County guarantor on failing private child care in Newark

The County went out on a limb , with coaxing from Arcadia Town Supervisor, Dick Colacino, the Wayne County Economic Development and Planning Departments and some private citizens, when they agreed to secure a $750,000 grant for the privately held Candy Apple Day Care in Newark.
The decades old day care had been in trouble financially for years and no banks were willing to give the non-profit group funding for any type of expansion.
County planners, along with Colacino, made a plea to the Board, stating the day care was essential for, not only employees of nearby Newark industrial site workers, but also for less fortunate families needing low-cost day care services.
The debated plan for the County to hold a 10 year mortgage in order to secure the grant obligations garnered comments from both sides of the issue. Should the County get involved in a helping secure a hefty loan to ensure the Newark area had a viable day care?
Former Walworth Town Supervisor, Bob Plant, said there was no way the County should be involved financially with a private business. In the end, Plant, along with current Board of Supervisor members, Kim Park of Wolcott and Ken Miller of Palmyra, were the only dissenting votes.
The County entered into an agreement for a $750,000.00 Community Development Block Grant (CDBG) administered by the New York State Office of Community Renewal (OCR) on behalf of Candy Apple Day Care, Candy Apple Pre-School and Child Day Care Center New York on August 26, 2010.
After delays in beginning the construction at the corner of Erie and West Shore Boulevards, the project got off to at best a rocky start, according to contractors.
Although the County contracted with Stu Brown and Associates for Candy Apple Day Care grant administration, contractors reported slow payments and having to “chase down” Karleen Uimonen, the day care administrator for payments.
One of the contractors, AEY Enterprises, was given the bid for site preparation and foundation. Company owner, Michael Young, said he felt that, with the County involved, he would be safe to proceed. The company did receive payments equalling 90% on the completed work, but the 10% held back for “retention” to ensure work completion, has never been paid. When he finally met with Uimonen, Young said he was told that the Candy Apple Day Care didn’t have the money and did not know how she was going to get it. This was despite the fact that Candy Apple Pre-School Center had also secured a $260,000 loan.
Young filed what is called a mechanic’s lien against the property in the amount of $6406.48. He was not the only contractor left in the lurch financially. One other company, Williams Scotsman Inc., of Baltimore, Maryland has also filed a mechanics lien on the property in the amount of $20,250. They were the company that supplied the modular sections of the building, the finished result described by local officials as looking somewhat like a one floor prison.
The mechanic’s liens are the least of the problems the Candy Apple facility has. Records show that as far back as July of 2010, the Internal Revenue Service began filing liens for unpaid payroll taxes. The first lien was for $13,415.34, another lien filed in October of 2010 was for an additional $945.16. Recently, two more Federal tax liens were filed, in February 2014 for $15,542.88 and again in March of 2014 for $15,348.08.
The Times has learned that, in addition to the liens, no payments on the mortgage itself have been made from the beginning. This may have the effect of holding the guarantor, Wayne County, liable for a sizable chunk of money.
“I knew it back then (at the beginning of the process) that we shouldn’t have done it. I’m sorry it went flop, but now the County is on the hook for this one. I’m glad I voted correctly on this one,” said former Supervisor Plant.
“It isn’t up to government, on any level, to fund this,” commented Kim Park. Besides calling for a complete audit, questions concerning the terms of the grant are also coming into question. Under the grant application, the Candy Apple facility was to guarantee to service 51% of low, or moderate income families. Park said it should be interesting to see if that criteria was ever met. Park also questioned how far behind the Center is with their payments to Reliant Federal Credit Union and utility companies.
The land the Center was built on was donated by the Village of Newark to ensure a day care facility for the local workforce. The concept was that the Center had to create at least two new jobs by December of 2015 for the 2 acres of land to be given to the project. “You have caught me with my pants down,” admitted Newark Mayor Pete Blandino when told of the financial straits the center was in. According to Blandino, the Village has the recourse of taking back the land if the original criteria of the agreement are not met.
Peg Churchill, the Executive Director of the Economic Development and Planning Department, the County Agency, along with now retired Planning Director, Sharon Lilla, initially spearheaded the project and neither could not be reached for comment.
The County Board discussed the matter in executive session at their last meeting on October 21st. Although County Administrator James Marquette would only answer questions hypothetically, he indicated that the County would only be responsible up to the amount guaranteed. In this case the guarantee is $750,000. He added that nothing has been settled yet and the Board did approve a resolution to conduct an audit of the facility.
The Resolution read:
“WHEREAS, Wayne County has a responsibility to ensure that sub-recipients of grant funds are in compliance with the terms of grants; and
WHEREAS, it is advisable to authorize an audit of Candy Apple Day Care, a grant sub-recipient; now therefore be it RESOLVED, that the Chairman of the Board of Supervisors is authorized to execute a contract with The Bonadio Group in the amount not to exceed $8,500…”
Williamson Town Supervisor/Board Chairman Jim Hoffman said he was made aware of the financial issues at Candy Apple and was waiting for the outcome of the audit to see what will happen. “Hopefully this will get resolved and they will be able to stay open,” said Hoffman.
In a written statement to the Times, Arcadia Supervisor Dick Colacino wrote:
“In response to your questions concerning apparent problems with the Candy Apple Children’s Center, I do not have a lot of information except that I believe the problems are all financial. I did and still do support the children’s center which I believe has been in business as a not-for-profit day care provider for over 36 years. They applied for and received a $750,000.00 grant through the U.S. Department of Housing and Urban Development (HUD) funds with no local matching funds required. The money was simply to be transferred through Wayne County in a pass through process. There was very little risk on the part of Wayne County. I have heard that Candy Apple has been delinquent in paying some of their invoices. To say the least I am extremely disappointed but I can understand why these problems occur when the owner has no-one to supervise the construction and look out for the consumer.
There is no doubt that Wayne County contractors could have constructed a stick built structure for $750,000 including the design and engineering cost, but I understand that Candy Apple was told they had to purchase a modular structure which appears to be (7) construction field trailers put together. Not a very aesthetic pleasing facility which would be very difficult to sell for a fair price if need be. Candy Apple had to borrow another $200,000 plus to finish the project which I believe was their downfall . Hopefully Wayne County can set up a committee to assist Candy Apple Day Care in solving their financial problems. Candy Apple Children’s Center has been a part of the Newark Community for over 36 years and has an excellent reputation for child care and early education that caters to the needs of working families in Wayne County. I would suggest that we all try to help find a solution to the problem or working families that could not find affordable child care will not be able to work and will themselves be on another form of Wayne County Public Assistance.”
Uimonen did not respond to several calls made to her office for comment on the this story.