After more than a year, Raleigh incubator scandal unresolved

It’s been two years since the city shut down a city-funded business incubator in Southeast Raleigh, and more than a year since police arrested one of the incubator’s leaders on embezzlement charges.

But the city has yet to retool the incubator, known as the Raleigh Business and Technology Center.

And Wake County prosecutors have yet to bring their case against Lawrence Wray, a former incubator board member and assistant city manager who was arrested in November 2014 on charges of embezzlement and obtaining property by false pretense.

Now, Southeast Raleigh residents are frustrated with the lack of progress and believe that they’re being left in the dark, said Octavia Rainey, chairwoman of the North Central Citizen Advisory Council.

“The entire process has never been transparent,” Rainey said. “We never could really wrap our hands around what really happened, what’s happening now and where we’re going.”

Private organizations formed the incubator in 2000 to spur economic development in the southeastern part of the city. It received funding from the city and operated rent-free in a building on South Wilmington Street until a 2013 audit found evidence of mismanagement and fraud. The city then retracted its funding to the incubator, which topped out at $162,000 a year.

The incubator and the case against Wray have remained in limbo since then.

Wray’s case remains pending in Superior Court mostly because the Wake County District Attorney’s Office has been unable to meet with his attorney to discuss the charges, Deborah Shandles, the assistant DA handling the case, said earlier this week.

“It’s been hard for us to set up a time to talk,” she said of Wray’s attorney, Duncan McMillan. “It’s been longer than I’d like but not terrifically long for these things.”

McMillan didn’t respond to requests for comment.

Wray, who receives an annual pension of $134,283 from the state until he dies, according to the N.C. Treasurer’s Office, is charged with a class H felony and could face a maximum of 39 months in prison, Shandles said. But Wray doesn’t have a criminal past and is unlikely to receive that harsh a sentence, she said.

Shandles said Wray could just face probation. “I expect we’ll try to meet within the next few weeks and see if we can’t talk this thing out,” she said.

The city, meanwhile, last year solicited bids from companies interested in running the incubator and received two offers.

Larry Shaw, a former state senator from Fayetteville, submitted a proposal under his business, Geometric Solutions. Shaw suggested a new model for the incubator, with a large focus on training and mentoring.

The other proposal came from a joint effort of the Raleigh Area Development Authority, Shaw University, HQ Raleigh, The Support Center, American Underground, Triangle Family Services and Venture Management.

The group suggested it could offer a wide range of services to future incubator tenants, including education, training and financial assistance. The proposal sought to allow outside community groups to participate in certification courses and hold other events.

But city staff denied the proposals in November, mostly because neither lead applicant had experience managing an incubator. The move drew criticism from applicants and Southeast Raleigh residents who met with city staff at the Chavis Community Center on Monday.

The City Council will ultimately decide how to proceed with the process, which could include revising the proposals already received or making an entirely new request. But several residents said they were upset because city staff didn’t consult them before rejecting the proposals.

“We don’t trust the city for reasons like this,” said Danny Coleman, chairman of the South Central Citizens Advisory Council. “Decisions are being made without community input.”

Representatives from some of the organizations that proposed to take over the incubator said the city was never clear about what it would like to see for the center.

“I don’t think the city can articulate what that vision is,” said Wallace Green, a member of the board of directors at the Raleigh Area Development Authority.

John Miller, chairman of the development authority’s board of directors, said the city’s reasoning didn’t make sense. Two of the partners included in his organization’s proposal – American Underground and HQ Raleigh – are successful, award-winning incubators.

City leaders have promised to reopen the incubator, and city staff echoed that vow to Southeast Raleigh residents on Monday.

“We’re going to make this happen if it’s the last thing I do,” said Assistant City Manager Marchell Adams David.

This story was originally published January 14, 2016 at 7:26 PM with the headline "After more than a year, Raleigh incubator scandal unresolved."