NC judge gets more than just paychecks from the state. He collects rent, too.
The state Office of Administrative Hearings has been paying rent to one of its judges for its Triad-area office since losing space in a Guilford County courthouse a year ago.
The office conducts hearings on proposed state rules, state personnel disputes and other administrative matters, and has four satellite offices across the state. All four had been in county buildings until last year, when Guilford County officials told OAH that commitments to other government agencies meant the agency could no longer rent space at the High Point courthouse.
Guilford County gave the office notice on May 15, 2023, and said Administrative Law Judge Jonathan Dills and his law clerk had to be out by Aug. 1. Records show OAH Chief Administrative Judge Donald van der Vaart told Dills that he could relocate to the building that formerly housed Dills’ legal practice in downtown Winston-Salem. The annual lease began that day.
“With such short notice, the Chief asked me to house our offices in my former firm offices on a trial basis,” Dills wrote in an email May 17, 2023, to an OAH staffer. “We need to schedule moving furniture and equipment as soon as possible.”
Dills is charging the state the same rate as Guilford, $416.50 a month, for two offices with a combined 390 square feet, plus access to a conference room and a break room, the records show. That averages out to $12.82 per square foot, which was about $5 less than the $17.88 average square foot asking rate for office space in Winston-Salem’s central business district at that time, according to the commercial real estate investment and services firm CBRE.
There are no state laws or regulations prohibiting agencies from leasing property from their employees, said Julia Hegele, a spokeswoman for the N.C. Department of Administration, which includes the State Property Office. But officials there are not aware of any instances where that’s happened, she added.
The state allows individual agencies to negotiate leases that are $5,000 or less a year, or for no longer than three years. The annual lease struck with Dills is just under that, at $4,998. But the state requires agencies to notify the State Property Office to make sure there is no state-owned or leased property available.
Agencies are also supposed to send a copy of the lease to the State Property Office. Hegele said officials there did not have a copy.
“We do not have a copy of the lease and we were not aware of this agreement,” she said.
Delayed answers
The News & Observer first inquired about the office move in March. Chief Hearings Clerk Maria Erwin said then she did not know the new office location and directed questions to John Evans, the senior administrative law judge at OAH. Evans declined to answer questions then, and did not provide requested records about the lease arrangement until Tuesday. By then, The Assembly, a second media outlet, had also requested them.
The records Evans released of the leasing efforts do not show OAH interacting with the Department of Administration.
Evans said in an email response to follow-up questions from The N&O that OAH opted to rent the space from Dills after finding it comparable to the rents the office paid to Guilford and the other counties. He said the lease is being renewed.
Van der Vaart, a former secretary for the N.C. Department of Environmental Quality for Republican Gov. Pat McCrory, could not be reached. He was appointed chief judge by N.C. Supreme Court Chief Justice Paul Newby in July 2021. Evans was van der Vaart’s chief deputy at DEQ.
Dills was hired as an administrative judge in September 2021. He referred The N&O’s questions to Evans. Dills is paid a $126,468 annual salary.
The N&O visited Dills’ office building in March. Stenciling on a front door advertised the entrance to what had been Dills’ private practice, but did not mention that it is his state office. A Mexican restaurant takes up much of the first-floor space. Lease records indicate the state offices are on the top floor.
The rent is less than the $790 monthly rent Mecklenburg County charges for space in its courthouse, but more than the $350 monthly rate Onslow County charges. Haywood County does not charge the state for office space, OAH records show.
None of the street locations for the judges’ offices could be found on OAH’s website.
Though Newby appoints OAH’s leader, the office is not under the state court system, which is run by the N.C. Administrative Office of the Courts. No such arrangement is used for state courts, a spokesman said.
“NCAOC has not and does not rent office space from its judges,” spokesman Graham Wilson said in an email response.
Administrative law judges also are not required to file annual statements of economic interest with the State Ethics Commission, said Executive Director Kathleen Edwards. The commission identifies real or potential conflicts of interest after reviewing officials’ assets and business interests with state government.