LOCATION: Based in a suite of offices in Bonita Springs with a newly constructed production facility at Alico Road Business Park in south Lee County.
PRODUCT: The company makes health drinks using proprietary processes licensed from Naples-based Herbalscience Inc. Four drinks are available for purchase at VR’s website with another eight listed there but not yet in production.
LEE COUNTY CONNECTION: The company was given a $5 million grant by the county in February 2011 under the First Incentive Award program in exchange for agreeing to set up an operation here that eventually would bring 208 high-paying jobs to the county by 2016.
CONFLICT: VR’s contractor, subcontractors and landlord say the company has failed to pay what’s owed to them.
Lee County’s attorney is investigating Bonita Springs-based VR Laboratories, which has spent $4.7 million in taxpayer money on its now-stalled high-tech production facility.
The state attorney’s office also is reviewing documents and the company is facing a lawsuit by its contractor, along with liens and threatened lawsuits by disgruntled business partners.
VR Lab’s CEO, former Lt. Gov. Jeff Kottkamp, dismisses the problems as minor issues being exacerbated by a dispute between his company and the general contractor, GCM Contracting Solutions, over who’s responsible for paying about $750,000 owed to subcontractors.
“This will all be resolved,” he said, and the company will fulfill its promise to bring 208 high-paying jobs in exchange for the incentive money.
But VR’s business partners say otherwise:
• GCM and nine subcontractors say they’re owed a total of about $950,000 for work they’ve done.
• VR’s landlord, Alico Road Business Park LC, says VR owes a month and a half rent dating back to when the building received its certificate of occupancy. Bjorn Rosinus of Alico Road Business Park wouldn’t say exactly how much that is, but at the park’s advertised lease rates it adds up to $24,300. Rosinus said he turned over the matter to his attorneys after VR didn’t respond to requests for payment. Kottkamp said the rent is GCM’s responsibility until the plant is up and running.
• VR subcontractor Williams Specialty Bottling Co. has a $1.25 million contract with La Porte, Ind.-based A Packaging System for a bottling production line. The county has paid VR $2.4 million for bottling equipment, but only a small amount of the equipment has been delivered to the plant. Kottkamp said he can’t install the equipment because GCM owner Robert Brown won’t let him in the building, which Brown denies.
A Packaging System attorney Nicholas Otis declined to comment, but a lawsuit filed by contractor GCM on Friday against Williams Specialty and VR Chief Administrative Officer Kay Gow states Williams has only paid $900,000 of the $1.25 million it owes and “as a result of the non-payment of the full amount, the manufacturer, A Packaging has refused to deliver and install the bottling line and equipment until payment is made to them.”
GCM’s suit also alleges VR and Williams “have refused to identify where the full amount of $2.4 million was allocated, which was specifically designated for the payment for the bottling line and equipment.”
VR is one of six companies to receive money from Lee County’s FIRST program, which was designed to diversify the local economy and attract higher paying jobs. It was initially funded with $25 million approved by the county commission.
Records obtained by The News-Press in a public records request show GCM fronted the payments to Williams and to other subcontractors. Then GCM would bill VR, which drew the money from the county grant and paid back GCM.
“I don’t know what’s happened between them (A Packaging) and Williams,” Kottkamp said. “It’ll get resolved.” Williams could not be reached for comment. Gow said “I’m unaware of any lawsuit, so I have no comment.”
The county attorney is investigating the dispute over the money, according to County Commissioner John Manning, who said all the commissioners have been briefed on the situation “as well as what happened to the money that’s already been invested in VR Labs.”
Amira Fox, head of the special prosecutions unit of the 20th Judicial Circuit State Attorney’s Office, said her office will be reviewing documents involved in the investigation. That is “our only involvement at this time,” she said.
GCM’s lawsuit also states VR Labs “apparently had no operating capital from which to make construction payments or even provide a construction deposit.”
Kottkamp said there’s nothing to worry about. He wouldn’t talk about money directly but scoffed at the idea VR is insolvent.
“We’re operating every single day,” he said. “Did you get to the website and see the products we have to sell?”
VR contracted out the bottling while it waits to get into its new plant here, Kottkamp said. “We’re ready to roll.”
County Commissioner Tammy Hall said she’s been looking into the situation and has concerns, but “We still have an agreement that VR hasn’t defaulted on” because it’s met all deadlines for providing jobs and capital.
The important thing, she said, is to make sure the program continues to bring new companies with high-paying jobs to offer.
“People should be able to have a job here and not have to rely just on tourism and construction,” she said. “We’d like people to have options and have that balance in the community.”
Bonita Springs-based Pamela Grothaus said she believes Lee has a problem keeping its spending under control and the issues with VR Labs may be a symptom.
“Just in general I think our money could be spent more wisely and effectively at the county level,” said Grothaus, a former citizen member of The News-Press editorial board.
Connect with this reporter: @DickHogan (Twitter).