April 28, 2007

Brewing Scandal

NCSpin, a weekly radio show on NC politics sends out an e-mail newsletter called Spincycle detailing the upcoming show and including interesting NC news and political comment. The most recent issue pointed to a story in the Carolina Journal about the status and financial details of the "Randy Parton Theater". The details are quite remarkable (and possibly troublesome). There is no online version of the Spincyle letter so I will quote from it at some length:

Here’s the skinny:



1. Roanoke Rapids borrowed $21.5 million for the project. The theatre cost $12.5 million. The remaining funds were to be used used to give to Randy Parton, for costs of financing, start-up costs, and debt service until funds were sufficient to pay the debt. When the debt is fully paid, Randy Parton can buy the theatre for $1.



2. The 35,000 square foot theatre with 1,500 seats is completed and was turned over to Parton in March, but so far no productions have been staged or even planned.



3. Randy Parton immediately received $500,000, but he also has a contract for $1.5 million per year in “artist fees” as long as the theatre is operational. In addition he is provided, at no cost to him, a home “acceptable” to him to live in (estimated value $2,000 per month) and a car.



4. Rick Watson, who formerly misguided the Northeast Partnership and was subsequently fired after a scathing report from the State Auditor, has his fingerprints all over this project. Cathy Scott and her husband, former contract employees for Watson at the Partnership, were hired for the Parton project. Cathy is the theatre manager, while Mike is the business manager. Neither have any experience in operating a theatre or entertainment complex and we are told there is no business plan for the project, no ticket prices have been set, and no acts booked, causing many to wonder if any performances will be staged anytime soon.



Is it all hype? Does Parton’s company have any funding other than public money?



We are told that Parton and the Scotts are putting out requests for vendors in the new theatre. Part of the requirements to win the vending contract are that the vending company must provide cash for operating the theatre. At least one marketing firm was interviewed and, we are told, the same stipulation was part of the discussion.


The money put up by Roanoke Rapids was borrowed based on a principal called "tax increment financing" This is the idea that the money borrowed will be paid back by taxes collected on the increase in property value created by the spending of public money. If this report is correct, there may not be much increase in property tax and there may not be much money left to pay the note.

Spincycle cites this article in the Carolina Journal as the source of much of the information Parton to Get $1.5 Million Per Year. You can read more on this issue from the CJ at this page. There is an AP story about the issue with some predictable comments from some of the officials involved here

A couple of notes. The Carolina Journal is the mouthpiece of the John Locke Foundation, a conservative think tank that opposed allowing tax increment financing and has been a harsh critic of virtually all government tax breaks for business. This story serves their political interests. That however does not make it untrue. I have found them generally to be accurate though not always completely balanced in their reporting.

Note 2. This could have happened a lot closer to the OBX. Randy Parton was in deep discussions with Currituck County about a similar project. The talks didn't firm up and I never heard exactly why. Parton ended up in Roanoke Rapids and may have done Currituck a huge favor.

Keep an eye out for this story. If I see more I will try and pass it on.

2 Comments:

At 7:41 PM, Blogger Overwash said...

As ardent subscribers to the Carolina Journal and NC Spin, we say "cool beans", Bob.
Thanks for bringing that story to your readers.

 
At 9:16 AM, Blogger Paula the Surf Mom said...

Bob I saw the title "Brewing Scandal" on my feed to you site and I thought that Anheuser Bush was cutting us off... I'm so glad that wasn't what was happening.

Hey you are one of the Surf Mom report sponsors today...hope it helps the readership

 

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