Ad exposes Governor McCrory's very own "Den of Thieves"

"Den of thieves" was how one Facebook  poster responded to an ad from the Statesville Record & Landmark this Wednesday.

How could an ad engender such a response?

It can when it's another ad for the I77 HOT lanes, and it's an ad apparently placed by a company whose local point of contact has close ties to North Carolina Governor Pat McCrory.

Readers will remember this post from last month outlining all of the lobbyist connections surrounding the I77 HOT lanes project - connections that point to the state's highest elected official.

One of those connections was to a company named Mercury, LLC whose North Carolina point of contact is listed as one Russell Peck.  Peck served as McCrory's campaign manager in 2012.

In that original post, the only connection mentioned to Mercury was that the firm had done work in the past for one of Cintra's frequent business partners, an Australian company named Macquarie Infrastructures.  However, it now appears that Mercury may be doing work for Cintra on the I77 project.

The ad in Wednesday's Statesville paper closed the loop on this connection.

Below are images of two PDF files of the Statesville.com ad.

The first one is from Wednesday morning.  As you can clearly see, the heading on the file says Mercury, LLC - the same name as the governor's former campaign manager's firm.

Sometime Wednesday afternoon, the site changed to the image below.  The only difference in the file was who placed the ad.  It now says I77 Mobility, the Cintra subsidiary building the HOT lanes.

Can you say "Oops!!!"

Someone recognized their "error", then went in and made the change.

Folks, this explains a LOT.

Last year, Governor Pat blew off a letter from a majority of Lake Norman's Commissioners asking to delay signing commercial close with Cintra.  Most of those who signed the letter were fellow Republicans

Earlier this year, he ignored a rising crescendo of opposition to the project when he let his NCDOT sign the financial close.

Now, he is going around the state telling everyone there is no turning back.

These types of ads have been popping up everywhere.  Campaign-style mailers.  Web ads.  Letters.  It is hard to turn around these days without coming across something from Cintra/I77 Mobility/Mercury(?).

In addition to the ads in the Statesville paper, Cintra/I77 Mobility/Mercury(?) took out full page ads this week in current weekly papers in North Mecklenburg.

They are in hardcore selling mode on a project that supposedly cannot be stopped.

The question is "Why???"

At least part of that answer would now appear to be good old fashioned cronyism.  Somebody pays for these ads.  Somebody gets paid to make them.  Somebody gets paid to place them.

Now, it looks like that somebody may have a direct connection to the Governor's Mansion.

The fact that the "error" on Statesville.com just happened to involve a company with the same name as a firm with close ties to the governor sure is a big coincidence if it were in fact not the actual case.  It is too big a coincidence for any reasonable person to believe.

So, next time you see one of these ads, do this.

While channelling your best archvillain Gru from the Despicable Me cartoons, add this tagline...

"Brought to you by Governor Pat McCrory and his band of minions."

Doing that will make all of this make a lot more sense.  Using the Gru voice might also make you feel the slightest bit better about such a villainous situation.

Speaking of villains and dens of thieves...

"Den of Thieves" was the title of a book outlining corruption on Wall Street in the 1980's - insider trading and the like.  People will remember forever the names Ivan Boesky and Michael Milkin as the real-life archvillains of that era.

One has to wonder what names will be remembered similarly here in North Carolina before this tale of I77 HOT lanes is all over.

Beware the wild dogs of River Run!

As Davidson ponders its rural character, it's safe to say this is not something you'll see in an urban setting.

Per comments provided by the Town's public information officer, Christina Shaul, starting about 10 days ago, the Davidson Police Department has received approximately three calls related to some wild dogs in the River Run area.

“We recommend that citizens be aware of their surroundings, take necessary precautions with their children and pets, and call 911 if they see these wild dogs, so that animal control can help us catch them,” said Davidson Assistant Police Chief Chuck Hunter.

The below information was distributed by River Run's POA management company in an email to residents on Tuesday morning.

