The Greensboro City Council held a work session and a monthly business meeting on Tuesday, August 21, and a new Minority and Women Business Enterprise (MWBE) program was the only matter discussed at the work session, and it was the main topic at the regular monthly meeting.
At the business meeting, the City Council also agreed to sell $43 million in bonds to finance the construction of the February One Place parking deck and buy land and design a parking deck on Eugene Street.
The council also agreed to sell the air rights for a 17 foot by 20 foot parcel of land to the N Club LLC, which owns the Cone Denim Entertainment Center building, finally settling a dispute over an easement across the land where the February One Place parking deck is being constructed that has been an issue for over a year.
The issue with the N Club was one of the very few of the 42 items on the agenda that the City Council discussed. It was the final step in reaching an agreement with the owner of the N Club and Cone Denim, Rocky Scarfone, over an easement that the City Council voted to condemn in December 2017 after the city’s offer to buy the easement for $55,000 was refused. Scarfone then sued the city over the condemnation and asked the court for a temporary restraining order (TRO) to prevent the construction of the deck until after the lawsuit was resolved.
The court never ruled on the request for the TRO, but because the city had agreed not to start construction until after the TRO issue was resolved, there was in effect a TRO even though no ruling had been made.
In April, the city and Scarfone reached an agreement to settle the lawsuit. The city paid Scarfone $735,000, granted him an easement from the back of Cone Denim to Market Street along with parking rights, gave him a 435-square-foot piece of property behind Cone Denim and granted him the right to build a green room on that property. It was thought that the matter was settled.
However, Scarfone discovered that the city would not allow him to build the green room with the stairs outside. Placing the stairs inside the space made it unusable as a green room.
But Scarfone still had a bargaining chip left. Although the agreement with the city had been signed and the check from the city cashed, Scarfone had not signed the additional documentation for the easement and land.
Those involved said financing for the construction could be held up if the issues about the easement and land were not resolved.
The city and Scarfone have been negotiating for months to resolve the issue and the city finally agreed to sell Scarfone the air rights to the land over the alley. Scarfone cannot build in the first 15 feet of height over the alley, but the additional 17 foot by 20 foot space over 15 feet extending over the alley was sold to Scarfone for $840.
Mayor Nancy Vaughan has said several times that she considered the agreement with Scarfone completed and that the city had kept its part of the agreement.
Tuesday night Vaughan said, “I thought this was going to be a stand alone resolution. I feel we came to an agreement. I think this should be separate and apart. If it is part of the original agreement, I can’t vote for it at this point.”
City Attorney Tom Carruthers said that the resolution was not connected to the original agreement with Scarfone and blamed the confusion on the resolution being poorly drafted.
Councilmember Justin Outling, who is a partner at the law firm Brooks Pierce, also had concerns about the resolution. Because of work done by his law firm, he has been recused from all matters concerning the original agreement.
Outling said that if this were connected to the settlement agreement then he would have to be recused, and the council voted to recuse him.
However, Carruthers said, “They are not linked. They are entirely separate.”
Outling, who was clearly frustrated, said that he would remain recused because the language of the resolution they were voting on linked the original settlement with the sale of the property. He said that despite what Carruthers was saying he was going to base his decision on the language of the resolution, not on statements by the city attorney.
The resolution states, “Whereas, pursuant to the Settlement and Release of All Claims dated April 24, 2018 (the “Settlement Agreement”) by and between N Club, LLC, GGEG, LLC [Greater Greensboro Entertainment Group] and the City, N Club, LLC agreed to exchange its interest in an access easement over City property for title to real property comprising 17 by 20 feet that abutted its property at 117-119 S. Elm St.”
The resolution also states, “Whereas, the City desires for this sale to be contingent upon receipt and recordation of all outstanding documents from N Club, LLC and GGEG, LLC pursuant to the Settlement Agreement.”
Finally, in the be it resolved portion of the resolution, it states in part, “…and the Mayor is authorized to execute a deed to effectuate the said transfer of property following receipt and recordation of all outstanding documents from N Club, LLC and GGEG, LLC pursuant to the Settlement Agreement.”
