The Register-Herald, Beckley, West Virginia

State News

April 6, 2010

Morgantown denies inspectors harassed the Warner brothers

— MORGANTOWN — Four prominent Republican Party brothers are suing the city of Morgantown, claiming harassment and intimidation by fire and building code inspectors cost them money and helped lead to the collapse of a rental-housing empire they’d been building for decades.

Federal court records show Kris, Ben, Monty and Andrew “Mac” Warner were nearly $14 million in debt and had only $24,000 in the bank when they sued the city last month. The case was filed in Clarksburg bankruptcy court because the Warners have been in Chapter 11 for more than a year, trying to reorganize McCoy 6 Apartments LLC and Augusta Apartments LLC.

Each brother holds a 25 percent interest in the companies.

Their lawsuit claims the city was unfair in its enforcement, accusing inspectors of repetitious and excessive inspections, vague and arbitrary citations, and “harsh, unnecessary and unreasonable remediation orders” that were often delivered orally rather than in writing.

City Manager Dan Boroff said Monday the Warners’ accusations are without merit.

“To the contrary, the city has a vested interest in the success of all developments in the city of Morgantown,” Boroff said. “But they still have to be in compliance with basic safety codes.”

The city filed its response and request for dismissal Friday, denying any wrongdoing and arguing it’s immune from liability under state laws relating to inspections, law enforcement and fire protection. The city also claims any damage to the Warners was the result of their own misconduct.

The family has deep political roots, and its fortunes appeared to peak in 2004: Kris was chairman of the state Republican Party, Monty was the GOP nominee for governor and another brother who is not part of the Morgantown business ventures, Karl “Kasey” Warner, was U.S. attorney for the Southern District.

A now-deceased brother, George “Buffy” Warner, represented Monongalia County in the state Senate from 1987 to 1990, and their father, George “Bud” Warner Sr., was also a state legislator.

Mac Warner is currently seeking the Republican nomination in the 1st District congressional race to challenge incumbent Democrat Alan Mollohan.

Both sides acknowledge that for years, the Warners had a productive partnership with Morgantown.

Warner attorney Ed Kohout says his clients don’t know why things suddenly became adversarial.

The city has supported the Warners’ efforts to revitalize run-down neighborhoods like Sunnyside, an area near West Virginia University that’s dominated by student housing.

Boroff said the city created a tax-increment financing district and issued TIF bonds for one Warner project, sought $5 million in state economic development funds for the proposed but never built Square at Falling Run and employed a rarely used zoning tool to facilitate the brothers’ developments.

Boroff said he met more than a dozen times with investors and potential partners, praising the brothers for coming up with good projects.

“The city has been appreciative of the economic initiatives they generated,” he said, but that doesn’t waive the obligation to construct and operate safe buildings.

The lawsuit names Boroff, former fire chief David Fetty, city engineer Terry Hough, and several deputy fire marshals and code enforcement officers. It claims the collective harassment began in mid-2006, when the Warners undertook construction of a 296-bedroom apartment complex called The Augusta.

The city’s conduct delayed completion of The Augusta and cost the Warners more than $500,000, the lawsuit says. The decline of the companies then accelerated with the recession that began in 2008.

The lawsuit claims Fetty, who retired in February after 30 years with the fire department, created a second set of permits for building projects without the consent of City Council. That unleashed “a wave of competing and rival code enforcement agencies,” each trying to appear more strict than the other.

When inspectors failed to derail completion of The Augusta, the lawsuit contends they switched their attention to the 32-unit Mountaineer Court complex, issuing arbitrary violations, citing nonexistent deterioration of structural supports and declaring it uninhabitable.

The city jeopardized financing agreements McCoy 6 and Augusta had with their banks, ultimately forcing them to relinquish Mountaineer Court to Fifth Third Bank at a loss of more than $2 million. Within 72 hours of the change in control, the city lifted its condemnation and evacuation orders, even though conditions were largely unchanged, the lawsuit says.

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