The Associated Press
OKLAHOMA CITY — A new state audit shows that an Arkansas developer billed the city of Choctaw more than $5.3 million to develop a retail site to attract a Walmart Supercenter, but only provided detailed documentation to support about a third of its expenditures.
State auditors say the $5.3 million doesn’t include more than $1.9 million in disputed closing costs.
Meanwhile, the city, the project developer and a former Choctaw city manager are entangled in lawsuits alleging fraud, extortion and breach of contract.
Former Choctaw City Manager Robert Floyd is suing the city and project developer Choctaw Town Square LLC of Bentonville, Ark., in Oklahoma County District Court, The Oklahoman reported Saturday.
Floyd accuses the developer of successfully working to get him fired after Floyd says he blew the whistle on “inappropriate invoicing” that he believed was “illegal, border lining fraud, and not in the city’s best financial interest.”
The developer, meanwhile, has filed its own lawsuit, which is pending in U.S. District Court in Oklahoma City. The developer wants the city to pay legal expenses that Choctaw Town Square has incurred in defending itself against the former city manager’s lawsuit and alleges that the company is still owed money for some unpaid invoices.
The city of Choctaw says it would be illegal for it to pay the developer’s legal fees. It has filed a counterclaim in which it accuses an executive with the developer of charging the city an “exorbitant” closing fee of $1.9 million, instead of the $132,000 it was due.
City officials said they paid the bill under duress because they had already incurred millions of dollars in development expenses at that point and “desperately needed the Walmart sale to close” to be able to repay a large loan.
Amid the litigation, the city asked the Oklahoma Auditor & Inspector’s Office to examine developer expenditures in connection with the project.
“Unfortunately, due to insufficient evidence supporting the developer’s reported project expenditures, we were unable to conclude as to the overall allowability of development expenses,” auditors said. “Only 32 percent of developer expenses submitted by the city of Choctaw were supported by detailed documentation.”
Auditors said they asked the developer for additional documentation, but the developer refused to provide it.
Choctaw Mayor Randy Ross said he could not comment on the dispute because of the pending litigation, but he said construction is continuing on the Walmart Supercenter in Choctaw. Officials expect the roof to be put on the building in December and are anticipating an opening in April or May, Ross said.
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