Rendering of proposed People's Community Health Center in Severn.
Rendering of proposed People's Community Health Center in Severn. (Rendering courtesy People's Community Health Center)

Officials at People's Community Health Centers said Friday they remains committed to opening a health center in Severn, despite Anne Arundel County holding back funding after learning of an IRS judgement against the nonprofit.

Anne Arundel County Executive Laura Neuman said Thursday the county was ending two grants promised to People's related to a planned health and community center after discovering financial problems. According to Neuman, People's owes $463,925.65 in a federal judgment.


In 2013, the county agreed to two grants to People's totaling $1.9 million. The money was for the planning, design and construction of the new center, which would be located on Reece Road, near the public housing community of Meade Heights and struggling neighborhoods along Pioneer Drive. So far, the county distributed $168,000 of the grant money to People's.

"We evaluated the situation and, regrettably, our findings suggest that the only prudent course of action is to discontinue funding the organization's grants at this time in order to alleviate the potential for future losses to the county," Neuman said in a statement.

Stacy Fruhling, interim CEO of People's said in a statement that the organization is "in transition" and the grant discontinuation is "a minor setback" to the Severn project.

"What we are faced with is a lien resulting from issues dated back to prior periods. We are working with the IRS and an outside advocate to resolve the issue as expediently as possible, and we continue to move forward with our mission and activities, including the plan to support the new center in Severn," Fruhling said in the statement.

The Severn center was slated for groundbreaking later this year with the opening projected for 2015. The $11.5 million project also has funding from state and federal agencies. T

he $1.9 million from Anne Arundel came from grants funded by fees from the Maryland Live casino, which is a few miles away.

People's operates health clinics in Brooklyn Park and Odenton in Anne Arundel County and in Waverly, Station North and Washington Village in Baltimore. A Govans location is closed for renovations, according to the People's website.