Opening another chapter in a saga that critics contend was a sweetheart deal, the Wake County School Board on Tuesday rejected an offer from the Town of Matthews to buy two parcels of undeveloped land once owned by convicted former House Speaker Jim Black.

School officials tried to find a buyer for two-and-a-half years before Matthews offered $295,427 for the 9.5 acres of real estate. Black, a Matthews Democrat who served a record-tying four terms as House speaker between 1999 and 2006, surrendered the land to the Wake County Public School System in 2009 to settle half of a $1 million fine that was part of his state sentence on corruption charges. Black had paid the first half of the fine in cash.

At a meeting Tuesday night, school board members rejected the offer and voted, 8-1, to counter at $338,000. An appraisal commissioned by the school district puts the land’s value at $341,000; another arranged by Matthews estimates the value at $335,000.

Betty Parker, director of real estate services for WCPSS, said that Matthews wants to use the property to build a park.

“I don’t see a problem with holding onto this for a little while longer and potentially getting a little more for our kids in this school system,” said school board member John Tedesco.

Fellow board member Keith Sutton disagreed. “To sit on it would be to sit on money,” he said. He made a motion to counter offer at $325,000. It failed in a 7-2 vote.

Critics sound off

Black was convicted in 2007 on state and federal felony charges for bribery and obstruction of justice. He was sentenced to 53 months in prison and levied a $50,000 fine on the federal charges, plus an additional eight to 10 months in prison and $1 million fine on the state charges.

Black was given two years (and offered two extensions) to pay the fine. He was allowed to serve his state and federal prison terms concurrently and to serve the remaining six months of his term under house arrest in 2010.

In a court order in 2009, Wake County Superior Court Judge Donald W. Stephens signed off on the real-estate transfer from Black to WCPSS, stating that the property “has a fair market value roughly equivalent to the remaining fines, restitution and court costs to be paid in this case based on previous offers to purchase.”

At the time, supporters of the deal claimed that the real estate would fetch at least the $500,000 still owed by the former House speaker. But critics argued that Black’s land wouldn’t bring nearly that amount, and the new appraisals have them feeling vindicated.

“The average person would have had to sell their possessions and make the fine that was given to them,” said Ron Margiotta, a lone voice on the Wake County School Board in 2009 critical of the arrangement. “That wasn’t Mr. Black’s case. He was able to give one piece of property that was almost valueless. It was a deal that was made, as far as I’m concerned.”

Paul Coble, the Republican chairman of the Wake County Board of Commissioners and a candidate for the GOP nomination in the 13th U.S. Congressional District, said that the school system will benefit from the money, but the sum should be more.

“In tough economic times, you’re happy to get any money you can get. That’s the good news,” Coble said. “The bad news is it isn’t as much as we were told it was going to be. That was the result of what appears to be a sweetheart deal.”

Wake County developer Jim Anthony also questioned the compromise. “Any responsible real estate person would not have accepted the deal that was proposed if they wanted to get anywhere near the targeted value of the fine,” he said.

Past assurances

As Carolina Journal first reported three years ago, records from 2003 put the combined tax value of the land at $149,000. More recent revaluations from 2011 show that the value of the properties dropped 3.4 percent to $143,900 (PDF download here and here).

Property records also showed that Black owns more than a dozen parcels of real estate — with a combined tax value in the millions — including prime commercial properties and several lots with homes at Lake Norman north of Charlotte. He was not required to sell or take out mortgages on any of them to satisfy the final half of his fine.

After CJ broke the real-estate settlement story in June 2009, Black’s lawyer, Whit Powell, wrote an email defending the deal with WCPSS. “Your implication that the Wake County School Board was shortchanged is inaccurate and without basis,” he wrote.

Also at the time, an attorney for the school board assured CJ that the parcels were worth enough to satisfy the fine. “I’m not an expert, but I feel very good that its fair market value is at least $500,000,” said Kris Gardner, a lawyer with the firm Tharrington Smith LLP who worked on the deal on behalf of the Wake County School Board.

In late 2010, Michael Evans, a spokesman for WCPSS, told CJ that the system was tapping into real estate acquisition channels to sell the properties without using a typical broker. The goal was to save money by avoiding a commission charge. Evans said the system was asking around $550,000 for the parcels combined.

David N. Bass is an associate editor of Carolina Journal.