Durham News

Durham City Council approves payment to The Institute

The Durham City Council voted 6-1 to give The Institute up to $37,000 to cover clean up and other costs following a backup that resulted in sewage flowing into its historic building’s basement.

The vote stipulated that The Institute, (formerly the Institute of Minority and Economic Development), would repay funds it receives from an insurance claim, which it is expected to file.

City Councilwoman Cora Cole-Fadden voted against the motion. She objected to the requirement that the company that owns and has maintained the historic Mechanics and Farmers Bank building be expected to file an insurance claim.

Farad Ali, president and CEO of nonprofit The Institute asked the city last month to cover all the expenses related to a clogged manhole on Mangum Street that caused about 8,000 gallons of sewage to enter the building’s basement in March. On Monday Ali said that insurance may pay up to $5,000 for the clean up.

The Institute paid about $52,000 to clean up the area, replace furniture, computers and repair the elevator, said Ali, a former City Council member.

The N.C. Mutual Life Insurance Co. built the neoclassical, revival-style structure at 116 W. Parrish St. The building was completed in1921, and Mechanics and Farmers Bank moved its headquarters to the first floor the next year.

The Institute purchased the building, a national landmark, in 1999.

Glenn LeGrande, the city’s risk manager, has said an investigation into the backup deemed that there was some concrete-like material in the main line, but the city didn’t have any notice of the problem in the line. A city ordinance states that in situations in which the city doesn’t appear to be at fault, that City Manager Tom Bonfield can authorize a $15,000 payment, which has been issued.

Any payment over that amount requires council approval.

At a work session last month, Cole-McFadden advocated for covering all The Institute’s expenses. Other council members pointed out another situation where elected leaders decided to give less. Cole-McFadden said she wanted to support one of the only African American businesses in the area known as Black Wall Street.

The council granted the Eno River Association a $25,000 grant after it was forced from its office on Guess Road in 2014 by a sewage backup that caused more than $100,000 worth of damage.

Andrea Harris, co-founder and senior fellow at The Institute, outlined broken promises of annual investments by the city in historic Black Wall Street and African American companies. Over the years, The Institute, she said, also spent $80,000 to clean up after oil from an abandoned oil well leaked into the building’s basement and raised $500,000 to replace bathrooms after city work on water meters caused damage.

“We had 8,000 gallons of sewage because of your blockage,” Harris said. “We have now invested probably more than $2 million in our historic landmark on Parrish Street. And I hope you would afford us the same courtesy afforded to others.”

On Monday Cole-McFadden made a motion to approve a grant for the $37,000 request. Mayor Bill Bell made a motion to pay up to $37,000 minus an insurance payment if the organization wants to make a claim. Then Steve Schewel made a motion to pay up to $37,000 minus the amount The Institute gets from insurance, with the expectation that the nonprofit file the claim.

Cole-McFadden said she would support the motion if The Institute agreed.

Ali said they were trying to keep their costs down, and agency officials were concerned that it may end up paying more in premiums if an insurance claim was filed.

The council 5-2 voted to make Schewel’s motion the main motion, with Cole-McFadden and Bell dissenting. The council then voted 6-1 on the motion, with Cole-McFadden dissenting.

Schewel and Don Moffitt, who expressed concern about paying the Eno River Association’s and The Institute’s different amounts in the work session last month, said before the Monday vote that they would support the measure with the expectation that the city extend equal treatment to other organizations or individuals facing similar situations in the future.

Bonfield indicated city staff planned to revisit the city ordinance related to payments in similar situations in the future.

Virginia Bridges: 919-829-8924, @virginiabridges