ALERT - WILD PACK OF DOGS IN RIVER RUN

Davidson Police have been searching for wild dogs in the River Run Development for over two weeks. The dogs travel in packs of 3 to 5, and have attacked and killed two cats on owners' property on River Ford Drive at Maplecroft Lake Lane.

Please take precautionary measures with your pets and small children, and call Davidson Police with any and all information that may lead to the whereabouts of these dangerous animals.

If you live on the South and East sides of Davidson would suggest that you have your neighborhood at your way distribute something similar.

Be careful out there!

Update: A reader over on Facebook who lives in River Run had this to say...

"My guess is that they are coyotes. They are all over River Run, especially on Rocky River Drive. See them all the time. They travel in small packs."

Makes a lot of sense.  Coyotes in Davidson...who knew???

Changes for the Better in Davidson's Affordable Housing Policy

This post originally appeared in the Herald Weekly at HuntersvilleHerald.com

For years, Davidson’s affordable housing program has been the crown jewel of the town’s progressive planning policies.  As one of only three mandatory programs in the state, it is held up as something that makes Davidson special.

The program has staunch defenders, and support for the program is something of a litmus test for elected officials in spite of the program’s limited impact.

Since its implementation in 2001, just 56 units have been built via the ordinance with many of the homes ultimately selling to people making more than the program's income thresholds due to trouble finding buyers with incomes under the required limits.

During that same time period, the town’s population has grown by over 4000 people – a fact that highlights people being able to move to the town and still find housing.

Recently, the town fended off a lawsuit challenging the program's legality – choosing to settle with developers rather than risk the expense of going to court.  The settlement permits the developer to fully buy out of the program requirements at a much lower rate than previously allowed.

So, with all of that as backdrop Commissioners came to last week's Board meeting looking ready to make substantive changes to the program making it more flexible and reasonable.

First, there was a public hearing on changing the ordinance to mimic the recent legal settlement allowing developers to buy out of building any affordable housing, not just the lowest tier in the program for those making less that 50% of the area Average Median Income (AMI).  Developers would be able to do so at a reduced rate of just over $26,000 per unit - a 50% reduction from the current amount.

Before the hearing opened for public comment, Commissioner Rodney Graham, himself a builder who has built affordable housing, offered a preliminary defense of the change, Graham said some developers may still find it “economically viable” to build rather than do the payment in lieu.  This appeared to anticipate the challenges that would come in the hearing itself from Planning Board members Brunson Russum and John Kennedy.

Russum said the  low payment in lieu will incentivize developers to make the payment rather than build housing.  Russum felt that at just over $26,000 per unit the PIL will only “buy you some nice carpet”.  Kennedy said the low cost makes it very easy  not to build the units - leading to clusters of standard housing and clusters of affordable housing.  He colorfully concluded that “separate and unequal was never the intention of the ordinance.”

When asked why the town was considering this change, Town Attorney Rick Kline, responded it was “in combination with the settlement of the lawsuit”.  He went on to say “we thought it would be fair to apply to everybody and not just the parties to the lawsuit.”

Put another way, the town would likely open itself up to further legal challenges if it did not treat all developers equally.

When the Board votes next month on this change, don't be surprised if it unanimously passes.

The second affordable housing related change on the agenda involved approval of a new affordable plan for the Bradford neighborhood.  For years, the neighborhood has fought to change the approved plan to remove a 10 unit rental apartment building and replace it with more dispersed single family homes.

Last week the neighborhood finally got its wish.

The town approved a new plan that requires 8 new affordable single family homes as well as one duplex.  Furthermore, all of these homes will be in the highest tier of the plan – the 80% to 120% AMI.  The plan also includes a major reduction in the deed restriction period from 99 years down to just 10 as well as requiring the units be owner occupied and not rentals during the deed restriction period.

The much shorter deed restriction period should help program sales by removing a component most buyers strongly wish to avoid.  Putting the units into the highest tier of the program’s AMI allows builders to still make a profit on the houses rather than losing money which incentivized them to actually build rather than buy out of the program.

