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State treasurer calls for probe into Rocky Mount hotel project

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The city of Rocky Mount's administrative office building is shown.
The city of Rocky Mount's administrative office building is shown.
Contributed photo

ROCKY MOUNT — A high-ranking state official is calling for a full investigation into a proposed multimillion-dollar public-private downtown hotel project.

State Treasurer Dale Folwell issued a letter to fellow state leaders including Gov. Roy Cooper on Sept. 9 recommending a probe of the controversial Rocky Mount development. Folwell issued a public statement later that day.

Folwell said he’s disturbed by the federal indictment of Rocky Mount’s handpicked developer, that a state financial audit citing questionable spending and irregularities at city hall gives him pause and the combination casts a troubling shadow on a past project — the Rocky Mount Event Center.

“In light of the serious nature of the indictment, a prompt and thorough investigation is warranted before any taxpayer money is approved to pay for this project,” Folwell said. “As keeper of the public purse and chair of the Local Government Commission, which approves the issuance of public debt, I have an obligation to inquire about potential waste, fraud or abuse.” 

Folwell said while there must be a presumption of innocence, taxpayer dollars need to be protected from possible graft.

Mayor Sandy Roberson, who took office late last year, is also calling for an investigation.

“I would be highly disappointed if the elected officials in that community or this state would not be in favor of looking more deeply into the finances of the city of Rocky Mount and this project specifically,” Folwell said. 

David Hunt, the Tennessee developer chosen to lead the Rocky Mount development project, is one of four people indicted by a federal grand jury in Mississippi in an alleged illegal bid-rigging scheme. The charges are not connected to the Rocky Mount project, which includes a downtown hotel, parking garage, retail spaces and housing.

The Rocky Mount City Council passed an August 2019 resolution authorizing a financing application to the LGC. Rocky Mount City Manager Rochelle Small-Toney told local news media that she placed a hold on the project and announced the rescission of the application when Hunt’s legal troubles were made public.

“The Rocky Mount City Council, not the city manager, needs to pass a resolution withdrawing the application,” Folwell said. “That’s the best way to properly halt the LGC’s process.”

The Enterprise asked city officials whether Rocky Mount would heed Folwell’s advice. An answer wasn’t available in time for this story. 

Folwell said the criminal allegations are distressing for the commission, which is reviewing application materials for nearly $18.4 million in financing for the parking garage portion of the project. 

“In light of this troubling situation, it would be natural for the LGC to question whether the city followed appropriate procedures in previous financing decisions, such as bond financing of up to $44.5 million that the LGC approved at the city’s request in 2016 to build the downtown Rocky Mount Event Center,” Folwell said. 

A different developer completed work on the event center project. 

The Hunt indictment follows a scathing report released in May by State Auditor Beth Wood, a member of the LGC. Wood’s report revealed city officials gave preferential treatment to Councilman Andre Knight to prevent utility disconnection and avoid nearly $47,000 in unpaid bills. The report also found the city suffered $60,000 in uncollected loans and improperly awarded funds and Small-Toney incurred unallowable travel expenses.

The LGC provides resources, guidance and oversight to more than 1,300 units of local government on annual budgets, internal controls, debt management and pension reporting. The State and Local Government Finance Division in the Department of State Treasurer provides staff, according to information from the commission.