HANCOCK — Hancock Town Council members Wednesday agreed to repay $600,000 in federal funds.
But the council members and mayor balked at paying an additional $324,000 the federal and state governments say that Hancock owes.
At issue are Community Development Block Grant funds granted to Hancock for work on the former Fleetwood Travel Trailer building.
Mayor Ralph Salvagno said the federal funds are administered through the Maryland Department of Housing and Community Development.
After Fleetwood closed, the town acquired the property and received the $600,000 grant to rehab the facility, Salvagno said. At one time Evolve Composites had a plant there, but that company also closed its Hancock operation.
At Wednesday’s meeting Town Manager Joe Gilbert said Hancock received a letter in September 2015 notifying town officials that, if they rented the facility to Harvest for a medical marijuana operation, they would have to repay the $600,000 grant and could be charged for rental income.
While medical cannabis is permitted in Maryland, marijuana use and possession remain against federal law.
The town reached an agreement for Harvest to put a medical cannabis growing operation at the former Fleetwood facility. The company has been operating for the past few years.
During Wednesday’s meeting, Salvagno said the plan has always been for Harvest to buy the building from the town.
“It will happen at some point,” he said.
“We’ve never doubted that at some point we’re going to have to repay the $600,000,” the mayor added. But the additional $324,000 came “as something of a surprise.”
Gilbert said the state presented Hancock with three options for paying a total of $924,000. In each case the payments were spread over three years.
In the end, council members agreed to pay $200,000 each year for the next three years, covering the original $600,000 grant. They said the money can come from rental payments made by Harvest.
Voting in favor were all four council members, Timothy Boyer, Roland Lanehart Jr., Leo Murray and Tim Smith.
The council met by conference call Wednesday, to follow state and federal limits on gatherings in light of the novel coronavirus pandemic. About a dozen people were on the conference call, including a Herald-Mail Media reporter.