Editorial: A (rural) center of controversy

  • Posted: Wednesday, June 19, 2013 12:20 a.m.

The N.C. Rural Economic Development Center surfaces in Rowan County news when the private nonprofit organization OKs grants for water and sewer projects. In recent years, the projects have included lines to Sunshine Manufacturing in Rockwell, Innospec in Spencer and RDH Tire Retread on U.S. 70.

But a two-part series in The News & Observer has focussed on questionable projects elsewhere in the state in which millions in taxpayer funds helped build fast-food restaurants, golf resorts, discount stores and big-box retail stores.

Will the real Rural Center please stand up?

It will take some time for a complete and accurate picture of the organization’s work to develop. Through examining records and interviewing people, The N&O found that Rural Center grants often go where legislators request them, and the lawmakers then receive campaign contributions from the business people involved. Case in point: State Sen. Tommy Tucker, R-Waxhaw, got the Rural Center to grant $300,000 to help develop a 14-screen movie theater complex, after which some of the project’s developers contributed $6,550 to his campaign.

The Rural Center’s economic incentive grants are supposed to max out at $10,000 per job created. Its board agreed to waive that cap for the theater project, but the “per job created” formula doesn’t seem to mean much, anyway. The N&O investigation found several projects’ ultimate impact on the local job scene was not as great promised.

In its defense, The Rural Center says it does much more than give incentive grants like the ones The N&O examined. Nearly two-thirds of the $680 million in grants awarded since 1987 “has helped communities solve serious health and environmental issues through water and sewer improvements,” according to the organization’s website.

And while restaurant and retail projects may not be what lawmakers envision when they talk about economic development, many of these projects went into economically depressed communities that were all too happy to get a Walmart or a BoJangles and the jobs that come with them.

Republicans point to The Rural Center and President Billy Ray Hall as remnants of the old Democratic Party machine, a good ole boys’ network of mutual back-scratching. If so, Republican Tucker’s grant suggests the network has gone bipartisan. The N&O’s paper trail also leads to Variety Wholesale, parent company of Rose’s — owned by the family of Republican Art Pope, Gov. Pat McCrory’s budget director.

The budgeting process will reveal what today’s Republican powerbrokers really think of The Rural Center. Pope has suggested cutting its budget 60 percent. The state Senate budget pulls funding from the center and redirects the money to other agencies. The state House budget, however, calls for increasing the center’s budget to $36 million over two years.

Something does not add up.

Most likely, The Rural Center’s work is open to interpretation, neither perfect nor corrupt. Before they annihilate the organization, lawmakers should take a closer look over a longer period of time. So far they have only a glimpse of its 25-year record.

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