Approval of the state budget June 30 also marked the beginning of the fulfillment of a $10 million promise made by state House Speaker Jim Black to a culinary arts school that planned to establish a campus in Charlotte.

The budget appropriates $1 million in 2003-04 and an additional $1 million in 2004-05 from the One North Carolina Fund to Johnson & Wales University. The fund did not receive any new money this year, and its balance has fallen below $3 million.

Black wrote in a letter May 23, 2002 to 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.” Johnson & Wales said a month later that it would consolidate its Norfolk, Va. and Charleston, S.C. locations into an $82 million Charlotte campus, to open in September 2004. Senate President Pro Tem Marc Basnight and Gov. Mike Easley also wrote letters of support to Yena.

“…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,” Basnight wrote in his letter June 4, 2002. Easley offered support but no specific financial promise.

The One North Carolina Fund is used at the discretion of the governor to grant financial incentives for businesses to relocate or expand in the state. Typically, funds are doled out incrementally as companies meet targets for creating new jobs in the state. The $2 million budget reallocation only requires Johnson & Wales to spend the money on equipment purchases, structural improvements to buildings, new construction, or infrastructure improvements in the state. The school estimates it will have 250 employees by 2007.

At the time of the announcement, news organizations reported that Bank of America, the Charlotte Chamber of Commerce, Center City Partners, Compass Group North America, and city officials had put together an incentives package for Johnson & Wales. The offers by Black, Basnight, and Easley were not revealed until November 2002.

However, there is no official obligation by the state to give incentive money to Johnson & Wales.

In an interview November 2002 with Carolina Journal, Johnson & Wales spokeswoman Judith Johnson said, “Jack Yena has said that we would not come without the $10 million.” Asked what assurance the school had, Johnson said, “We believe in business by a handshake. The legal documents are being worked up.”

However, beyond the three state leaders’ personal letters of support, no legal documents committing the state exist.

“We do not have any incentive agreements or documents with Johnson & Wales,” said Cooper Bratton, spokeswoman for the N.C. Department of Commerce. A Commerce Department spokesman said in November that there was no “ironclad commitment.”

The General Assembly was left in a position to help Black and Basnight fulfill their promise by usurping Easley’s money and authority through the One North Carolina Fund.

Johnson & Wales signaled its intent to come to the state well before the $10 million in incentives was offered. The school filed papers May 15, 2002 with the secretary of state’s office to do business in North Carolina — more than a month before it announced it was locating in Charlotte.

Chesser is associate editor at Carolina Journal.