Business incubator gets to stay in city’s building

ccampbell@newsobserver.comAugust 9, 2013 

— A Wake County judge has again delayed Raleigh’s attempts to evict a scandal-ridden business incubator from its city-owned building.

Superior Court Judge Lucy Inman gave the Raleigh Business and Technology Center a 10-day reprieve from eviction on July 31, and she extended that delay Friday. The center’s employees can stay put until the end of the year or until the center’s lawsuit is resolved – whichever happens sooner. The center must, however, provide its current financial records to the city and pay a $22,222 bond. The bond money represents rent revenue the building’s operators will collect from office tenants.

Raleigh leaders had ordered the incubator to leave following a scathing audit that found financial mismanagement at the 13-year-old nonprofit, designed to nurture minority start-up businesses in Southeast Raleigh. The incubator has been allowed to occupy the building rent-free. Located south of downtown, it was built with funds from local governments and universities in 2000.

Attorneys for the incubator are suing to stay put. They say its lease is valid through Dec. 31, even though the agreement was never signed. City attorneys counter that an unsigned lease isn’t valid – especially since records show that no money ever changed hands.

Deputy city attorney Dorothy Leapley said that allowing the nonprofit to stay could run afoul of Raleigh’s grant agreement with the U.S. Department of Commerce that helped fund the building’s construction.

“The mortgage limits the use of that building to an incubator,” Leapley said. Because they no longer have a contract with the city, they are not contractually obligated to provide incubator services.

Inman’s ruling Friday doesn’t address whether the Raleigh Business and Technology Center has a valid lease. Instead, she approved the delay because the nonprofit proved an immediate eviction would cause “irreparable harm” – namely that it would go out of business. A judge will hold a full hearing and hear testimony in the coming months.

The incubator’s leader, former Raleigh assistant city manager Lawrence Wray, has put together a restructuring plan and blames the financial issues on former director Bob Robinson. Wray wants time to persuade the city council to keep the nonprofit.

The city, however, is already working on a new way to deliver similar services to help small businesses.

Campbell: 919-829-4802 or twitter.com/RaleighReporter

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