Nine state senators want to fulfill a promise made by former House Speaker Jim Black, who in 2002 made a “personal commitment” to give Johnson & Wales University $10 million in state money in exchange for relocating a campus in Charlotte.
Black (D-Mecklenburg), who resigned his House seat last week, entered a conditional guilty plea Tuesday in Wake County District Court to state charges of offering a bribe and obstruction of justice. The “Alford” plea allows Black to deny an explicit admission of guilt, but accepting that a jury could arrive at that conclusion based on evidence.
Last week he reached a plea agreement with federal prosecutors, admitting unequivocal guilt to accepting money from three chiropractors in exchange for supporting legislation the chiropractors favored.
Black is due to be sentenced by a federal judge in May.
Meanwhile nine senators, led by Mecklenburg Democrat Charlie Dannelly, have sponsored a bill that would appropriate $6 million to Johnson & Wales through the One North Carolina Fund. The fund is a discretionary pot of money controlled by the governor, used for economic incentives to lure businesses to the state.
The proposed funding represents the balance of a $10-million promise made in 2002 to the culinary school’s officials by Black and State Senate President Pro Tem Marc Basnight, D-Dare. The General Assembly has appropriated $1 million for the school in each of the last four years.
Black wrote in a letter May 23, 2002, to then-University President Jack Yena: “You have my personal commitment of support for a $10 million investment over the next five years by the State of North Carolina for this project.” In his own letter two weeks later, Basnight wrote, “…You have my commitment to make our best efforts to secure $1 million immediately for the Johnson & Wales University campus in Charlotte and the remaining $9 million over the next five years by the state of North Carolina for this project.” Gov. Mike Easley at the time offered support but no specific financial promise.
But no official agreement between the state and Johnson & Wales is in place.
“[The Department of Commerce] does not…have any incentive agreements with them,” Commerce Department legal counsel Don Hobart said in an e-mail message.
Dennis Wicker, a lawyer for the Raleigh firm of Helms, Mullis & Wicker, which represents Johnson & Wales, said the state has a “moral obligation” to pay the school the $6 million balance it is owed. But he admitted that no legal documents exist that bind the state to fund the school.
“The school has relied upon the word of the state leaders for this incentive,” Wicker said.
In a November 2002 interview with Carolina Journal, Judith Johnson, then a spokeswoman for the school, said Johnson & Wales would not come without the $10 million.” When asked what assurance the school had, she replied, “We believe in business by a handshake. The legal documents are being worked up.” She also said she did not know exactly where the money would come from. “We were not aware of the specifics. We felt the commitment is coming.” And what if it doesn’t? “That is a separate issue,” she said.
Wicker said the “moral obligation” is based on promises made by state legislative leaders, who approved the $4 million in appropriations through the state budget over the last four years.
He also pointed out the near-unanimous approval by the legislature two years ago to sell a state-owned building in Charlotte to Johnson & Wales for $1, which would have helped fulfill the $10-million promise. Easley and other state elected leaders, however, thwarted that plan by selling the structure to a private developer instead for $5.25 million.
“It’s a moral obligation we think by the legislature to enact this grant money each year,” Wicker said. “They’ve lived up to it the last four years.”
State Senate Minority Leader Phil Berger, an Eden Republican, questioned the authority that one or two legislators could have in obligating the state to help private businesses.
“How many more letters are out there where a legislator has written a commitment saying, ‘I will do everything I can to get you money?'” he said.
“If the rationale for doing this is that there was a promise made by Speaker Black or by anybody, that in and of itself is not a valid reason for a $6-million appropriation of tax dollars.”
The senators who drew up the bill point to a positive economic impact from the university that they say includes an investment of “over $100 million;” the creation of almost 200 new jobs including 190 full-time faculty; and the generation of “over $100 million annually in the state’s economy.” Wicker said those figures came from an economic impact study written last May by North Carolina State University business professor Art Padilla for Johnson & Wales. Wicker did not respond to an e-mail inquiry asking how much the school paid for the study.
Seven Democrats and two Republicans sponsored the bill. Sens. Dannelly, Dan Clodfelter, D-Mecklenburg, Bill Purcell, D-Scotland, and Fletcher Hartsell, R-Cabarrus, did not return telephone messages inquiring about the legislation. Basnight’s spokeswoman, Amy Fulk, did not return telephone and e-mail messages. Another co-sponsor, Sen. Jim Forrester, R-Gaston, said that he was unaware of the nature of the “commitment” made to Johnson & Wales and that he may not vote for it if it progresses to a Senate vote.
Any appropriation for Johnson & Wales would likely appear in the comprehensive state budget bill, rather than in stand-alone legislation, Berger said.
Paul Chesser ([email protected]) is associate editor of Carolina Journal. Don Carrington contributed reporting for this article.