MORGANTOWN – On June 27, 2022, WVU Medicine and Owens & Minor celebrated the groundbreaking of a planned 350,000-square foot “center of excellence” for medical supplies and logistics in the WestRidge development, near Leidos.
Officials explained the project represented not only significant local investment, but the shoring up of WVUM’s medical supply chain, the vulnerability of which was exposed by COVID.
The $50 million facility would employ more than 100 people and be complete and ready to open in late 2023.
But 2023 came and went.
Then, in early 2024, an unexpected announcement from Owens & Minor explained that construction was just about to begin – but not in WestRidge.
Earlier this week, we not only learned that the facility is ready to open, but where it’s located – on Pipe Street in the Morgantown Industrial Park.
So, what happened?
The answer to that question can be found in the U.S. District Court for the Northern District of West Virginia.
Owens & Minor filed suit against developer WestRidge in late 2023 claiming, among other things, WestRidge breached the lease between the parties by “failing and refusing to diligently pursue completion of the landlord’s [WestRidge] work and failing and refusing to obtain financing necessary for completion of landlord’s work.”
Further, the lawsuit claims WestRidge tried to “strongarm” Owens & Minor into agreeing to fundamentally alter the terms of the agreement using deadlines spelled out in a $15 million grant from the West Virginia Development Office as leverage.
The company’s lawyers claim WestRidge delayed the construction process right from the beginning under the guise of a need for additional input from Owens & Minor.
“The action arises from WestRidge’s refusal to perform its development obligations under a commercial lease between WestRidge and O&M for an intended medical supply distribution facility … in an attempt to renegotiate the lease to be more financially favorable for WestRidge and as a result of WestRidge’s ongoing financial issues.”
The company is asking the court to find WestRidge in violation of the lease, entitling Owens & Minor to terminate the agreement with no monetary consideration owed to the developer.
In a counterclaim, legal counsel for WestRidge said there was no refusal or guise, and that the delays came about because they were attempting to build a facility to the specifications of a company that wasn’t providing specifications.
“In breach of its obligations under the lease, O&M repeatedly failed to make necessary decisions and thereby caused a series of delays, which obstructed the progress of the construction, and which delayed and/or precluded [West Ridge] from performing its obligations under the lease and from receiving benefit of the same.”
In other words, according to court filings, Owens & Minor caused the very delays being held up as an excuse to void the lease with WestRidge.
“While the lease was entered into on July 21, 2022, it was not until almost a year later that O&M finally provided information sufficient for [WestRidge’s] architect to be able to complete and submit a set of progress plans to O&M for its review and approval.”
The WestRidge response goes on to claim Owens & Minor “constantly revisited fundamental decisions, often reverting back to versions of the building that it had previously ruled out …”
WestRidge asked the court to compel Owens & Minor to perform all of its obligations under the lease, including providing necessary approvals, compensating [WestRidge] for the construction work that has been done, paying future rent for the agreed-upon ten-year term (approximately $40.2 million according to lease documents) and covering attorney fees and other expenses.
