The city of Martinsville will not know until next year whether it will have to pay back more than $100,000 in economic development incentives that went to a scandal-ridden military intelligence center that closed last month.

But it appears that the city will not be on the hook for all of the $500,000 state grant used in 2003 to lure now-defunct defense contractor MZM Inc. into locating its Foreign Supplier Assessment Center in the city.

As part of an unusual performance agreement with the state, Martinsville agreed to be held responsible for promises made by the company.

That's just one reason why the center has become an issue in the re-election campaign of U.S. Rep. Virgil Goode, R-Rocky Mount.

Goode requested $3.6 million in federal funds for the center that eventually went to MZM, which at the time was headed by Mitchell Wade, one of his key campaign contributors. Wade has since pleaded guilty to bribing a California congressman in exchange for defense contracts and making $46,000 in illegal contributions to Goode's campaign.

Saying he had no idea the contributions were illegal, Goode has given to charity the $90,500 he received that was linked to MZM.

Critics, including Democratic challenger Al Weed, have accused Goode of catering to the interests of his largest campaign contributor to the detriment of Martinsville, which could be held responsible for some of the state incentives that went to the failed project.

However, the implications for the city will not be known until well past Election Day.

In a report recently sent to the Virginia Economic Development Partnership, Martinsville Assistant City Manager William Bartlett wrote that because the performance agreement was between the city and two state agencies, its terms will remain in effect until the agreement expires in January.

Normally, a company that receives economic development incentives from the state agrees to be held responsible for the money if it closes or fails to meet its hiring and capital investment projections.

With Wade unwilling to make that commitment three years ago, the city agreed to assume responsibility in an unusual deal that allows the Virginia Economic Development Partnership and the Tobacco Indemnification and Community Revitalization Commission to seek reimbursement from a locality instead of a private business.

At issue is $250,000 connected to MZM's pledge to spend $4.4 million in improvements on the building and another $250,000 linked to its promise to hire at least 75 people within 30 months of opening.

Although the company and its successor met the first goal, employment never exceeded 32 before the center's contract was not renewed last month. Because the agreement is prorated, Bartlett said, the city would likely owe between $130,000 and $140,000 for the hiring shortfall -- if the state decides to seek the money.

"I can't speak for the state, but we hope that we would not be held liable," Bartlett said. Officials with the VEDP have declined to say what action they might take when the agreement expires next year.

If another company occupies the building at Clearview Business Park and fulfills the promise of 75 jobs made by MZM, Martinsville would not owe the state anything.

Several companies have expressed an interest in possibly moving into the building, Bartlett said, and the current owner, Athena Innovative Solutions, has said it would be willing to sell the facility.