Don't be at all surprised if similar changes to these eventually work their way into the ordinance itself.  Not only is it fair to buyers and builders, they also generate units on the ground.

The irony in all this  is that on the same night Commissioners received concerns from Planning Board members on one proposed change to the program - concerns based on doctrinaire inflexibility – Commissioners approved another change that actually proved those concerns wrong.

All it took was a little flexibility.

The public-private revolving door, small-town style

This post originally appeared in the Herald Weekly at HuntersvilleHerald.com

The two recent pieces on the intersections of government, business, and large projects have produced record numbers of pave views.  Those pieces were about the I77 HOT Lanes project generating a lot of recent controversy.

However, you do not have to look at just large projects involving hundreds of millions of dollars to see examples of the revolving door between the public sector and private sector.  Instead, you can see it on a smaller scale here locally by looking at the long-standing symbiotic relationship between the Planning Department in the town of Davidson and the local office of the St. Louis based architecture and design firm, The Lawrence Group.

The Lawrence Group local office was opened in 1997 by Dawn Blobaum and Brunson Russum, names that are familiar around town. Two years after helping open the new office Blobaum moved over to town hall becoming Davidson’s Assistant Town Manager – a position she has held for over 16 years.  Russum has since left the firm as well, but he has also remained heavily involved in town issues.  He currently sits on the town’s citizen-led Planning Board.

Beyond just Russum and Blobum, the revolving door between the town and  the firm has continued with other hires.  More recently, the two newest members of the town planning staff, Trey Akers and Chad Hall, also sport Lawrence Group alumni status on their resumes.

Over the years, the firm has become the go-to choice for town hall completing multiple small-area plans, helping with the recent planning ordinance re-write, converting the old pump house into offices for the Parks Department, as well as doing the design for the new pedestrian bridge at Roosevelt Wilson Park.  One could say the relationship goes back to before the firm’s local office even opened.  Another Lawrence Group alum, David Walters of UNCC, helped with the town’s original land plan back in 1995.

One could argue the merits of some of the projects, but it seems beyond debate the firm has had a lasting impact on the town.  For its part, the firm has benefited from the relationship beyond justthe fees generated over the years.  The firm’s work in Davidson features prominently in some of its sales literature as wells as on its website.

However, all of that hopping between the public and private sectors has also created gray areas in how the town does business and how business gets done in town.  Two examples come to mind.

Readers may remember the controversy when the Davidson Green School opened in town in late 2013 and early 2014.  The town staff clearly liked the idea of having the new school and supported its request to change a single-family home into a commercial use.  However, that proposed change was challenged by a neighbor saying it was not the kind of change that could simply be approved by staff.  The issue ended up before the Board of Adjustment.

In this situation, the architect on the project was Dave Malushizky of the Lawrence Group.  Malushizky is now the principal at firm’s local office.  On the Board of Adjustment for this quasi judicial hearing, sat Brunsun Russum.  Russum and Malushizky had previously worked together at the firm.  Under the rules governing conflict of interest in a hearing like a Board of a
Adjustment, Russum could have been recused from the panel, but he was not.  In the end, the vote was 3-2 in favor of the town with Russum voting in the majority.

Would a different panelist in that hearing have given a different result? Who knows?  However, when town staff, a related party to one side of a dispute, and a member of the jury are all former employees of the same firm, it certainly does not look good.

The second example is more recent.

At the recent Planning Board review of the Narrow Passage project proposed for Davidson’s ETJ, again both Russum and Malushizky were on the same side supporting what town staff wants – which is a delay (at a minimum) of the project.  Russum was one of the more outspoken board members opposing the project.  Malushizky actually spoke against the project or at least its timing during the public comment session.  While he did not mention he was speaking on behalf of the Lawrence Group, he did mention multiple times the need for a small-area plan for the area – the kind of plan the Lawrence Group has done for the town in the past.

Again, not something that looks good.

As is often the case in these kind of relationships, it may be as much about who gets what they want and who gets paid as anything else.

