RALEIGH — Officials at two state agencies are reviewing issues raised by news reports on federal stimulus grants made to a Yancey County resident and to relatives of U.S. Sen. Kay Hagan.
In September, October, and November, Carolina Journal and other media reported several news stories about a 2010 stimulus grant awarded to JDC Manufacturing, a company owned by U.S. Sen. Kay Hagan’s husband and other family members.
And in December, CJ reported on a $378,000 federal stimulus grant made to a Yancey County resident to convert a former blue jean factory into a mixed-use commercial facility. CJ is the only news media outlet to report in detail about the Yancey County project.
In a Dec. 18 email to CJ, DENR spokesman Drew Elliot confirmed the state-level review of the Yancey County project. “The Department of Commerce and DENR are working together to look into the issues associated with this grant that have been brought to our attention,” Elliot said.
Following the publication of the initial stories on JDC Manufacturing, in October DENR Secretary John Skvarla and Commerce Secretary Sharon Decker sent a letter to the state auditor asking for help auditing the treatment of all funding from the American Recovery and Reinvestment Act of 2009, commonly called the stimulus, that was awarded through the State Energy Office.
Melissa Graham, the grant awardee in Yancey County, did not own the 60,000-square-foot facility in Micaville, nor did she have a formal lease for the building. The funds were to be used to develop the Mountain Heritage Expo Center, an entity set up by Graham.
The money came from the federal government’s 2009 stimulus program. The N.C. Department of Commerce managed the grant and awarded funding to the proposed center. The money was handled through the state’s Green Business Fund under the direction of John Hardin, executive director of the Office of Science, Technology, and Innovation.
Graham was unable to secure permanent tenants for the center, and one contractor who worked on the building said she refused to pay him between $40,000 and $60,000 for work he had performed on the project.
In November 2013 she removed 96 rooftop solar panels and a solar water heating system that were paid for with grant money. She then tried to get rid of the solar panels, initially posting them for sale on Craigslist then donating some of them to a nearby private school.
News stories in October reported the details of a 2010 stimulus grant awarded to JDC Manufacturing. The State Energy Office, which managed that grant, was part of the Commerce Department when the grant was awarded, but in 2012 it was transferred to DENR.
Sen. Hagan’s husband Charles “Chip” Hagan and their son Tilden formed the solar energy company Solardyne in August 2010, the same week that JDC Manufacturing applied for a stimulus grant. Records show that Solardyne, now known as Green State Power, was involved in the installation of the solar panels at the JDC Manufacturing facility.
Solardyne also installed the solar panels at Graham’s project in Micaville.
Bill Holmes, a spokesman for Auditor Beth Wood, confirmed to CJ that the auditor’s office is reviewing all projects funded by the State Energy Office.
On Dec. 2, Gov. Pat McCrory announced that Decker would be leaving Commerce and that Skvarla would leave DENR and take over as the new Commerce secretary.
Expo Center plan
The Micaville facility, known as the Taylor Togs building, employed 125 workers making Levi’s blue jeans before closing in 2004. Hugh Dorris of Asheville and Bobby Atkins of Burnsville formed Micaville Loop LLC in July 2008 and planned to attract another garment operation. They bought the building in November 2010 but had failed to attract another tenant.
Atkins told CJ that Graham approached him about her vision for the building and he decided to give her a chance.
Graham had formed a company named Lexsonli Marketing and Media in June 2010. She changed the name of the organization to Mountain Heritage Expo Center LLC in January 2011. Public records indicate that Graham is the only person associated with the organization. She dissolved the LLC in July 2013, according to the Secretary of State’s Office.
She submitted a grant proposal in March 2011 to Commerce to fund “Project Green at Mountain Heritage Expo Center.”
Graham’s plans were to transform the building into a mixed-use commercial building hosting a farmers market, restaurant, bank, and exposition space for conferences. She sought $378,000 to insulate the building, add skylights, install a solar hot water system, and install a solar power system hooked up to the electrical grid. She stated that her organization would contribute $50,000 towards the project. CJ could not determine if Graham actually provided any funding.
Graham stated that she would be the project manager. She listed Atomic Solar as the general contractor and specialty solar contractor and Pisgah Insulation Co., Crawford Creek Electric, and Blue Ridge Plumbing as sub-contractors, but none of those companies actually worked on the project.
