08/02/11 — City Council questions grant rules

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City Council questions grant rules

By Ty Johnson
Published in News on August 2, 2011 1:46 PM

When Downtown Goldsboro Development Corp. Director Julie Thompson heard April 27 that her grant application for funding from the Main Street Solutions Fund had been approved, her department, city officials and the Arts Council of Wayne County celebrated.

The $200,000 reimbursable grant meant the city and DGDC could help facilitate the Arts Council in its quest to move downtown by making Jeff and Cindy Darwin, the owners of the building the Arts Council was eyeing, the first borrowers from the newly created revolving loan program the fund would create, but apparently the City Council wasn't fully aware of the grant's requirements.

According to the rules, $100,000 of the money would be funneled to the Arts Council for the renovations to the second floor of the Annie Dove Handley building, while the other $100,000 would be used to renovate the first floor and elevator of the building, which is located on the corner of John and Walnut streets, making the building a more lucrative investment for the non-profit arts center that was moving in.

The reimbursement for the investment would come after certain requirements were met by the sub-recipients -- namely the creation or retention of eight downtown full-time positions.

The city's investment seemed to be news to three members of the council at Monday night's meeting.

Mayor Pro Tem Chuck Allen, District 2 Councilman Bob Waller and District 6 Councilman Jackie Warrick all explained that they weren't aware that the city would be "on the hook" for what amounted to a $100,000 loan while private businesses sought to hire new positions. The grant stipulates that every dollar spent by the Main Street Solutions Fund must be matched by at least two dollars from somewhere else.

The reimbursement side of the grant will come once the eight full-time positions have been retained for six months. Lotus 1899 and a vacant property owned by the Darwins stand to gain from the renovations and would also contribute toward the eight positions required in addition to the Arts Council.

Warrick said he thought the grant was presented to the council in a manner that suggested the Arts Council was receiving the grant.

"We never knew about it," he said of the city's obligation. "It might have been in the application, but we weren't told."

The requirements of the grant must be met within 36 months, meaning, Allen pointed out, that it could be three years before the city is reimbursed, although Finance Director Kaye Scott explained that the businesses receiving the funds would have to spend the money and could not just sit on it.

"I'd rather (the Arts Council) be on the hook for it than us," Allen said.

Allen said he wanted to find a way to push the businesses to hire their full-time positions soon, so as to decrease the city's risk in the investment as soon as possible, although he was adamant that he felt the Arts Council needed to be held accountable somehow. He said, however, that the process was so far down the road that the council didn't have a choice.

Warrick asked Ms. Thompson if the city had already accepted the grant, though the memorandum agenda item the council was discussing at that very moment was the agreement authorizing the execution of the grant.

The other four councilmen didn't speak during the discussion. The memo passed as part of the consent agenda.

In other business, the council decided to defer action once more on a conditional use permit for Dale Benton on the east side of Cuyler Best Road between West New Hope Road and Oxford Boulevard. The council asked during its work session for City Attorney Jim Womble to bring an order to deny to the council's Aug. 15 meeting.

The work session Monday evening was in closed session for 45 minutes while the council discussed a matter of litigation. Attorney Ron Lawrence, a trial attorney at Everett, Womble, Lawrence and Brown, was in the closed session meeting, as well as Fire Chief Gary Whaley.

According to the law firm's website, Lawrence has handled more than 1,000 personal injury and workers' compensation cases during his career.