Councilmember Tammi Thurm also questioned exactly what the resolution would do. She said that her understanding was that if the city didn’t approve selling the air rights then there would be problems in terms of the deed and other documents to complete the settlement agreement.
Carruthers said, “The settlement has occurred.” He said that the resolution was “less than artfully drawn,” but maintained that this was a simple land sale and was not related to the previous settlement agreement, despite what the resolution repeatedly stated.
Thurm asked if the documents for the settlement agreement had been signed and Carruthers said no but that the settlement agreement had been signed.
Vaughan offered a friendly amendment that the documents pertaining to the settlement agreement had to be signed within seven days and that was accepted. She noted that adding that to the resolution once again linked the sale of air rights to the settlement agreement.
The motion to approve the resolution passed on a 7-to-1 vote with Outling recused and Vaughan voting no.
In April, the City Council received a new disparity study from Griffin & Strong, a law firm based in Atlanta, and has been developing a plan on how to implement a new MWBE program since then.
At the work session that began at 4:30 p.m., Assistant City Manager Barbara Harris said that the disparity study committee had been meeting and held meetings with various stakeholders. She said that they had hoped to have a revised MWBE ordinance to present to the City Council, but said, “We’re not there yet.”
Carruthers said that three or four weeks ago the city had sent a rough draft of a proposed new MWBE ordinance to Griffin & Strong and had received its reply that morning. He said that they had met with Griffin & Strong for two-and-a-half hours on Tuesday to discuss the legal aspects of the new ordinance and made good progress.
Five members of the Griffin & Strong team that worked on the disparity study attended the work session and there didn’t appear to be any disagreement on implementing the recommendations made by Griffin & Strong. There was discussion on the best way to implement the recommendations, but it appeared that city staff and Griffin & Strong were on the same page about what needed to be done. The questions were about the best way to do it.
For example, members of the Griffin & Strong team said the city could expand the MWBE program to include 24 counties instead of the 10 counties that are currently considered. The Griffin & Strong disparity study was based on a 24 county area, but they noted that they didn’t recommend expanding the area covered by the MWBE program, but that it was simply an option that could be considered.
At the public hearing during the regular meeting that began at 5:30, a number of speakers voiced concerns about the way the MWBE process was being handled.
Former City Councilmember and former state Rep. Earl Jones said the city needed to hire Griffin & Strong to implement the program, allocate $1.5 million for the MWBE department and have the MWBE department report directly to the mayor and the City Council.
Councilmember Goldie Wells noted that Griffin & Strong was already under contract with the city and would be for another year. Wells also said that there was too much emphasis on the past and they needed to be looking at the future. She noted that it was a new council with eight women and a different attitude. She said, “Please give us the chance to do something.”
Thurm said that she was not opposed to allocating whatever funds were needed to the MWBE department, but that there had to be a reason for the allocation.
Vaughan said that during the budget process the City Council had agreed to allocate more money to the MWBE department if it was needed, and the council intended to do so when it had a plan in place.
Vaughan also said that the council didn’t have the authority to put a department directly under its control.
Councilmember Nancy Hoffmann said, “We are never going to approve a department in our city reporting directly to the City Council. I think it is absolutely absurd.”
The City Council passed the resolution in support of the disparity study and the recommendations by a 9-to-0 vote.
The ordinance to put those recommendations in practice is expected to be before the council in October, which is in accordance with the original timeline.
The City Council also unanimously approved a resolution approving the sale by the Redevelopment Commission of Greensboro of three acres at the corner of Gate City Boulevard and South Elm Street to Greenline Holdings LLC for a mixed-use development. A portion of the 60 townhomes and 39 apartments will be sold or rented as affordable housing.
The development will also include retail and commercial space.
The City Council also approved the plan and appointed the members for the new Greensboro Criminal Justice Advisory Board and Police Community Review Board.
The City Council agreed to sell $144.6 million in general obligation bonds without explanation or discussion.
