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Pay to get paid and the City of Greensboro

by George Hartzman

A September 2012 Greensboro City Council agenda packet “Report of Disbursements” detailed a $200,000 payment to Koury Corporation, dated  July of that year. The payment was for expenses related to a booster pump system at The Village at North Elm. Greensboro’s City Council did not vote to approve the payment.

The “reimbursement” to Koury Corporation was denied by prior city manager Rashad Young. The 2012 payment was advocated for, without transparent public disclosure, by former City Manager Denise Turner Roth, and approved by former city attorney Mujeeb Shah- Khan as a “Settlement of Claims.” This avoided the payment being a publicly disclosed reimbursement requiring a City Council vote.

In December of 2011, Kenney McDowell, then Interim Director of the Water Resources Department, objected to the reimbursement request.

“Water Resources continues to recommend denying the request to reimburse for a domestic pump for this Koury Development,” McDowell wrote in an email. “Should it ultimately be determined politically to pay, you should see what they actually spent. If it is more than 50K it’s too much in our opinion.”

“When any project is designed, the engineer on the project is responsible for determining the pressure needs of a project and addressing those during design,” McDowell wrote. “Our Rules and Regulations do not guarantee pressure and that is reiterated on our water permits.”

City of Greensboro regulations state “The City does not guarantee the quality, quantity or pressure of its water supply.”

The City of Greensboro appears to have taken responsibility for what it wasn’t responsible for, at the expense of taxpayers who weren’t informed.

In the same email thread, then Assistant City Manager Michael Speedling wrote “If we approve this request it will open the door for many more.” This seems like a good reason for city executives to hide the payment in 2012, to prevent less connected businesses who spend money on the same thing to ask for taxpayer reimbursement.

The emails indicate Koury asked to be reimbursed for what other local businesses had to pay for.

The payment was approved by City Attorney Mujeeb Shah-Khan, even though two different City Council agenda items, which stated “The city manager recommends that city council approve this settlement…”, were created at the behest of former city manager Denise Turner Roth, who was listed as the main contact. Turner Roth served on the Greensboro Partnership board of directors with Koury CEO Steven Showfety while she worked at the Partnership as its “Vice President for Governmental Affairs”, otherwise known as a lobbyist.

The agenda item that Greensboro’s City Council and the public never saw said “The City … received a claim from Koury Corporation for damages sustained by Koury during construction of the … development at North Elm Village on Pisgah Church Road. At that time the City interpreted the Building and Fire Code to require Koury to …maintain water pressure in all buildings … Subsequent to this, during the NC Building Code triennial revision, the … requirement was reduced, making the booster pump and backup generator no longer necessary.”

Subsequent means after, and so the city correctly told Koury what to do according to a code that existed at the time.

After the state changed the code, Koury received a “settlement” for expenses the city did not legally owe, yet paid anyway.

I received an email from Shah-Khan stating: “While it was initially thought Council approval might be needed, the City Charter permits the Manager to resolve claims like Koury’s.”

The Charter states: “The city manager may settle claims against the city for: …damages to property when the amount involved does not exceed the sum of three hundred thousand dollars ($300,000) and does not exceed the actual loss sustained.”

The “settlement of claims” language cited by the former city attorney made the payment sound as if the issue at hand was the city’s fault.

The original denial and subsequent actions by Shah-Khan and Turner Roth indicate that the City of Greensboro didn’t damage Koury’s property.

The city correctly told Koury what to do according to state code that existed at the time, and after the state changed the code, Koury received a “settlement.”

Taxpayers funded a payment that contradicted City of Greensboro rules and regulations, and was caused by a building code change at the state level, after the pumps were installed.

After the state changed the code, Koury received a “settlement” for expenses the city did not legally owe, yet paid anyway.

Most businesses don’t receive such special treatment from the City. It was in the best interests of those allocating the money to not publicize what appears to have been a gift to a company whose employees are politically well connected.

The City of Greensboro provided what appears to be an incomplete accounting of various payments to Koury Corporation since 2003 totaling more the $1.5 million.

Several Greensboro City Council members, some of whom have received contributions from Koury-related do nors, were unaware of the payment. In 2013’s City Council election, multiple Koury-related donors gave to Robbie Perkins (9), Mike Barber (5), Marikay Abuzuaiter (5), Yvonne Johnson (5), Tony Wilkins (5), T Dianne Bellamy- Small (4), Jim Kee (5), Zack Matheny (5) and Nancy Vaughan (6). Marikay Abuzuaiter has asked for, and not received, information concerning the Koury payment at two different City Council meetings. She has yet to receive a response from city staff.

Zack Matheny’s congressional campaign announcement took place at Koury Corp’s airplane hangar. While serving as chair of the City’s Economic Development Committee, Matheny advocated and voted for a $600,000 “shovel ready” loan for a project related to Windsor Development Group, whose “member/manager” David Howard’s list of accomplishments includes eight Koury related development projects including Four Seasons Town Center, Sheraton Hotel Tower, Grandover Resort and the Villages at North Elm, the subject of the “Settlement of Claims” cited above.

As the News and Record’s Amanda Lehmert reported: “If the council approves Matheny’s plan, the developers would get the loans at 1.38 percent interest. The developers won’t have to pay the interest for five years or until the property sells, whichever happens first.” Lehmert also reported: “The city gave $1.08 million four years ago to ready [David Howard’s] park for development. The council’s decision on whether to pay for the projects comes three weeks before the City Council elections.”

In 2013, David Howard contributed campaign cash to Matheny and Perkins.

I believe this represents favoritism for some who are connected to the establishment, at the expense of everyone else who isn’t.

Taxpayer monies provided without public transparency to an influential company whose employees and family members are regular donors to Greensboro City Council campaigns should raise serious concerns as to how our city’s discretionary financial payments are handled.

This issue needs to be investigated and fixed for our community to have a level playing field to offer businesses looking to expand or relocate.

I believe Koury Corporation should give Greensboro’s taxpayers their money back. !

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