Bonus Observation #1

Tying in with the previous story on town attorney Rick Kline and his real estate law business, the Lawrence Group shows on their website the original design for Davidson East - before the lawsuit with CommunityOne Bank, before the current plan from Southern Pacific.  Rick Kline was involved in the Davidson East LLC, listed as the registered agent for the company in the NC Secretary of State website.

Bonus Observation #2

It was discussed at town hall this past Tuesday that the town may bring in Craig Lewis from Stantec on 7/28 to discuss the need for a rural small area plan.  Lewis was the main principle at the Lawrence Group local office prior to Dave Malushizky.  Pretty sure the opinion of  Stantec/Craig Lewis won't be much different than Lawrence Group/Craig Lewis.

Mayor Woods Files for Re-Election - Calls for "Stability"

Filing for this year's municipal elections kicked off on Monday.  So far, in Davidson only Mayor John Woods has filed for the top office in town.

In an email to supporters after filing, Mayor Woods said

"Our community faces major challenges in the coming years including the continued economic vitality of the commercial areas,  job creation, neighborhood support,   increased residential development pressures, the continued need for housing affordability, and a greater need for regional partnering to best enhance our quality of life.    With Town Manager Leamon Brice ending his twenty-five year tenure and the hiring of his successor, management stability is a major focus.  The development of transportation alternatives including public transit is a key issue.  Effective communications will always be a major focus."

Last cycle the mayor ran unopposed, but this email sounds like he expects a challenger this time.  Any challenger would have a target-rich environment when looking at Wood's record.

Over the course of Wood's tenure as Mayor we've seen the town burdened with subsidies for Mi-Connection - a purchase Woods championed as a commissioner.  Davidson has maintained by far the highest tax rates of any of our neighboring Lake Norman area towns.  The town has implemented the highest solid waste fee of any area municipality - one that is several times most others.

A champion of affordability, he is not.

As the chair of the Red Line Taskforce, Woods allowed the town to spend untold numbers of hours supporting a financing plan for the rail project without ever securing actual permission from Norfolk Southern to use their property for the project.  The Mayor has also been a very active supporter of the plan to toll I77 with HOT lanes - coming to its political rescue on a number of occasions

A visionary for sound transportation planning, he is not.

Finally, when it comes to communication, Mayor Woods has a habit of saying that anyone he disagrees with is spreading "misinformation".  That's just a nice way of calling someone a liar.  He has likened toll road opponents to "invaders" when they show up at meetings.  He has often brow-beaten commissioners in efforts to control the agenda.

A great communicator, he is not.

Let's hope someone steps up to the challenge and at least makes Mayor Woods work for it this time.  We could do with a little less of that kind of "stability".

Incumbent commissioners Stacey Anderson, Jim Fuller, and Brian Jenest have also filed for re-election to the Board.  Filing continues through Friday July 17th at noon.

ALEC: The best connected toll road lobbyist in North Carolina

If last week's post on lobbyists surrounding the I77 HOT lanes project with links to Governor Pat McCrory gave you an upset stomach.  This one is likely to make your blood boil.

Many readers who follow the HOT lanes issue or politics generally are familiar with ALEC.  For those who are not, the American Legislative Exchange Council is a policy generating body made up of corporations across all types of industries and state legislators from across the country.  The organization generates model legislation to help corporate interests and then pushes that legislation through its membership at the state level.

The body gained some notoriety locally over the past few years because Senator Thom Tillis was honored as one of its "legislators of the year" while he was the Speaker of the House in the North Carolina General Assembly.

Before, during, and after that time, ALEC has had a seat at the table at the highest levels of our state government.  The story about how that has driven the implementation of HOT lanes on I77 provides a  clear window into how this organization gets things done.  Read all the links if you have time.  The entire picture is a real eye-opener.

Our small part of the story starts at the August 2011 ALEC meeting in New Orleans.

