Cindy and Peter Emens: A bad deal for taxpayers

July 18, 2014 

A bad deal for taxpayers

Members of CaryWatch carefully monitored The Mayton Inn developments since the project was announced, and we questioned the following:

• The absence of public solicitations and bids for “opportunity site” proposals.

• The “sole source” contract with a superabundance of public subsidies to Durham bed-and-breakfast operators who are not uniquely qualified as hoteliers or experienced developers.

• $6 million in taxpayer money and services for a $12 million privately owned hotel and only 40 low-paying jobs.

• Transfer of land for $951,000 that cost Cary taxpayers $1.8 million (appraised at $1.7 million) with no down payment and deferred interest and principal for 10 years on an uncollateralized promissory note.

• Commitment by the town to provide $1 million for infrastructure, pre-development and streetscaping.

• $1.3 million in waived developer fees.

• $1.4 million unsecuritized personal loan to the developers using money the town borrowed from HUD’s Section 108 Program.

• An intercreditor agreement subordinating Cary taxpayers’ rights as creditors to third and fourth place on a project that lacks sufficient brick and mortar equity to fully secure its indebtedness.

• Failure by the town council to provide the same indemnifications that the private lenders required to protect their stockholders from risk and loss.

• Perfunctory approvals by the town council on a “done deal” cut by staff member Ed Gawf.

CaryWatch consistently advocates for transparent governance and fiscal responsibility. Obviously, town officials believe Cary taxpayers can afford a $6 million gift to the hotel developers, or this agreement would have been structured much differently.

Cindy and Peter Emens

Cary

Cary News is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service