01/06/08 — TransPark funds get close look in report

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TransPark funds get close look in report

By Matthew Whittle
Published in News on January 6, 2008 2:11 AM

Despite the financial difficulties of the Global TransPark in Kinston, local economic development officials and state legislators say it is still an enterprise worth supporting.

According to the recently released 2007 audit of the North Carolina Global TransPark, the TransPark Authority, which does not have enough cash on hand to pay off its outstanding debts, might be on the verge of bankruptcy.

The problem, the report explained, is an outstanding loan from the state Escheat Fund -- a fund comprised of unclaimed property -- totaling just over $32 million, including accrued interest. It is due to be paid by Oct. 1, 2009.

"The current amount of operating cash held by the Authority is not sufficient to pay the balance due to the North Carolina Escheat Fund and as such, substantial doubt about the Authority's ability to continue as a going concern exists," the report reads.

If the authority, which is a state agency, is unable to pay off the loan and is forced to declare bankruptcy, the audit continues, then approximately $18.1 million in funding from the Federal Aviation Authority might also be required to be paid back.

TransPark Director Darlene Waddell, however, does not expect to declare bankruptcy

"For several years, the Escheat Fund debt has been widely reported throughout N.C. and this is not new news," she said in an e-mail. "The GTP Authority has received the same type of opinion for four years. The report stated there were no internal control deficiencies or deficiencies in the accounting records. That shows the agency is a good steward of the taxpayers' money."

But in order for the TransPark to continue to operate, legislators might be forced to once again extend the loan's maturity date -- something they have done several times in the past.

"What are we going to do? Foreclose on them?" state Rep. Van Braxton, D-Lenoir, asked. "I think the money should be paid back, but that $32 million is not just a loan, it's an investment.

"These are high-tech good jobs (in the TransPark). We need to stay the course."

Besides, added state Sen. John Kerr, D-Wayne, "$30 million is not much on a $20 billion (state) budget."

"I don't think we've burned any money on this. I certainly would not be in any way in favor of pulling the plug. With what we've got in it, I don't think we can walk away," he said.

The TransPark, originally the idea of then-Gov. Jim Martin, was formed in 1991 as the North Carolina Air Cargo Airport Authority.

In 1992, its name was changed to the N.C. Global TransPark Authority and Kinston was settled on as the location after 10 other sites were reviewed. Also created in 1993 was the Global TransPark Foundation, a non-profit agency founded to raise private development dollars for the complex.

Since then, however, the facility has failed to live up to expectations and has failed to generate enough revenue to become self-sufficient.

But Braxton, a former Kinston city councilman, insisted that the problem has been impossibly high expectations.

"The expectations in the beginning were set way too high," he said. "Has it done what it should do? Probably not. It's had its growing pains, but I think the Global TransPark is still a good idea.

"We need that in eastern North Carolina. We don't have enough high-tech jobs and I see high-tech jobs going there. The state needs to do more to support it."

Among the problems the park has faced have been environmental challenges during the construction process, a lack of consistent marketing and quality leadership and the fact that it only recently was outfitted with a high-quality runway and a decent road system in and out.

"All of us in this part of the eastern North Carolina were very supportive of it," Kerr said. "We made some mistakes in the first five, six, eight years, but we've turned it around. It was a very unique concept. Nobody had ever done anything like this.

"It's a beautiful asset down there and I think one day it's going to pay off. They've been very close to hitting the home run."

The audit report does remark on the facility's "continuing positive momentum" in 2007.

The 5,775-acre TransPark features an 11,500-foot runway and a Foreign Trade Zone designation.

Among the almost one dozen businesses operating out of the TransPark are Allegiant Air, a commercial passenger service; Henley Aviation, a pilot flight training center; Workhorse Aviation Manufacturing, an aircraft parts manufacturing company; and Spatial Integrated Systems, an information technology and engineering company.

Also housed at the facility are departments of three state agencies -- N.C. Emergency Management, N.C. Forestry Service and N.C. Highway Patrol.

Most recently, the authority announced in August that Commerce Overseas, a California company that provides spare parts for U.S.-made military aircraft, will be moving its headquarters, a manufacturing plant, a distribution facility and warehouse to the park.

All total, the park's tenants employ 361 people, with another 2,200 employed by surrounding businesses.

"The agency continues to aggressively pursue tenants and uses its updated strategic business plan as its guide. The plan is working. The project continues to gain momentum," Ms. Waddell wrote.

And, explained Wayne County Development Alliance President Joanna Thompson, even though those companies and jobs aren't in Wayne County, the benefits still are felt locally.

"It's a regional draw, and the clients that are going to look at that area are pretty significant clients," she said.

She added that not only would most of those clients not have looked at Lenoir or surrounding counties, including Wayne, without the TransPark, they also tend to bring secondary support companies with them when they do come -- companies that might be more likely to locate in Wayne.

"It's probably doubtful that Wayne County will ever have a complex like the Global TransPark, but we have it right next door," she said. "So while we wouldn't work together specifically on a project, we're not in competition with them.

"We do whatever we can to show our support for them because we know there are Wayne County citizens who go to work there."