A state watchdog agency is reviewing financial records related to the management of UMass Dartmouth’s former arts campus at the Star Store in downtown New Bedford, which abruptly closed its doors this summer.

The Office of the Inspector General, an independent state agency that investigates fraud, waste and abuse of public funds, will focus on monthly payments the public university made to the Star Store’s private owner during the final two years of a 22-year occupancy that helped spark a broader arts and culture renaissance in downtown New Bedford.

New Bedford’s longtime State Sen. Mark Montigny, who orchestrated the original deal that brought UMass Dartmouth into the Star Store, is also the force behind the inspector general’s review. A law Montigny tucked into this year’s state budget called for an investigation, outlined its scope and compelled a state agency to provide relevant financial records to the inspector general.

In documents sent to the inspector general last week, which Montigny’s office shared with local news outlets, the state senator said the Star Store’s owner, Paul Downey, collected $3.8 million from the university over the past two years without making any “discernible improvements to the building,” leaving the Star Store with a long maintenance backlog that could imperil any hopes of the university returning to its downtown arts campus.

“I have never observed such an obnoxious example of the exploitation of public resources during my time as a legislator,” Montigny said in the letter.

As part of the original deal Montigny helped broker in the 1990s, UMass Dartmouth agreed to pay Downey more than $50 million to cover the cost of renovating the grand, beaux-arts department store, which had been sitting vacant in a dwindling downtown in the heart of Montigny’s district.

The 20-year lease-to-own agreement at the Star Store expired in 2021, opening up an option for the university to take ownership of the property for a single dollar.

But the university never exercised the option, even as Montigny warned various branches of state government that tens of millions of taxpayer dollars were at risk of being squandered.

The Division of Capital Asset Management and Maintenance, a state agency that oversees transactions of public property, instead raised concerns about taking on the Star Store’s significant capital needs — including a leaking roof, a malfunctioning air conditioning system and a long list of renovations required under new green building codes — at a time when arts enrollment at the university is declining.

“Instead of exercising the one-dollar purchase, DCAMM entered into a one-year agreement extending the lease without any requirement that rent be applied toward urgent maintenance needs,” Montigny said in his letter to the inspector general.

The state senate, where Montigny is New Bedford’s sole representative, has since cut the funding for rental payments at the Star Store from the state budget, which triggered an abrupt exit for UMass Dartmouth this fall that was announced to students just two weeks before the school year began.

Undergraduate art students and MFA candidates whose studios once filled the Star Store’s four floors were scattered between UMass Dartmouth’s main campus and a storefront in a strip mall the university leased nearby.

As the Star Store once again sits vacant, just 22 years after a major investment by the legislature and UMass Dartmouth, Montigny is demanding a more detailed ledger of how state funds were used at the property.

“To the best of my knowledge, DCAMM has yet to provide a public accounting of how taxpayer money for this building was spent over the past twenty-two years while major components of the building remain in poor condition,” Montigny said.

In the meantime, estimates for how much it would cost to catch up on maintenance needs at the Star Store have ballooned.

“In April 2021, DCAMM stated to my office that repairs would cost approximately $16 million but acknowledged that figure was a ‘wild guess,’” Montigny said in his letter to the inspector general. “Now, the university claims the building needs up to $75 million to put it in a state of good repair. The total lack of transparency and responsibility from these parties needs to stop.”

The inspector general’s investigation will unfold as local politicians work with Gov. Maura Healey’s administration to identify potential solutions to bring the university back into the Star Store.

Among the state’s various investigative agencies, the Inspector General has a unique tradition of publishing reports that shine a spotlight on wasteful government spending, even if it finds no evidence of legal violations. The office can also pursue financial penalties or recommend criminal prosecution if it finds evidence of fraud or abuse of public funds.

Ben Berke is the South Coast Bureau Reporter for The Public’s Radio. He can be reached at bberke@thepublicsradio.org.

Disclosure: The Public’s Radio previously rented space in the Star Store for our South Coast Bureau.