Carolina Journal News Reports
ROANOKE RAPIDS — Economic development officials in northeast North Carolina put a pretty face on the groundbreaking in mid-November of one of three projects planned around Roanoke Rapids. Dolly Parton was there. So was brother Randy. But the stark reality of the projects is that so far, taxpayers appear to be the only ones paying a pretty penny for the projects, and conflicts of interest abound.
Supporters of three recently launched Roanoke Rapids-area projects say the projects will deliver thousands of jobs and provide millions of dollars of economic benefits for the region. But to succeed, each will ultimately depend on a steady stream of customers. Only time will tell whether the customers come and the projects deliver the promised benefits.
Just a few miles north of Roanoke Rapids, off Interstate 95 at Exit 176, is the site of the Advanced Vehicle Research Center, a 625-acre facility with a 3.2–mile test track, designed to attract automotive testing and research companies. A few miles to the south, but also adjacent to I-95 at Exit 171, is the 750-acre site for The Randy Parton Theater and Carolina Crossroads Music & Entertainment District. Three more miles to the south along I-95 at Exit 168 is the 118-acre site for a theme park to be called “Turtle Island: Native America USA.”
The vehicle research center is in Northampton County, population about 22,000; the other two projects are in Halifax County, population about 56,000.
While seemingly different, the projects have much in common. Each project is heavily dependent on public funds to get started. The specific sources of private funds remain a secret.
The Northeastern North Carolina Regional Economic Development Commission, whose headquarters are in Edenton, is a key player in the research center and the Parton project. The General Assembly created the 19-member commission to facilitate economic development in a 16-county region. House Speaker Jim Black, and Senate President Pro Tem Marc Basnight each appoint six members, and Gov. Mike Easley appoints seven. The chairman, Jack Runion of Littleton, is an Easley appointee. Rick Watson is president and CEO.
The commission’s annual funding from the state is about $1.5 million, but Watson typically seeks and receives additional state grant money from a variety of programs. One organization is apparently not adequate to carry out the commission’s mission. Watson and Runion have created and control other organizations to handle money, including North Carolina’s Northeast Partnership, Inc.; North Carolina’s Northeast Economic Development Foundation, Inc.; North Carolina’s Northeast Committee of 1000; and North Carolina’s Northeast Partnership for Financing. For simplicity, further references to any or all of these organizations will be as Watson’s Commission.
Advanced Vehicle Research Center
According to the Advanced Vehicle Research Center of North Carolina press release, the facility will be an automotive proving ground featuring “a high-speed track, ride and handling track, vehicle dynamics area, advanced emissions laboratory, hydrogen and alternative fuel refueling stations, client offices and workshop areas.”
The idea was the brainchild of Dick Dell of Raleigh. Northampton County Community Development Director Gary Brown described Dell as a lifetime automotive enthusiast who is retired from IBM. “After retirement he has spent considerable time studying how new products have been brought to the market. He has a huge interest in alternative fuel technologies,” Brown told Carolina Journal last May.
With a grant from the state–funded Rural Economic Development Center, Dell, who is now an employee of the AVRC, authored a feasibility study on his own idea that concluded his project was feasible, and would “realistically have the potential to bring more than 6,000 jobs to North Carolina.”
In his study Dell also said the AVRC can pick from a number of business models, “but all of them will probably include for-profit for operation and development and non-profit for ownership responsibility and cooperative university projects.”
The bulk of the funding for the AVRC is a $7.5 million appropriation from the legislature. Documents obtained from the State Budget Office indicate that Watson initiated efforts to have the $7.5 million sent directly to his commission instead of to the AVRC.
The $7.5 million in AVRC funding from the Assembly is not automatic. The 2005-06 budget bill stipulates that before releasing any money, the Office of State Budget and Management must certify that the AVRC has obtained legal title to the property, provided the necessary infrastructure to support the facility, and entered into a contract for use of the facility that will create private-sector jobs. The AVRC is also required to deliver to the governor and legislative leaders a detailed progress report before Dec. 31, 2005. At press time, no report had been received and no funds had been released.
After a public hearing Dec. 5, the Northampton County Commissioners approved spending $1.8 million to buy 625 acres of land to give to the AVRC, an organization formed in March 2005 and run by three board members who are also government employees. The organization’s president is Brown, a county employee. His department manages the county’s planning and land-use functions. The other two board members are Brown’s boss, County Manager Wayne Jenkins, and Vann Rogerson, vice president of marketing for Watson’s commission. Rogerson is in a unique position because he is also an Edenton-based employee of the N.C. Department of Commerce.
David Lawrence, a faculty member of the UNC School of Government, told CJ that it is not unusual for a county to set up a nonprofit associated with an economic development activity. “But if someone sets up a for-profit and the county controls it, then you run into the issue — can the county run a test track?” Lawrence said. ”You have issues whether counties can do that.”
Northampton County Commission Chairwoman Virginia Spruill told CJ that even though she was not at the meeting, her board approved the arrangement for Brown and Jenkins to establish a nonprofit and become board members. She referred further questions to County Attorney Charles Vaughan. Asked whether the board had approved the arrangement, Vaughan told CJ, “I don’t know. I had no part in that.”
CJ then asked Jenkins for copies of county commission meeting minutes approving his participation as an AVRC board member. He said he would search the meeting minutes and provide the information. Subsequently he responded in writing stating, “There are no such minutes as there was no approval by the Northampton County Board of Commissioners on the issue of the members of the make up of the Board of Directors of the AVRC.”
Department of Commerce spokeswoman Alice Garland told CJ, “There is no written or email correspondence in the Department pertaining to Vann Rogerson’s appointment to the AVRC Board.” Runion told CJ that he thought the executive committee had approved Rogerson’s participation in November. He was vague on other details about the AVRC. “Vann has been handling that project. I really haven’t gotten involved,” he said.
