We sure know how to keep federal investigators busy here in North Carolina. Robin Hayes, David Lewis, and now The City of Rocky Mount:
State Treasurer Dale R. Folwell, CPA, said federal criminal charges against the developer of Rocky Mount’s multimillion-dollar downtown development project cast a troubling shadow on the venture.
“In light of the serious nature of the indictment, a prompt and thorough investigation is warranted before any taxpayer money is approved to pay for this project. As keeper of the public purse and chair of the Local Government Commission (LGC), which approves the issuance of public debt, I have an obligation to inquire about potential waste, fraud or abuse,” Treasurer Folwell said, while noting there must be a presumption of innocence until proven guilty.
“I would be highly disappointed if the elected officials in that community or this state would not be in favor of looking more deeply into the finances of the city of Rocky Mount and this project specifically,” Treasurer Folwell said.
David Hunt, the Tennessee developer chosen to lead the development project, was one of four people indicted by a federal grand jury in Mississippi in an alleged illegal bid-rigging scheme at the Mississippi Department of Education. The charges are not connected to the Rocky Mount project, which includes a downtown hotel, parking garage, retail spaces and housing.
In August 2019, the Rocky Mount City Council passed a resolution authorizing the submission of the financing application to the LGC. The Rocky Mount city manager has since placed a hold on the project and announced the rescission of the application. The mayor has urged the City Council to investigate the situation.
“The Rocky Mount City Council, not the city manager, needs to pass a resolution withdrawing the application,” said Treasurer Folwell. “That’s the best way to properly halt the LGC’s process.”
Treasurer Folwell said the criminal allegations are distressing for the commission, which was reviewing application materials for nearly $18.4 million in financing for the parking garage portion of the project.
“In light of this troubling situation, it would be natural for the LGC to question whether the city followed appropriate procedures in previous financing decisions, such as bond financing of up to $44.5 million that the LGC approved at the city’s request in 2016 to build the downtown Rocky Mount Event Center,” Treasurer Folwell said. That work was done by a different developer, not by Hunt.
The Hunt indictment follows a scathing report released in May by State Auditor Beth Wood, a member of the LGC. A state audit revealed that city officials gave preferential treatment to a council member to prevent utility disconnection and avoid nearly $50,000 in payments; the city suffered $60,000 in uncollected loans and improperly awarded funds; and the city manager incurred unallowable travel expenses.[…]