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JCIDA advises legal action against auto business to collect $118,000 owed in back rent

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The Jefferson County Industrial Development Agency is expected to take legal action to collect $118,000 in overdue rent and utility charges owed by Junction Boyz Inc., an auto body and stereo business in the Watertown Center for Business and Industry, 800 Starbuck Ave.

Lyle V. Eaton, chief financial officer of the JCIDA, told the agency’s board of directors Thursday that the Watertown Industrial Center Local Development Corp., a JCIDA subagency that oversees the business center, will be advised to pursue legal action against the company to get its money back. WIC is owed $80,000 in back rent. The JCIDA is owed $38,000 in back rent dating from July 31, when it terminated its administrative services agreement with WIC and took over as landlord of the business center. The total sum includes about $4,000 in utility bills.

“I think we agree we’ve gone as far as we can go with this business, and now it’s a matter of the WIC board passing a resolution saying they want to take legal action,” said Mr. Eaton, who added that the business recently sent the agency a check that bounced.

“They made a payment of $2,500 last month, but the full month’s rent is $8,882. There’s a good possibility since the tenant is this far in arrears that legal action will be the board’s response,” he said.

The agency’s administrative services contract with the WIC board was terminated as part of a restructuring to comply with state pension rules. But even so, the agency’s board decided Thursday to re-establish that same administrative contract so that the WIC functions as the landlord for the business center again. That move was made to avoid legal liability that could affect JCIDA if it continued acting as the landlord of the business center.

The WIC board, which is expected to meet this month, now will be responsible for approving the plan to take legal action against Junction Boyz.

Donald C. Alexander, CEO of the JCIDA, agreed with Mr. Eaton that now is the time to take legal action, which he will advise the WIC board to do.

“This certainly isn’t the first time we’ve run into issues with him,” he said. Edward A. Sampson, owner of the business, has leased space at the back of Building A in the business center since February 2008. “I’ve accommodated him several times, but he hasn’t followed through.”

Mr. Sampson, who also owns the Junction furniture store in Seaway Plaza, said Wednesday that the auto body business took a turn for the worse in 2012 after it spent thousands to expand its 30,442-square-foot facility and upgrade equipment. In the past year, the company has cut its staff from 17 employees to nine. The company installs car audio equipment and completes custom body work, collision repairs and paint jobs.

“We’re now trying to make quicker payments that are due monthly so that we can apply to the old debt,” Mr. Sampson said. “The business has dropped off mainly because last winter there was no business to speak of. Because there was no snow, there were no collisions, and we had very little business compared to normal years.”

The business made numerous upgrades in 2011, he said, because its volume of sales was strong and it expected to continue growing. Like his company, he said, most of the region’s businesses in the automotive industry began to experience difficulties by the end of 2011. Fort Drum families that the business previously relied on, for example, stopped bringing their cars in to be repaired.

“By November of 2011, everything just started to drop volume-wise,” he said. “We thought by the first of the year it was going to bounce back, but without cold weather we weren’t selling anything cold-related.”

Mr. Sampson is nevertheless optimistic the business can forge a comeback this winter, when collision repairs typically pick up because of snowfall.

“We’re now reworking our Web pages and going after Internet sales to reach outside the area,” he said. “We now have equipment to take on any amount of work volume, but it’s still slow.”

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