Lee attorney wants to negotiate solution with VR Labs, not find it in default

Michel Fortier/Staff 
A panoramic view shows the back of several buildings located in the Alico Road Business Park, with one being leased by VR Labs. The plant remains mostly empty. The pharmaceutical plant is entangled in a legal squabble.

Photo by MICHEL FORTIER, Naples Daily News // Buy this photo

Michel Fortier/Staff A panoramic view shows the back of several buildings located in the Alico Road Business Park, with one being leased by VR Labs. The plant remains mostly empty. The pharmaceutical plant is entangled in a legal squabble.

According to Jeff Kottkamp, the CEO of VR Labs, delays in the opening of the pharmaceutical plant are due to a squabble with the general contractor and will soon be resolved shortly. The building, located off of Lee Road south of Fort Myers, sits mostly empty.

Photo by MICHEL FORTIER // Buy this photo

According to Jeff Kottkamp, the CEO of VR Labs, delays in the opening of the pharmaceutical plant are due to a squabble with the general contractor and will soon be resolved shortly. The building, located off of Lee Road south of Fort Myers, sits mostly empty.

Jeff Kottkamp

Jeff Kottkamp

Lee County commissioners meet Tuesday beginning at 9:30 a.m. in commission chambers in the county government building in downtown Fort Myers.

— Lee County commissioners will be asked today for direction on how the county attorney should deal with VR Labs, with its promised bottling plant still sitting dark and mostly empty after the start-up company spent millions in taxpayer money to outfit it.

Lee County Attorney Michael Hunt is recommending against finding VR Labs in default of the agreement that gave the company a $5 million county grant to build out the plant at an industrial park off Alico Road, in south Lee County.

The company has blamed the delays in opening its plant on the general contractor — GCM Contracting Solutions — which has filed a construction lien on the property and a lawsuit against Kay Gow, the chief administrative officer for VR Labs, and the bottling equipment contractor in Lee Circuit Court, accusing them of deceptive and unfair trade practices and civil conspiracy.

The company, using another bottler, is making all-natural V!ah beverages that promise to make those who drink them healthier. To date, the company has developed more than two dozen new products.

Hunt will present six options for dealing with VR Labs, including terminating the county's grant agreement with the company, which he's not recommending. His top recommendation is for the county to choose a liaison to arrange a meeting with the attorneys for the GCM and VR Labs to try to "address and perhaps resolve issues of common interest to all parties."

Commission Chairman John Manning questions whether that's the way to go.

"I don't think that's an appropriate process to go by if there is a private lawsuit going on," he said.

On Monday morning, he said he hadn't seen the attorney's recommendations yet.

"This is an issue that's rather old and we are working very diligently to get this thing resolved, but until the lawsuit is resolved there is not a lot we can do," he said.

If county commissioners don't choose his first option, Hunt suggests the county wait out a mediation attempt between the two companies and approve an extension of the company's job creation requirements by a year if VR Labs asks for one.

Hunt suggests a proactive, but cooperative approach is needed to protect the county's interests.

"Terminating the agreement at this time would almost assuredly not resolve any of the county's issues associated with the short-term and/or long-term fiscal solvency of VR Labs, and would in all likelihood prevent the county from working in a cooperative and reasonable manner with VR Labs," he writes in his memo.

Under the agreement, he said the county's remedies are limited now, if based strictly on a breach of contract by VR Labs.

He said if the county is too aggressive and takes legal action against VR Labs, it could prompt a countersuit.

The legal squabble between VR Labs and GCM prompted Hunt to launch his own investigation into the company a few months ago.

As part of his investigation, Hunt found that VR Labs failed in its annual report this year to include enough information to verify the number of employees and wages — and that its report appeared to be incomplete in showing how much of the company's own money has been spent on the plant.

Kottkamp couldn't be reached for this story. In a past interview, he said the company has met all guidelines of the county's $5 million grant by filing the required progress reports and answering all questions it has to under the county's flexible guidelines.

In a letter to Hunt on Nov. 23, Edward Cheffy, the Naples attorney representing VR Labs, emphasized the company is "proceeding successfully and robustly with the development and introduction of products." He said "every penny" of the grant paid by Lee County has gone to the general contractor and that it's the general contractor that's responsible for the appropriate spending of that money.

The company "unequivocally and completely" rejects claims that a default has occurred, Cheffy wrote.

VR Labs has been reluctant to provide W-2 forms or any written records about its employees that contain personal and private information, which the county attorney has requested.

The company also has been unable to provide a timeline for the completion and opening of the plant, saying it's not possible until disputes with the contractor and subcontractors are resolved.

Robert Brown, GCM's president, said the building has been complete since June, except part of the bottling line's equipment hasn't been delivered because VR Labs hasn't paid for it. He contends there is a missing $1.5 million from the county grant that should have been used to buy the rest of the needed equipment. Through its lawsuit, GCM seeks VR Labs' bank records.

"I believe it costs less money for them to pay their attorney than to actually move into the building," Brown said. "So we are standing by the fact that we know they were out looking for funding and they must not have found any yet."

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