The N.C. Global TransPark might go bankrupt because of its inability to pay an outstanding loan, according to a report released Tuesday by the Office of the State Auditor.
Conducted by the independent firm Cherry, Bakaert, and Holland, L.L.P., the audit highlighted the GTP’s $32 million loan from the state Escheat Fund, which is composed of unclaimed property. The original loan was nearly $22 million, but the GTP has accrued $10 million in interest since. The General Assembly had extended the maturity date for the loan until Oct. 1, 2009. In total, the GTP garnered a $2 million increase in long-term outstanding debt over the last fiscal year.
“The current amount of operating cash held by the Authority is not sufficient to pay the balance due to the North Carolina Escheat Fund and as such, substantial doubt about the Authority’s ability to continue as a going concern exists,” the audit said.
The audit also concluded, “[If] the Authority declares bankruptcy, funding received to date from the Federal Aviation Administration may be required to be paid back.” By the end of the last fiscal year, the “amortized potential liability” of the GTP to the FAA was about $18.1 million, the audit said.
On the GTP’s economic outlook, the audit pointed to increasing pressure for the GTP to become independent from government subsidies.
“The decrease in State appropriations for operations to the Authority continues to put pressure on the organization to become self-sufficient,” the audit said. “While there has been a conscientious effort to decrease operating expenses, it is apparent that continued aggressive marketing efforts are essential in order to increase activity at the TransPark to generate revenues.”
GTP officials could not be reached for comment by press time.
The GTP, based in Kinston, hopes to bring economic development to the primarily rural eastern part of the state, but the project has faced sluggish growth since authorized by the legislature in 1991.
David N. Bass is an associate editor of Carolina Journal.