Rep. Bill Owens says confusion on the part of N.C. House Speaker Jim Black about where to spend state discretionary funds created what appears to be a conflict of interest for the Pasquotank County Democrat.

Last fall, Owens helped secure state grants that would benefit his downtown Elizabeth City real estate holdings, located on Main Street. The money came from discretionary funds Black and Senate leader Marc Basnight controlled in the Department of Transportation and the Department of Cultural Resources. Carolina Journal and The News & Observer first revealed publicly the existence of the discretionary funds last month.

However, Owens maintains he did not request money for Main Street, but for improvements on Water Street, which intersects with Main Street. He does not know how Black got confused and asked for money for Main Street. “My first knowledge that all the money was going to Main Street was when I read it in the newspaper. I have refused to do anything unethical,” he said.

Main Street Champions

In January, Owens and his partner Zack Robertson were honored during the North Carolina Main Street annual awards dinner in Morganton by being named “Main Street Champions” by Elizabeth City Downtown, Inc.

“We’re just investors buying property and fixing it up as we can afford to do it,” Owens told The Virginian-Pilot. Owens was a Pasquotank County commissioner from 1976 to 1995 and since then has served in the N. C. General Assembly. Robertson, is a former Elizabeth City Councilman.

Owens owns several apartments, retail space, and office buildings valued between $2 and $3 million on East Main Street, and as much as $5 million total in the immediate downtown area. Owens and Robertson formed a partnership in 1991 and started buying downtown property in Elizabeth City.

Streetscape Improvements

Owens owns or has an interest in 10 or more properties on or adjacent to an ongoing Main Street improvement project referred to as a “streetscape.” Streetscape involved new sidewalks, underground utility lines, brick street crossings, new pavement, new streetlights, new benches, and new trash cans. Three blocks were finished last year. The additional grants from the state discretionary funds are to help finance two more blocks.

Owens told CJ that he asked the city to deal with Basnight in seeking the funds for the streetscape project, so that is what City Manager Rich Olson initially did. “I have had several conversations with Senator Basnight’s office concerning completion of the Main Street Streetscape project. Senator Basnight has once again requested that we provide a cost estimate, so he can start the appropriation process. We will request $500,000 from the Senator,” wrote Olson in an October 2004 memo to the mayor and city councilors

But Speaker Black ended up in the deal, as well. “Speaker Black has approved Bill Owens request of $250,000 for the Main Street in Elizabeth City. Please find the enclosed letter for details. This is half of the $500,000 needed for this project and Speaker Black would like to share the cost with Senator Basnight,” read a memo from Black’s office to DOT Secretary Lyndo Tippett.

Arts Council Grant

On Sept. 20, 2004, Black aide Rita Harris sent to Donna Rosenfield, Legislative Liason at the Department of Cultural Resources, a list of projects to be funded from Black’s discretionary fund at that department. Among the projects was $500,000 for the Pasquotank Arts Council in Elizabeth City. Each project also listed the name of a legislator, and in this case it was Owens.

The same day she received Black’s request, Department Secretary Lisbeth Evans sent the Pasquotank Arts Council a letter informing the group that it had been awarded $500,000 “for renovation of a downtown building for a cultural arts center.” Prior to receiving the grant, the Arts Council claimed net assets of $265,000 for the tax year ending June 30, 2004.

The organization is currently housed in a building on East Main Street and the new facility is also on East Main Street. The Council acquired the new building in 2002 for $120,000. “Once completed, this facility will play a pivotal role in transforming downtown historic Elizabeth City into a vibrant center of commerce and can help to redefine the area’s economic future,” Executive Director Lisa Winslow told The Daily Advance of Elizabeth City in 2003.

Legislative leaders directed the Department of Cultural Resources to send a total of $9.2 million to approximately 100 different organizations. The Arts Council grant was one of the largest awards. Only three other groups received more.

Owens’ Response

Owens told Carolina Journal that in the last few days of the General Fund budget process, the Arts Council asked him if there was any money available for its project. “I passed a request from the Arts Council on to Speaker Black. When we got the award, I was totally amazed at the amount. I thought it was a mistake.”

Owens said that even though he has approximately $5 million worth of real estate downtown, he has considerable loans on the properties, and added that he is one of the largest taxpayers downtown. He acknowledged the improvements would enhance the value of his real estate holdings. He said he gave $15,000 towards the streetscape project, but the city gave the money back.

He said he was worried about the appearance of a conflict of interest, so prior to requesting the grants he decided to discuss the situation with his hometown paper. He said The Daily Advance editor Michael Goodman urged him to pursue the grants.

Goodman confirmed that Owens approached him about the issue. ”Streetscape was a way to help Elizabeth City. You can’t restrict the development of downtown because Bill Owens owns property here,” Goodman told CJ.

Carrington is Executive Editor of Carolina Journal.