However, Cochran said Smathers still owes him money, and as a result he hasn’t been able to pay his bill with Haywood Builders.

Haywood Builders fronted the supplies and materials to Cochran for the job. Cochran would then wait to get paid by Smathers before paying the invoice with Haywood Builders.

“I paid as I got reimbursed,” Cochran said. “There is still money outstanding.”

To help cover the cost of the renovations, Smathers got a $90,000 grant from the North Carolina Rural Center to renovate the Imperial Hotel. It was a one-to-one matching grant, requiring Smathers to spend $1 of his own money for every $1 he got in grant funds.

He’s spent most of the money, according to the Rural Center. As of Nov. 10, the remaining grant funds totaled about $4,000.

The Rural Center also awarded Smathers a previous $25,000 grant for architectural and engineering plans.

Cochran said the grant process created a cash flow quandary. Bills for labor or materials must be paid for first and only then could he be reimbursed for the costs.

The grant money came in “slower than I ever thought,” Cochran said.

The county, which had to sign off on the grant and act as the fiduciary manager, requires both invoices and cancelled checks from Smathers before submitting an application to the Rural Center for reimbursement from the grant funds. Then, the center must process the application prior to reimbursing the money. This procedure can take several weeks.

Haywood Builders has also filed a civil suit against Cochran and Smathers. According to the suit, Cochran owes the building supply company an additional $186,954.96, plus interest and fees, for other projects.

Cochran said he sat down with Haywood Builders and tried to work things out many times but was unable to work out a payment plan.

“It’s been a downturn in the economy,” Cochran said. “We’ve been down for the last couple years.”

Last year, Haywood County issued 172 building permits for privately owned housing units — compared to 366 in 2008, according to data from the U.S. Census Bureau.

The firm representing Haywood Builders declined to comment.

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