Clause is hitch in Duke deal

Rezoning tied to Durham donation

Staff WriterNovember 13, 2006 

— Whether it is legal for Duke University to pay Durham $2 million in exchange for approval of a road project appears to depend on the interpretation of the term "improvements."

Duke needs the City Council's approval to improve five blocks of Anderson Street. The public roadway is key to the university's plans to redevelop the area between its East and West Campuses for residence towers, retail shops, restaurants and other amenities.

Under an agreement approved Monday, Duke will give the city a $500,000 "donation" upon the signing of a binding agreement that pledges "timely" consideration of the university's plan for Anderson.

The remaining $1.5 million will be granted only upon the city's approval of Duke's Anderson Street plan and "any other necessary approvals required by the city for Duke to undertake the improvements."

That clause gives some legal experts pause.

If the "improvements" referred to in the agreement relate solely to the street project -- as city officials have repeatedly asserted -- then the deal is probably legal, according to David W. Owens, a professor of public law and government at UNC-Chapel Hill.

However, if the "improvements" are in any way related to the approval of Duke's rezoning proposal, then that would be wrong, Owens said.

"Even if the city reserved the right to turn down the rezoning or the site plan approval, the fact that there's $1.5 million that's out there contingent upon approval, I think would pose a significant legal problem," said Owens, who holds degrees in law and planning and who has written books on North Carolina's land-use and zoning laws.

It is illegal under state law for a local government to accept money in exchange for granting regulatory approval. Such a quid pro quo -- a Latin phrase meaning "something for something" -- would be considered tantamount to bribery.

Durham officials are counting on Duke's $2 million gift to plug a gap in the $44 million budget for the city's new performing arts center; construction on the center is to get under way before the end of the month.

Durham City Attorney Henry Blinder advised council members before they voted 5-1 to approve the deal that it is "legally defensible" to accept Duke's gift as long as it is clear to all involved that the $2 million is in no way to influence their decision whether to approve Duke's Central Campus.

David Lawrence, a professor of public law and government at UNC-Chapel Hill with whom Blinder conferred, said he sees a clear legal distinction between the Anderson Street plan and the Central Campus rezoning.

As long as Durham's elected leaders do as well, Lawrence said he does not see where the city has run afoul of the law.

A flurry of e-mail messages posted by those living in neighborhoods near the campus hammered the City Council for the arrangement this week, expressing doubt that the elected officials would forget about Duke's gift when casting their votes on the rezoning plan.

"What kind of partnership is based on bribery?" asked John Schelp, president of the Old West Durham Neighborhood Association. Schelp and others fear that Duke's proposal for new restaurants and retail shops will harm established business on nearby Ninth Street.

Professor Owens said it is not unusual for a developer to offer inducements such as paying for new sidewalks or a new sewer line to help win approval for a development plan. He has never seen another example of a developer making a cash donation directly to the city's coffers, however.

If someone opposed to the rezoning were to sue Durham over the deal with Duke, it would not be a "frivolous" lawsuit, Owens said. "The question a court would be looking at is whether in making the rezoning Durham is motivated by something other than the policy choice," he said.

"Is there a sufficient carrot sitting out there that the decision is made on the basis of that inducement other than the public policy issues presented by the rezoning proposal?" Owens said. "Would a reasonable person have reason to believe that was a factor in their decision making? Then that becomes something folks could argue about."

Staff writer Michael Biesecker can be reached at 956-2421 or mbieseck@newsobserver.com.

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