Cindy and Peter Emens: A bad deal for taxpayers
07/18/2014 12:00 AM
07/15/2014 12:43 PM
A bad deal for taxpayers
Members of CaryWatch carefully monitored The Mayton Inn developments since the project was announced, and we questioned the following:• The absence of public solicitations and bids for “opportunity site” proposals.
• The “sole source” contract with a superabundance of public subsidies to Durham bed-and-breakfast operators who are not uniquely qualified as hoteliers or experienced developers.
• $6 million in taxpayer money and services for a $12 million privately owned hotel and only 40 low-paying jobs.
• Transfer of land for $951,000 that cost Cary taxpayers $1.8 million (appraised at $1.7 million) with no down payment and deferred interest and principal for 10 years on an uncollateralized promissory note.
• Commitment by the town to provide $1 million for infrastructure, pre-development and streetscaping.
• $1.3 million in waived developer fees.
• $1.4 million unsecuritized personal loan to the developers using money the town borrowed from HUD’s Section 108 Program.
• An intercreditor agreement subordinating Cary taxpayers’ rights as creditors to third and fourth place on a project that lacks sufficient brick and mortar equity to fully secure its indebtedness.
• Failure by the town council to provide the same indemnifications that the private lenders required to protect their stockholders from risk and loss.
• Perfunctory approvals by the town council on a “done deal” cut by staff member Ed Gawf.
CaryWatch consistently advocates for transparent governance and fiscal responsibility. Obviously, town officials believe Cary taxpayers can afford a $6 million gift to the hotel developers, or this agreement would have been structured much differently.
Cindy and Peter Emens
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