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INDEPENDENCE — Grayson County will use $150,000 from its Community Development Fund to pay back money to the Virginia Tobacco Commission owed by Universal Food and Beverage Co.
The company owned a water bottling plant in Independence before filing for bankruptcy about three years ago.
Grayson National Bank purchased the plant, located off U.S. 21, following a public auction in November.
Grayson is obligated to repay the money after Universal broke promises made in a performance agreement, which included creating hundreds of jobs.
County Administrator Bill Ring proposed a payment schedule, which includes paying $25,000 now and in June 2009, followed by $50,000 payments in July and December 2009.
If Grayson pays back the $150,000 within one year, then the state will waive the repayment of another $150,000 from the Governor's Opportunity Fund, noted Ring.
“It is very important that Grayson County not jeopardize our funding opportunities as the Tobacco Commission is crucial in our efforts for infrastructure development and economic developing funding,” wrote Ring in a letter to the commission's director of investments, Ned Stephenson.
Ring told county supervisors during a meeting Dec. 11 that Stephenson agreed to the payment schedule.
“That was an expensive lesson,” said Supervisor Doug Carrico.
“It turns my stomach,” said Vice Chairman Larry Bartlett.
Chairman Mike Maynard noted that the Virginia Tobacco Commission is “very supportive” of the area and its projects. “We need to keep our good standing,” he said.