News: CJ Exclusives

Developer Sues Greensboro, Saying Stiffed Him on Grant

Eric Robert claims former mayor, city manager promised share of redevelopment funds

A developer is suing the city of Greensboro for what he claims is his promised share of a $6.6 million federal brownfields grant.

The lawsuit was filed in Guilford County Superior Court by Eric Robert, manager of QUB Studios, aka the “Mill,” a mixed-use development in the former North State Mill building on the south side of downtown.

Brownfield is the legal term for property containing some sort of regulated hazardous material that must be removed or treated before the land or buildings can be redeveloped or sold.

In a letter to Greensboro City Attorney Tom Carruthers, Scott Hale, Robert’s attorney, reiterated his client’s “final, formal demand for immediate payment of the no less than $1,037,166 that the city obtained by representing QUB to be an intended beneficiary of the over $6,648,500 received by the City.”

In the suit, Robert claims Greensboro “has breached the contracts it entered into to fund the South Elm Street Redevelopment by failing and refusing to provide any funds for the remediation or renovation of the Mill, proximately causing Mr. Robert and QUB to suffer actual, special incidental and consequential damage. …”

The suit quotes the city’s application for a U.S. Department of Housing and Urban Development Brownfields Economic Development grant, which stated “rehabilitation on the North State Mill complex for studios or housing can begin as soon as the building is cleared for asbestos and lead paint — as well as the application for a Section 108 Guaranteed Loan, which stated, “The project includes the following principal activities: Rehabilitation of a mill building for 22-30 studio, office and/or residential units.”

“Make no mistake: The city has used my property to secure those funds,” Robert told Carolina Journal.

The suit also cites a March 11, 2012 meeting with Mayor Robbie Perkins and interim City Manager Denise Turner Roth in which they “represented to Mr. Robert that funds for the South Elm Street Redevelopment Project would be paid to QUB and Mr. Robert in late 2013.”

That meeting is referenced in a letter to Robert from Assistant City Manager Andy Scott, who wrote, “the city will suggest that certain improvements to the Old Mill be included in the next round of financing for the South Elm Street Redevelopment Project. It is anticipated the funds should be available in late 2013.”

Roth, who later would be named city manager on a permanent basis, left Greensboro to serve in the federal government and recently was nominated by President Obama as administrator of the General Services Administration.

Roth did not respond to a request for an interview.

When contacted by CJ, Scott, who now works in the city’s economic and business development department, declined comment, citing the issue as an ongoing legal matter.

However, Perkins, who was defeated by current Mayor Nancy Vaughan in the 2013 municipal election, was adamant that no promises were made to Robert.

“I can unequivocally say I made no claims on behalf the city or as mayor,” Perkins told CJ. “I don’t know where [Robert] is coming from.”

When asked about the March 11, 2012 meeting with Robert and Roth, Perkins said, “I don’t remember that. I had hundreds of meetings as mayor.”

In a 2012 study analyzing brownfield grants from 2002-07, HUD stated Greensboro would use funds “to finance predevelopment costs” for the South Elm street project, which included “acquisition of real property, relocation payments, clearance, demolition and removal, infrastructure upgrades and site preparation.”

While that process was working its way through the federal bureaucracy, Robert was investing into the Mill, and made a big score in 2014 when Prospect Brands — owner of Duckhead Apparel and Gerbing Heated Clothing — announced it would move its corporate headquarters into the Mill.

In the meantime, the rest of the area is starting to show life, albeit in the form of so-called “private-public partnerships.”

In November 2013 city leaders — including Perkins, who was a lame-duck mayor following his loss to Vaughan earlier in the month — gathered at the site to announce plans for the new Downtown University Campus.

The project since has been rebranded Union Square Campus and at the moment is proposed to be a three-story, 83,000-square-foot building that would serve as a health care training facility for nursing students from three area colleges and medical workers from Cone Health.

The $35 million “campus” will be owned and managed by Union Square Campus Inc., a new nonprofit organization whose board includes Ed Kitchen, vice president of the Joseph M. Bryan Foundation of Greater Greensboro, as well as presidents from the four major area colleges.

Funding sources are evolving, but the campus received a major infusion of cash in the form of $17 million in revenue bonds approved in April by the Republican-controlled Board of Commissioners.

But that still leaves more than half the cost uncovered. According to the Union Square Campus website, $10 million to $15 million will come from “benevolent sources and grants,” while $16 million to $22 million in debt service will be “covered by lease payments from tenants.”

Site work has begun on Union Square Campus, so it looks like this project — however it evolves — might stick. It’s the latest of a long list of proposed projects for the corner of South Elm and Lee — a minor league baseball stadium, a luxury hotel, a new administration building for Guilford County Schools.

Meanwhile, Robert — who’s been there the whole time — wonders if the city ever will make good on the promises he claims they made.

“I thought they would then turn around and do the right thing,” he said.

Sam A. Hieb is a contributor to Carolina Journal.