She also stated in the grant application, “There will be no employee from the Mountain Heritage Expo Center paid out of the grant funds.” But records show that she wrote herself six checks totaling $19,000 from grant funds.
Commerce awarded Graham the grant even though she didn’t own the building and the building had been listed for sale for several years on Access NC, a website managed by Commerce.
Interviews and records obtained by CJ indicate that Graham worked alone in pursuing the grant from Commerce.
“Yancey County had no money in this project and nothing to do with it, other than the normal role of the building inspector,” Yancey County Manager Nathan Bennett told CJ.
Yancey County Economic Development Director Wanda Proffitt told CJ that she was not involved in the grant process. “I had no involvement in the grant and didn’t know [Graham] was getting it until after the fact. She was operating on her own,” said Proffitt.
Proffitt’s position as EDC director is a part-time job. She is also the president and owner of Carolina Mountain Realty and was the listing agent for the Taylor Togs building from May 2013 through May 2014.
CJ attempted to contact Melissa Graham on numerous occasions in November and December for comment without success. Later, in an exchange of emails beginning Dec. 31, Graham’s husband Scott said Melissa would be available for an interview. Melissa Graham did not agree to a telephone interview with CJ before the deadline for this story.
Unpaid contractor
Graham hired Synergy Building Concepts, a general contractor owned by Michael and Connie Downey, to build and insulate a stud-framed wall along the interior perimeter of the building. Synergy’s contract for the job was $97,029. Graham made only two payments to Synergy totaling $35,000.
Michael Downey met Graham in early February 2012, expecting to collect his final payment. Instead, he told CJ, “She told me that she needed $25,000 to pay for a van she just purchased and said she couldn’t pay me. She said she had already paid me enough.” Records examined by CJ indicate that Graham was reimbursed by Commerce for work done by Synergy.
The project file, now housed in DENR, contained emails from Connie Downey to Graham discussing nonpayment. On Feb. 22, 2012, Michael Downey sent a package to Kamilah Riley, a compliance officer under Hardin in Commerce, including a cover letter and copies of email correspondence and invoices between Synergy and Graham. The letter was not included in materials Commerce and DENR provided CJ as part of a records request, but the Downeys provided a copy to CJ.
Based on the items in the file, neither Commerce nor DENR took action to deal with the Downeys’ complaint.
N.C. Green Business Fund
The North Carolina General Assembly established the Green Business Fund in 2009. The goal was “to encourage the expansion of small to medium-sized businesses to help grow a green economy.” The fund operated for the first two years with state tax dollars and for the following two years the state funds were replaced with federal funds.
Hardin’s office made a total of 46 grants totaling $9.4 million with ARRA funds during 2010 and 2011. It retained $586,000 to administer the grants. The grants ranged from $24,000 for the engineering and installation of solar panels at the Onslow County Farmers Market to $500,000 for a biowaste generator at the Storms Farms hog farm in Bladen County.
The $378,000 grant to the Mountain Heritage Expo Center was the sixth-largest award.
The Green Business Fund has ended. “Currently, all available N.C. Green Business Fund monies have been awarded. No further funds have been allocated for the program and no future solicitations are anticipated,” reads a statement on the Commerce website.
Another failed project
Graham launched another project after the Expo Center failed. In April 2013 she created a corporation named Appalachian Resource Network Inc. The website is still active but the listed phone number has been disconnected.
The organization’s mission is “to support and cultivate rural Appalachian communities, making them more vibrant places to live and work. ARN is committed to sharing resources and building opportunities for rural Appalachia as well as raising community awareness and developing strategies for supporting important community initiatives,” the website says.
Graham occupied a portion of a former U.S. Forest Service building on the main highway passing through Burnsville. Graham announced that the location would also be the home of the newly formed “High Peaks Welcome Center,” managed by a committee she had assembled from a five-county region.
According to the ARN website, the welcome center would be open seven days a week, “housed within The Local Depot, a community initiative spearheaded by the Appalachian Resource Network that will be home to the new N.C. Farm-to-Table project, a Support Local Campaign, and much more,” including “a gift shop, meeting space, a public commercial kitchen, an Adventure Outdoors Center, [and] a gallery for local artists.” The depot will “host shows and special events for locals and to draw out-of-town shoppers and promote tourist-based economic growth.”
The Welcome Center has not been launched and Graham no longer has an office in the building. Sources told CJ they believe she has moved to another county.
Don Carrington is executive editor of Carolina Journal.