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On Crony Capitalism in Greensboro

by George Hartzman

For the second time this year, Greensboro City Councilman Zack Matheny, a US District 6 Congressional Candidate, voted against financial incentives for a company looking to bring jobs to Greensboro. The two votes contra dict most of Matheny’s voting history, especially as chairman of the city’s Economic Development Committee.

The latest $42,000 incentive requestA Matheny voted against involves the creation of 47 new jobs by MWI Veterinary Supply Inc. The company said it wanted to create a wholesale supply distribution center.

The first Matheny no vote came at a special meeting the day before Robbie Perkins was to leave office. That package would give $7.85 million of taxpayer money to help pay for replacing a parking deck with one suitable for a hotel.

The News and Record’s Kelly Poe reported Matheny saying at the time: “We have studies up the wazoo on the fact that we need (a parking deck), whether there’s a hotel on top of it or not.” The proposed taxpayer funded parking deck would have increased parking by 100 spaces, which could be reserved by the hotel when needed.

Matheny received in October 2013 a contribution from Randall Kaplan, a principal of the group who asked for the $7.85 million from Greensboro’s taxpayers. On November 15, 2013, Matheny wrote Kaplan and others in response to the public disclosure and my criticism of the incentive request: “Don’t sweat this, we knew it would come. Let’s stay focused on creating the best plan possible in order to create an opportunity to make some real positive investment in Downtown Greensboro.”

Randall Kaplan wrote back “Much thanks to Robbie and Zack and the other members of city council who work tirelessly for the benefit of the city with little reward and great personal sacrifice.”

Robbie Perkins received contributions from Randall Kaplan, and another Kaplan family member, before the end of October 2013.

The email exchanges sound like Perkins and Matheny worked “tirelessly for the benefit” of their campaign financiers.

Randall’s wife, Kathy Manning, gave an in-kind contribution for a fundraising event for Nancy Hoffmann, who voted for a $1.97 million incentive for the hotel deal at the location for the new project in Matheny’s district, which Zack voted against.

Matheny was the lone Councilman who didn’t speak for or against the project. The Rhino’s Paul Clark wrote:

“Matheny, usually a vocal supporter of incentives, voted against this one without comment.” The News and Record’s Amanda Lehmert reported: “Matheny’s opposition to the incentive was particularly strange, since he had spoken in favor of the project in the past. He’s also been an unabashed cheerleader for the council’s economic development ventures. …”It was out of my comfort zone,” Matheny said, “It’s too much for me personally.”

After local blogger Billy Jones asked for any city business-related text messages sent to and from Councilman Matheny during the Greensboro City Council Meeting when the vote took place, the city responded: “I am sorry but Mr. Matheny does not have any records that match your request.” Matheny later replied in emails involving local bloggers: “I have not sent any texts about the proposed hotels.” The issue remains unresolved, as Matheny subsequently provided some texts about the proposal, contradicting his statement. So far Matheny has declined to provide his text and phone log.

In striking contrast to Matheny’s no vote, last summer Matheny voted for a $150,000 incentive to relocate a corporate headquarters to Greensboro. The offer was higher than what the city’s guidelines say should be offered. Matheny attempted to push through a change to the city’s incentive policy to allow the monies to be allocated. “The reality is, we have got to be as flexible as possible to recruit business to Greensboro,” Matheny said.

Matheny received contributions from John Lomax and DGI Board Chairman and Real Estate Broker Sam Simpson, who both stood to benefit from the deal. Lomax, who also donated to Nancy Hoffmann, owns the building that would have received the taxpayer funded benefits. The targeted company declined the incentives Matheny brought to City Council for Messrs. Lomax and Simpson, and is moving its headquarters to Greensboro anyway.

An email to former City Attorney Mujeeb Shah-Khan stated: “Under the current structure of the incentive, Mr. Lomax is not “creating jobs”. …Its possible that Council could, in its discretion, find a way to make an incentive for Mr. Lomax, but it will be exceeding its own guidelines to do so.”

Current City Manager Jim Westmoreland followed up with an email entitled “City support programs” informing Lomax “Per our conversation, provided below are two possible support options the City could provide to help you … Downtown Building Improvement Grant Program (new program – pending City Council endorsement in early January, 2014). Downtown Job Creation Parking Assistance – free parking in a City owned parking deck or transit via GTA for a term of 1 year for each new qualifying job created. Must go before City Council for approval.”

A follow up Westmoreland email to Lomax, Sam Simpson and former Greensboro Partnership Lobbyist, and now City of Greensboro’s Economic and Small Business Development Manager, Kathi Dubel said “please do be very sensitive with your communications on the Downtown Building Improvement Grant Program. This item has not yet been formally shared with nor endorsed by City Council so it’s not yet a done deal (even though we do expect it to be endorsed in January and do believe it’s another good downtown ED support tool).”

To my knowledge, the new grant program has yet to be introduced.

I believe Current Greensboro City Council Members and Candidates for local elected office, especially the Chair of the City’s Economic Development Committee, should be prohibited from accepting campaign contributions from board members of organizations, developers, contractors or their lawyers or agents who have or may receive taxpayer funded contracts or monies, for 12 months before and after doing business with Greensboro’s government.

With City Council elections occurring every two years, the end result of the ethics proposal would essentially ban connected campaign cash. !

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