At this meeting In 2011, NC Speaker Thom Tillis received the ALEC Legislator of the Year award.  On this boondoggle trip to New Orleans he was accompanied by several members of the NC General Assembly.

That meeting also happened to feature presentations and sample legislation around Public Private Partnerships - presentations delivered by Cintra and Macquarie.  Cintra of course is the I77 contractor and Macquarie was mentioned in last week's post as having connections to a former NCGOP Executive Director's lobbying firm.

Almost immediately after returning from the August ALEC meeting, Speaker Tillis established the House Select Committee on Public-Private Partnerships.  See this document issued September 15, 2011.  Notice who is on this committee.  It is Co-Chaired by Matthews Rep Bill Brawley.  It also contains a name less familiar in the Mecklenburg County area - one Fred Steen.

Who is Fred Steen?

At the time, Rep Steen from Rowan County was the State Chair of ALEC in North Carolina.  His current job is serving as Governor Pat McCrory's liaison to the General Assembly - making him effectively the governor's chief internal government lobbyist.

The House Select Committee on Public Private Partnerships soon had a visitor from the firm McGuireWoods Consulting for a discussion on the benefits of  P3s.  In January 2012, this presentation was given to the committee.  Similar presentations to the one at the previous link have been delivered around the country to various state bodies.  If you google "McGuireWoods Consulting American Legislative Exchange Council" it is clear these two organizations cross paths very regularly.

Then in may of 2012 comes House Bill 1077.  The short title of the bill is "Increase DOT Public Private Partnerships".  However, this would soon change to be I77 specific.

On June 26th, in the House Finance Committee a Proposed Committee Substitute or PCS was passed.  PCS30660  had the title "An Act to Establish a Pilot Project for Tolling the I-77 High Occupancy Toll Project."  According to the NC Legislative Library, the motion to submit this PCS was made by Harry Warren of Rowan (just like Mr Steen)

Who is Harry Warren?

In 2011, he was a freshman legislator.  He had come to Raleigh after the 2010 wave election where the Republicans gained control.  Warren won by a razor thin margin, defeating a Democrat incumbent by only 166 votes.  He was then put on the influential finance committee.  Warren also attended the 2011 ALEC meeting in New Orleans where then Speaker Tillis received his legislator of the year award.

Now, if you know how the legislature works, a junior member like Warren certainly did not propose tolling a highway in another district without being told to do so.  There are not typically any recorded votes in committees and PCSs do not have "sponsors" like the original bills, so more detail is not easily available.  However, one can say this committee is where the sausage of tolling I77 was made.

Incidentally, there was another freshman member of that same committee - Rep Jason Saine of Lincoln County.  Saine has risen rapidly in the ranks at ALEC.  He now serves on its national Board of Directors.

Once H1077 passed by mid-July 2012, the project's fate was sealed so to speak.

So, in less than a year, all of the following happens.  Cintra makes a presentation at an ALEC meeting in New Orleans where Speaker Thom Tillis receives an award with several NC legislative members in tow.  A House Select Committee is then setup for Public Private Partnerships.  A consultant with numerous connections to ALEC gives a presentation to that committee giving the appearance of actually doing some research.  A bill is submitted.  A freshman member who owes the Speaker his seat in a very tight election proposes a change to the bill targeting I77.  The bill passes.

Cintra ultimately gets the contract for I77 as the single bidder.

Add to that these facts.

Another member of the same committee which specifically targeted I77 is now on the ALEC national board (Rep Jason Saine).  Also, a former ALEC state chair served on the PPP Select Committed and also serves as the Governor 's legislative liaison (Rep Fred Steen).  He is in a position to help ram this all through.

And there you have it - an unparalleled list of connections, leading to unparalleled power!

String all of that together and the I77 HOT Lanes project leads right to ALEC's doorstep.

Again, all this took was a little googling, and someone with more time on their hands should really look into these things.  North Carolina will be a center of gravity during the 2016 elections.  The NC Governor's race is regularly ranked as one of the top five in the country.  North Carolina will be a swing state in the presidential race.  These kinds of stories matter.


