FORT SMITH -- Fort Smith is suing state Sen. Jake Files and Sebastian County Election Commissioner Lee Webb, claiming breach of contract in their failed attempt to build a sports complex on city property.
The city seeks a declaration that River Valley Sports Complex Inc., composed of Files and Webb, has breached an agreement it signed with the city in 2014 to build a complex of eight tournament-quality baseball and softball fields on about 60 acres at Chaffee Crossing, former Fort Chaffee land now in the city limits.
The city wants River Valley Sports Complex to pay for any expenses the city incurs as a result of the breach, including any costs to the city if it decides to finish the complex, sell it or tear it down.
Deputy City Administrator Jeff Dingman said Tuesday that no decision will be made on what to do about the unfinished complex until the city's internal auditor finishes her investigation into what work remains to be done on the complex and at what cost. That could take weeks or longer, he said.
Files commented Tuesday by email that the suit was filed against River Valley Sports Complex and not against him and Webb personally and "we regret that the city took this path."
He wrote he could not comment on the lawsuit now based on pending legal concerns.
"We again reiterate that there was no misappropriation of funds, simply just a timeline issue," Files wrote. "We look forward to the whole story being presented in the near future."
Webb did not respond to a request Tuesday afternoon for comment.
In the deal, city directors had agreed to pay $1.6 million to Files and Webb for the project and that Files and Webb would supplement the cost of finishing the complex with donated money, materials and labor.
The city had paid out $1.08 million by the time city directors voted in February to terminate the agreement because the complex was not completed as set out in the agreement.
The city's lawsuit said that on Feb. 3, Webb and Files "formally notified the City of Fort Smith that it was abandoning its efforts to complete the Sports Complex."
The city also seeks the return of $26,945.91 in state General Improvement Fund grant money that was awarded to River Valley Sports Complex and disbursed to DiAnna Gonzales to perform work on the project.
The city says in the suit that the grant money was paid to Gonzales in December, at Files' direction, as an advance payment for trenching, installing waterlines and installing culvert pipe for an irrigation system.
"Gonzales did not complete this contracted work, and the small portion of the work which was completed was not completed to code or specifications," the suit said.
Files wrote in the email Tuesday that the grant money was funded directly to Gonzales.
"It was an agreement between the sub-contractor and the city of Fort Smith," Files wrote.
The city filed the accusations against River Valley Sports Complex as a third-party complaint in a lawsuit filed in March by contractors who claim the city owes them more than $200,000 for work they did on the complex.
The contractors, B&A Electric Co., Megehee Fence Contracting LLC, Grimes Dozer Service Inc., and James Griffith, said in their suit that River Valley Sports Complex was an agent of the city and that, as such, the city should pay them for the work they had done.
"At no time did River Valley Sports Complex, Inc., or any of its employees, officers, members or agents act as actual, implied, or apparent agents for defendant [Fort Smith] with respect to plaintiffs or any other person or entity," the city stated in answer to the contractors' lawsuit.
The contractors' viable claims against the sports complex bars them from making claims against the city as unjust enrichment, an attorney wrote for the city.
State Desk on 05/03/2017
CORRECTION: An earlier version of this story online incorrectly listed Sen. Jake Files as a former state Senator.