Martinsville considering options for paying back $800,000 state grant for proposed medical school

School's business model change prompting state to request grant be returned

By Colter Anstaett - Southside Bureau Reporter

MARTINSVILLE - It now appears the city of Martinsville will have to pay the state nearly $1 million for a proposed medical school that continues to be delayed.

The Tobacco Commission gave the city $800,000 for the project, but now wants the money back.

Speaking to Martinsville Mayor Gene Teague Friday, he said it is his understanding that the commission is asking for the money back primarily because the school has changed its business model from for-profit to nonprofit. So the medical school will now not generate any tax revenue.

City leaders planned to sit down with the commission members and the president of the medical school, Dr. Noel Boaz, within the next 30 days to begin discussing options.

Sometime in the next 30 days, the Tobacco Commission is expected to formally notify Martinsville city leaders of the commission's decision to request back the $800,000 grant the commission gave to the city in 2015.

Once the city is formally notified by the commission, the city will have 30 days to pay the money back unless an alternative can be reached.

"My understanding is, the Tobacco Commission has been very patient with communities," Teague explained.

Some communities have been allowed to pay back money over a five-year period.

The city will also consider trying to substitute another project for the medical school.

Jessica Snider, owner of Buthchers and Brew, said she is concerned that if the money has to be paid back the city may raise taxes.

"That would be detrimental to us as business owners. Because as a new business, you cut corners and try to save every penny that you have and the taxes that are already imposed on us are astronomical," said Snider.

One customer at Butchers and Brew, Terry Gross, said while having to pay back the money is not ideal, it won't bother him as long as the city spreads out the payments.

"As long as it's spread out and doesn't impact the taxpayers too much," Gross said. "That's probably the only way they're going to get it paid for."

Boaz, the man spearheading the medical school project, said in an interview earlier this year that he has already spent the grant money trying to get the school open, meaning the city will be on the hook if he can't pay back the grant.

WSLS reached out Friday to Boaz and local state delegate Danny Marshall, who sits on the Tobacco Commission, but did not get a response.

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