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Failures, lawsuits part of VR Laboratories director's past dealings

Dec. 22, 2012
VR Labs director Robert Gow.
VR Labs director Robert Gow. / Lindsay Terry/
Construction is complete in the bottling facility for VR Labs but equipment is required to make the building functional at the Alico Road Business Park. / Kharli Rose/Special to


Robert T. Gow portrays himself as an accomplished entrepreneur who’s not involved in the day-to-day workings of health drink company VR Laboratories Inc.

But it is his impressive resume that shows on VR Labs’ website and he was involved in negotiations with Lee County for a $5 million job stimulus grant, which VR received in February 2011.

Gow is a director of VR and also chairman and founder of HerbalScience, which has licensed its technology to VR to create the health drinks. The two companies share a suite of office space leased by HerbalScience in Bonita Springs.

A News-Press search of public documents stretching back 40 years didn’t turn up traces of some of those accomplishments.

But Gow, 72, said he created three corporations in Delaware or Virginia in the early 1970s he built up to $100 million in revenues within two years.

What the record shows is a 30-year real estate career in the Norfolk, Va., area marked by some failures, lawsuits and an IRS investigation that cost him and his wife Kay Gow, now chief administrative officer of VR, $158,628 for under-reporting $793,147 in income from 1989-1992.

Now, two years after the original VR Labs grant application by Kay Gow, the company’s building in Alico Road Business Park has stood empty and dark since last summer even though $4.7 million of the grant is gone – mainly for fitting out the leased structure as a bottling plant.

VR faces a lawsuit by its landlord because no rent has been paid and because of liens from its general contractor and a subcontractor in a dispute over work not paid for.

County officials are concerned that so far VR has not documented any capital expenditures of its own and only 12 jobs have been created. The company’s lawyer has said VR has put in about $4 million in private investment into the company.

County Commission Chairman John Manning said the commission extended VR’s deadline schedule for creating new jobs, but the county is having trouble getting verification from VR for the jobs it lists at present. “If we have to keep asking for information we’re contractually entitled to, that’s not a good sign.”

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County Economic Development Director Jim Moore, who approved the grant application, said he’s not familiar with Gow’s past business dealings and “I’m not willing to judge” on the basis of what he may have done.

Moore said he did not look into the Gows’ past business dealings.

Gow’s resume on VR’s website shows that “Prior to his entry into real estate and financial services, Mr. Gow was the founder of several successful enterprises; an independent refined petroleum trading company, a major barging operation on the Mississippi River, and a coal transport business. Mr. Gow built each of these start-ups into companies with $100 million in revenues within two years.”

According to the resume, that would put Gow’s founding of those projects prior to 1983, when he started developing the Powhatan and Green Springs time share condominiums in Williamsburg, Va., in 1983.

Virginia businesses

Gow said he formed the corporations in Virginia or Delaware in the early 1970s to establish a lucrative business providing coal and petroleum products. He had sold them by the mid-1970s, he said.

What can be documented is Gow’s efforts in the real estate business in the Norfolk area in the 1970s before he started developing the time shares.

Some of the concerns raised by officials in Chesapeake, Va., that helped scuttle a 1977 proposal fronted by Gow, are similar to those being expressed about VR.

According to reports in the Norfolk Virginian-Pilot, Gow was vice president and main spokesman for a start-up company, Columbia Development Corp., that persuaded the city council of Chesapeake to make an outright gift to the company of $3 million in excess tolls from the Jordan Bridge over the Elizabeth River.

In the proposed deal, the city would acquire the property from an independent nonprofit bridge authority and sell it to Columbia, and also would give Columbia $3 million of surplus bridge tolls.

Columbia, in exchange, would use up to $100 million in bond money approved by the Chesapeake Industrial Development Authority to rejuvenate a 22-acre site in a run-down, heavily polluted industrial area.

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Gow promised the city he had investors and tenants who would help him create a pottery factory, an exotic animal breeding facility, a tropical fish farm, a 350-slip marina and a 310,000-square-foot farmer’s market and shopping mall that included a pier for cruise ships.

The project was tentatively approved by the city council and development authority.

But city officials balked at one provision: Chesapeake would lease the entire property from Columbia and sublet to the actual tenants in order to make the bonds more attractive to investors.

The project’s success would be insured by a $600,000 insurance policy paid for from the bonds.

Project causes controversy

Although the city’s economic development director initially insisted throughout there would be no downside, Mayor Marian Whitehurst and other city officials continued to express concerns the city would face possible liability of up to $25 million and a hit to its own bond credit rating if the project went south.

The deal fell apart in January 1978 as Whitehurst and others continued to question the level of city liability.

According to newspaper accounts, Gow was abruptly dismissed in January from the company by its president, Manassas, Va., developer Charles W. Rector, after information came out about Gow’s business background – including the fact he was being sued by Virginia National Bank for garnishment to satisfy a $30,000 loan.

Rector, who had worked with Gow in 1975-76 in unsuccessful attempts to do waterfront developments in neighboring Portsmouth and Norfolk, then withdrew Columbia’s offer and the deal was off for good.

Court records show Gow’s garnishment problems with the bank weren’t resolved until 1987.

But Gow insisted Friday that despite Rector’s public statements, that’s not what happened.

“Rector did not fire me,” he stated, although he acknowledged seeing the press accounts of Rector’s comments.

Actually, he said, the dismissal came because of the negative statements about the project being made by bridge authority staffers worried about losing their jobs.

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Also, Gow said, “the difficulty of finding tenants” for the heavily polluted location was a factor in his leaving and the subsequent demise of the project.

However, the authority was dissolved in August 1977, five months before the project ran into serious problems. Gow offered no explanation for the discrepancy.

IDA chairman H. Leon Hodges, who withdrew his support after doubts started to surface, said last week the project was never a good idea for what was proposed. “It wasn’t fit for anything like that. It’s an industrial area.”

Hodges said that in general, he learned through his work with the IDA it’s only good for the city to work with private developers who have capital to back their projects.

“Chesapeake’s a great place to locate a business, but if you come here with hat in hand, I advise you to have some money in your pocket,” he said.

By the time the deal was killed, the city had taken title to the bridge and land in a friendly transfer of ownership from the authority and the situation did not end well for the bridge, said local historian Raymond Harper, author of a book on Chesapeake’s history.

The independent bridge authority had been taking good care of the bridge, he said, but when the city took over the same standards weren’t met. “The bridge started rusting, and eventually heavy vehicles could not go across safely.”

The bridge was closed permanently in 2008 and torn down in July 2011. It was replaced by a new bridge this year.

No development ever took place where Gow’s project was to have been built. The land is a city park now.

It’s a nice park, Harper said, but even that use is limited.

“I would not eat the fish from there,” he said.

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