The North Carolina Board of Ethics yesterday decided against further investigation of a complaint against Gov. Mike Easley over his relationship with Southport Marina leaseholders, who also happen to be his campaign contributors.
Board members accepted recommendations from their executive director, Perry Newson, after he conducted an initial review of charges that Easley showed favoritism towards developers in Southport, who wanted a long-term lease to run the state-owned marina.
The allegations were filed as part of a complaint by two Southport residents, who believed Easley convinced members of the Council of State and the N.C. Ports Authority to back the extension of the lease to Wilmington developer Charles “Nick” Garrett, Jr., and Cary developers Tim Smith and Julian “Bubba” Rawl. The complaint contended that the governor “unethically influenced,” “intimidated,” and “orchestrated” the public bodies to support the new marina lease.
“I found absolutely no credible evidence to support these charges,” Newson told Board of Ethics members.
For his review, Newson said he interviewed Council of State members; board members for the Ports Authority; and governor’s office staffers. He said he also read between 50 and 60 newspaper articles about the issue and listened to audio of the Jan. 10 Council of State meeting — in which the marina lease extension was voted on — repeated times.
The council is composed of the governor and the other nine independently elected state officials including the state treasurer, lieutenant governor, and agriculture commissioner. By law, the council is required to approve state real estate transactions.
Newson said the allegations of intimidation, manipulation, and undue influence of Council of State members were unfounded, and that the complainants produced no evidence of such behavior.
The new 15-year lease with Southport Marina, Inc. — owned by Smith and Rawls, who are business partners with Garrett — contains extensions that would tie up the property through 2040. The lease requires that the company pay the state $160,000 in rent yearly, with an annual increase of as much as 3 percent. The complainants, represented by residents Bill Duke and Woody Wilson, called the new lease a “sweetheart deal” for Easley’s friends.
Garrett, who renovated Easley’s Southport home for $250,000 in 2001, has built several luxury condominiums across the street from the marina. He also told the Wilmington Star-News last week that he was going to be the contractor for a new restaurant at the marina. Garrett has tried to acquire adjacent property, and attempted to buy the marina in 2005.
In May 2005 the Ports Authority received an unsolicited offer to purchase the 430-slip marina for an undisclosed amount of money. The authority decided to seek bids from other parties. It received bids ranging from $2.5 million to $16 million. Garrett offered $5.1 million.
Several local residents expressed concern that a private owner would convert much of the land to condos and significantly raise the fees for renting a boat slip. In the midst of the discussions on the future of the marina, Garrett and his partners began negotiations to buy Southport Marina, Inc., the company that held the existing lease.
Garrett and his wife have contributed $16,000 to Easley’s campaigns since 2000. Smith and Rawl together have given $14,000 to governor’s campaigns since 2000, The News & Observer has reported.
Bill Duke said that from a business standpoint, the new lease makes no sense for the state or taxpayers, since the developers will have freedom to raise rents on boat slips and improve surrounding property with relatively little compensation to the state.
“Reasonable people should have challenged that agreement,” Duke said. “The lease before was bad. Now they’ve compounded it.”
Paul Chesser ([email protected]) is associate editor of Carolina Journal. Executive editor Don Carrington contributed to this report.