The city will recoup additional funds from the failed downtown theater project after settling with one of the developer’s partners this week.

The Dowagiac City Council approved a settlement agreement with Arizona’s Jeremy Jager during its meeting Monday evening at Dowagiac City Hall. Per the terms of the agreement, Jager — a partner of the project’s head developer, Ken Allen — will pay the city $5,000, which go toward helping the city recoup the more than $200,000 it paid to help complete the renovation project before its failure.

The project began in 2013, when Allen and his company, Forrest Fin LLC, sought to transform the former Mr. K’s Warehouse on Front Street into a single-screen movie theater. To assist Allen with the endeavor, the city administered state grant funds as well as money from the city’s revolving loan fund to the project, Anderson said.

In the fall of 2014, Anderson and others with the city began noticing a lack of progress in construction. Dowagiac police launched an investigation in early 2015, which discovered that Allen had defrauded the city, issuing invoices for materials and equipment that he had not actually purchased.

The settlement is the second the city has reached with parties involved with the theater in recent months. In July, former city economic development consultant Cynthia LaGrow and her firm, LaGrow Consulting LLC, agreed to pay the city $100,000 in response to litigation filed by the city for the firm’s role overseeing grand money distribution for the project.

So far, the city has received around $185,000 worth of restitution, putting them close to recouping the total amount of local funds as well as state and federal grant dollars that were sank into the development, said City Manager Kevin Anderson.

“We are doing a solid job of recouping,” he said. “It is tedious and it takes time, but when we started down this road we said we would turn over every stone we could to recoup the funds on it.”

Allen was arrested and charged with larceny for his actions. He was sentenced in February to five years of probation and was ordered to pay $80,000 in restitution.

On top of the restitution, the city is currently pursuing civil charges against Allen in hopes of receiving additional damages, Anderson said.

Jager could not be reached for comment as of press time.