Potential conflicts in sustainability spending at City of Charlotte

Published: Jul. 13, 2021 at 5:37 PM EDT
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CHARLOTTE, N.C. (WBTV) - A City of Charlotte project that’s gone over budget and past deadline remains unopened.

The Innovation Barn was a feather in the cap for some of the city’s environmental goals but now WBTV has questions about whether the company behind the Barn will get more taxpayer dollars and if that presents a conflict of interests for one key city official.

In September 2019, WBTV reported on a city memo showing the project was over budget by nearly double the original estimate of roughly $3.6 million. City council originally only allocated $2.5 million for the project.

The scope of the project was scaled down so that cost overruns were limited to $1.4 million. The city has not produced records requested by WBTV that would show how the money has been disbursed.

Opening dates for the Innovation Barn have been pushed back time and time again and it remains closed.

The project to retrofit the old city building was led by Envision Charlotte and construction was completed by JE Dunn.

Charlotte City Manager Marcus Jones sits on the board of Envision Charlotte. Former City Councilman James “Smuggie” Mitchell was an employee at JE Dunn.

“I think it’s not illegal, but it absolutely presents a conflict of interest that needs to be discussed,” Republican strategist and attorney Larry Shaheen told WBTV.

Shaheen said the conflicts need to be out in the open especially given recent spending decisions made by the Charlotte City Council.

“With this specific program you’ve got cost overruns, budget problems, all kinds of issues that looked like they were swept under the rug simply because someone from the city management was on the board,” Shaheen said.

In an email, a city spokesperson wrote that the city has a procurement process to ensure no legal conflicts and “Mr. Jones’ position as a board member of Envision Charlotte and Mr. Mitchell’s position as a City Council Member and employee of JE Dunn had no bearing on the outcome of the competitive procurement process.”

City council members are required to fill out disclosure forms called a Statement of Economic Interest. WBTV previously reported that Mitchell failed to file those forms for consecutive years before finally catching up after our reporting.

The City Manager and other top staffers are also required to file a statement however those are not posted online and easily accessible to the public.

“We have to be more careful with our city staffers because if corruption is going to take hold in this city, it will not be where the elected officials are because they have very few decision-making abilities,” Shaheen said.

“It’s going to be at the management level because they have lots of decisions and millions of dollars at their direction.”

On top of the Innovation Barn, Envision Charlotte was the brains behind the city’s Strategic Energy Action Plan or SEAP. The document is a framework for a low carbon future for the city.

This year, Jones recommended unprecedented levels of funding for the SEAP in the city’s budget.

That includes $4 million for retrofitting city-owned buildings and possibly installing solar panels on them and another $750,000 to improve energy efficiency in buildings.

Other projects that help achieve SEAP goals, such as a program to help recover resources from wastewater treatment plants, take that number north of $20 million.

Given the history of Envision Charlotte and city-financed projects, WBTV had questions about whether the non-profit could financially benefit from that new funding.

“You have to be very careful to make sure that they’re not the ones who are going to improperly benefit from these types of plans,” Shaheen said.

WBTV reached out to the city communications team for an interview with City Manager Marcus Jones but Jones was not made available.

In a statement to our questions a city spokesperson wrote that funding for this year does not include anything for the Innovation Barn “and that future projects through SEAP are not compatible with Envision Charlotte, so “we do not foresee that Envision Charlotte would be interested in competing for the work.”

The city also said “none of the SEAP dollars have gone to the Innovation Barn or Envision Charlotte” although the Innovation Barn is technically under a different project name called the Circular Economy. Both the Circular Economy and SEAP work to accomplish the same goal, according to city documents.

The relationship between the city, Envision Charlotte and the Innovation Barn is unique.

So far, the city has not produced records showing how much money, if any, Envision Charlotte has received in overseeing the Innovation Barn project.

The building is owned by the City of Charlotte but according to city records Envision Charlotte “will be doing the programming and everything else.”

Additionally, according to the city’s procurement page Envision Charlotte received the bids for the architectural design and construction manager at risk, even if the city ultimately made the decision.

Regarding the cost overruns at the Innovation Barn, a city spokesperson wrote that “the cost per square foot of the project came out to $280/per square foot, which is significantly cheaper than the industry standard of $315-$350 per square foot.”

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