On Nov. 3, the Golden LEAF Foundation awarded a $1 million grant to Watson’s Commission to be used for the AVRC. The legislature created the nonprofit foundation in 1999 to receive one-half of the funds coming to North Carolina from the master settlement agreement with cigarette manufacturers. The politically appointed board makes grants to various economic development projects throughout the state. When asked why the money didn’t go directly to AVRC, the nonprofit organization that is to receive a $7.5 million appropriation from the legislature, Golden LEAF President Valeria Lee told CJ that Watson “applied for the grant, because the Vehicle Center has not yet received tax-exempt status, but we actually expect the money to go directly to Northampton County for expenses associated with developing the 30-acre site.”
The grant application refers to the project as “Project Chapman,” which at the time was a code name for Lotus Engineering, a Michigan-based division of the British racecar manufacturer started by Colin Chapman. The grant application stated that Project Chapman will create 790 new jobs and have a taxable investment of $43 million in North Carolina. The application also stated that AVRC has secured “engineering resources” valued at $3 million that will be donated to the project. Simon Cobb, director of product planning for Lotus, confirmed that his company is part of the project and will be donating engineering services.
When asked how his company became involved in the project, Cobb said, “We worked through a public tender to win that position.” He explained that Lotus responded to AVRC’s request for proposals. He said he expects that hundreds of people will be hired to work at the facility, but acknowledged that most of the workers would be brought in from other areas.
U.S. Rep. G. K. Butterfield secured $1.5 million in federal funds for the AVRC. Butterfield spokesman Ken Willis said county commissioners and representatives from the center asked for the money. He said that a Butterfield staff member had read the feasibility study and that “the federal government has some responsibility to be a partner.”
The groundbreaking ceremony for the Randy Parton Theater and Carolina Crossroads Entertainment District was conducted Nov. 11 at the site next to I-95 south of Roanoke Rapids. Parton recently set up Moonlight Bandit Productions to manage the main theater, which will be built by the City of Roanoke Rapids. Parton and his wife are moving to the area from their home near Pigeon Forge, Tenn.
Watson said he initiated the idea for the project and recruited Parton to participate. Watson and other supporters said the project represents an investment of $250 million and the creation of more than 2,500 jobs.
Complete funding details are sketchy, but Roanoke Rapids City Manager Rick Benton told CJ that the city will spend $13 million building a 1,500-seat theater and turn it over to Parton to operate. He said that the NCDOT will spend about $3 million to modify and improve nearby roads, and that there will be $2 million in state grant money used for water and sewer extensions. He said he expects the rest of the money to be private.
In early November, Watson received approval from his board of directors to work for Parton’s Moonlight Bandit Productions while keeping his current $165,000 job as the CEO of his commission. His duties and salary with Moonlight Bandit are unknown. He said that he plans to end his commission job in 2007 but continue employment with Moonlight Bandit.
But an apparent conflict of interest has already surfaced. Documents obtained from the N.C. Department of Commerce show that, under Watson’s signature, the commission submitted documents to Commerce establishing claim to the $500,000 in state funds earmarked for the entertainment project. So Watson’s Commission would be receiving state funds that are designated for his new employer.
The Commerce Department has balked on releasing the money because the legislation calls for the money to go to the Roanoke Rapids Entertainment Complex. Another holdup is that the Entertainment District failed to submit a required progress report by Sept. 1, 2005 to the Office of State Budget and Management, the Department of Commerce, and the Fiscal Research Division of the General Assembly. At press time the district had still not released such a report.
In November 2004 the Golden LEAF Foundation awarded $100,000 to the Haliwa-Saponi Indian Tribe for pre-development costs for a project called “Turtle Island: Native America USA.” Promoters of the project say it will be a Native-American theme park situated on 118 acres in Halifax County off I-95. It “will serve as a tourism destination and economic catalyst for the area — increasing demand for local agricultural products that will be used at the park; providing jobs for area residents; and, creating benefits for area hotels, restaurants, and businesses.” They say the park will also help educate the public about the history and culture of Native Americans.
The Haliwa-Saponi reside primarily in Halifax, Warren, and adjoining North Carolina counties. The majority of the 3,800 enrolled members live in southwestern Halifax County and southeastern Warren County. North Carolina officially recognized the tribe in 1965, and the Haliwa-Saponi Tribal Council now governs it. The tribe has pursued federal recognition since 1979.
Earl Evans, a spokesman for the tribe, told CJ that the tribe has also received $250,000 from HUD’s Rural Housing and Economic Development program, and will be requesting $1 million from the legislature for costs of design, marketing, and promotion of Turtle Island. Evans said the tribe had a feasibility study on the project, but he would not make it public at this time.
The first phase of the project is estimated to cost about $30 million and the tribe expects to raise money from government grants, foundations, and private donations. Evans would not say how much money he expected to come from government sources. He said the tribe has contracted with a Warren County company named BR Associates to create a preliminary design for the park. He said Barry Richardson, who is also a Warren County commissioner, owns the company.
Richardson is closely involved with the tribe. A biography on the tribe’s website says Richardson had served as the tribal administrator, and represents the tribe on the N.C. Commission of Indian Affairs. Among his business interests, the bio listed BR Associates, describing it as “a consulting firm specializing in writing proposals, strategic plans and financial management.” Asked when his preliminary design work will be finished, Richardson told CJ, “I don’t have the slightest idea.” When asked how much he was getting paid, he said, “I think it is irrelevant. Why should I disclose that?”
The Turtle Island project has not yet received any funds directly from the legislature. If the project gets money, the release of funds will likely be subject to reporting requirements similar to other projects.
Don Carrington is executive editor of Carolina Journal.