Major hat tips to the following sites for pulling some of this information together.  Strongly recommend checking them out if you want to learn more.

http://ashevillewater.blogspot.com/p/privatization.html
https://friendsofthecoloradopuc.wordpress.com/what-is-alec/
https://alecinnc.wordpress.com/tag/north-carollina-alec-members/

Is there a River Run phase six?

That’s effectively the question being asked by a letter received by the town on June 13th from an attorney with the Hedrick Gardner law firm in Charlotte.  Writing on behalf of the River Run Courtyard Association – a sub-association of the larger River Run neighborhood – the firm raises several questions about some proposed new lots in the River Run area of Davidson.

In a column in early April, it was mentioned that the River Run Country Club wants to convert some of its golf course property to residential lots.  If successful, these sales would bring in several hundred thousand dollars to the club.

There have been several questions about the buildability of the land because it is significantly impacted by current flood plane lines.  However, beyond just the environmental questions homeowners have been questioning whether subdivision of these lots follows current town ordinances and procedures.

The Club has been pursuing an administrative approval from the Davidson Planning department to plat the lots for sale.  The neighborhood association letter contends that the development of new lots in the proposed part of the neighborhood should not be allowed under the ordinance which brought River Run into the town back in 1992.

If anything it would appear that this should be approached as more of a new development involving a change of use from golf course to residential and approval from the town board itself – not an administrative change.

The association’s attorney sums it up by saying “the River Run Country Club’s request to plat lots on Wildcat Trail and River Crossing Blvd. is a violation of town ordinances and not substantiated by fact, or the record. The Association strongly urges the town to reject the River Run Country Club’s request.”

All of that may seem like rather mundane land development back and forth.  However, that is not the most interesting part of the letter.  The association’s attorney closes with this.

“Should the town believe that further legal opinion is necessary; the Association asks that such opinion be obtained from an outside council. Town attorney Rick Kline, is as a founding member of River Run Country Club and has advised the Country Club on this matter. Furthermore, his long tenure as the council of record for River Run Limited Partnership, and thus, his probable involvement in drafting documents for both the Partnership and the Town, that are a part of the record, makes obtaining an outside opinion the only legitimate way to insure that the rendered opinion is unbiased and without even the appearance of impropriety.”

Ouch!

For those keeping score, this is now the second time in recent months that a homeowners’ association in Davidson is officially questioning the town attorney’s role in land development in town.  The first was by the Bradford neighborhood at the end of last year for Mr Kline's role representing that neighborhood’s developer.  In that instance, Mr Kline was asked to get an opinion from the State Bar on his involvement.  As of this writing, the neighborhood has not heard back on the outcome of that request.

Based on reviewing public record emails, when Mayor John Woods saw the letter from the attorney in the current River Run Club situation, he quickly came to Mr Kline's defense.

However, that defense was roundly refuted by the HOA with several examples of Mr Kline's involvement.  These examples took place over several months and include references involving senior town staff, the Planning Department, and regular citizens.

One of those references refuting the mayor’s defense is very direct.

In early October the club’s developer sent an email to a River Run resident concerned by the lot proposal, stating, “A Club member and attorney, Rick Klein has been kind enough to participate in the plat recording process to be assured that the plats correctly reflect all these restrictions.”

In another instance the town attorney’s advice to staff  that these lots would be “grandfathered” under the original zoning for the neighborhood was actually refuted by the town manager, Leamon Brice.

Based on speaking with people familiar with the situation and reviewing the public record, multiple attorneys have reviewed this proposal as well as other planning professionals and even the UNC school of government has been contacted.  Nobody appears to think these lots should be approved without a much more involved process.

Davidson’s town attorney has been with the town for nearly four decades.  He’s also been in private practice as a real-estate attorney during that time.  After seeing the recent repeated examples where things become a bit too gray between those two jobs, it may be time for the Town Board to ask him to choose which one he would rather do.

This post first appeared in the Harold Weekly opinion section at huntersvilleHerald.com