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Obama's informal adviser in Raleigh

Submitted by ryanteaguebeckwith on March 27, 2008 - 3:30pm.

Ken Eudy is one of Barack Obama's key supporters in North Carolina.

According to a 2005 profile by Rob Christensen, the Raleigh public affairs consultant is the "full-service, behind-the-scenes political Mr. Fixit" in state politics.

A former political reporter for The Charlotte Observer, Eudy first worked as a lobbyist for the N.C. Press Association, gradually shifting to more general lobbying work.

In 1994, he and public relations consultant Steve Meehan started Capital Strategies, a strategic communications firm in Raleigh. They renamed the firm Capstrat in 2004.

The company has helped promote state bond issues, a Raleigh convention center, a constitutional amendment that legalized tax-increment financing, a campaign to reduce teen smoking, among other things.

In recent months, he's given informal advice to the Obama campaign in North Carolina.

The full profile after the jump.

What is tax increment financing?

Submitted by bniolet on January 16, 2008 - 12:02pm.

Answer:

A form of financing in which a municipality borrows money for a project with the expectation that it will pay back the debt using increased tax revenue generated by the new project.

The often-stated goal of TIFs, as they are sometimes called, is to jump-start development in a blighted area. In theory, TIFs are a mutually beneficial arrangement between a private developer and a municipality. The developer gets the municipality to pay for public improvements to a site. The municipality benefits, because sucessful development means more property or sales tax revenue.

In a simplified example, a private developer wants to build a shopping center in a depressed area. The developer tells town officials that he can afford to build his project if the city is willing to build sidewalks and extend water and sewer connections to the property. The developer proposes a TIF.

In this arrangement, the town issues bonds—or simply put—borrows money, to build the sidewalks and sewer lines. Before the first shovel hits the ground, the town determines how much property tax revenue the parcel generates—a number based on the assessed value of the property. That amount of tax revenue is frozen—it is all the revenue town will collect from the property for some time.

The developer builds the shopping center. Customers shop, dine and visit and the value of the land naturally increases. Because the land is now worth more money, the assessed value increases, which means its owner must pay higher property taxes.

But all the town gets is the amount of tax revenue it collected before the project started. The additional money, or the "increment" will be used to repay the debt the city took on to build sidewalks and sewer lines. In time, the debt is repaid and the town can start collecting the full amount of property tax on its new, bustling shopping center.

TIFs have had a controversial start in North Carolina. In 2004, voters approved a constitutional amendment that allowed the deals. They were controversial and divisive even before they were allowed.

In 2007, developer John Kane proposed using one to build retail and office space at the bustling North Hills in Raleigh. The proposal was denied after it met opposition with members of the Raleigh City Council.

Then there is Roanoke Rapids. The city used a TIF to build a theater for Randy Parton, brother of country superstar Dolly Parton. The theater was supposed to be the centerpiece of an entertainment and tourist complex, but in its first few months, the project was riddled with problems.

The project was made an issue in the race for governor, since Democratic candidate Richard Moore, who was head of a commission that must authorize TIFs, approved Roanoke Rapids' plans.

The famous feasibility study

Submitted by bniolet on January 11, 2008 - 5:25pm.

Lt. Gov. Beverly Perdue has been accusing state Treasurer Richard Moore of withholding a feasibility study that questioned the financial chances of Roanoke Rapids' plans to open a theater featuring Randy Parton.

Dome wanted to share its copy of the study, which was received from the treasurer's office.

Perdue continues to question why members of the Local Government Commission, which authorizes public borrowing, were not briefed on the contents of the study before they voted on Roanoke Rapids' plans.

The study can be seen here.

Update: A Perdue spokesman said that Winston-Salem Mayor Allen Joines, who is a commission member and Perdue supporter, still has not received his copy of the feasibility study.

Sara Lang, Moore's communications director, said that Joines can come view whatever documents he wants.

"There's two boxes of stuff. He's welcome to come look at it," Lang said.

Previously: Perdue's attacks on Moore's role are overstated.

Merritt wants Libertarian to review policies

Submitted by bniolet on January 10, 2008 - 4:52pm.

State Auditor Les Merritt has nominated the head of the state Libertarian Party to help the Local Government Commission decide its role in approving special financing deals like the one used for a theater in Roanoke Rapids.

Her qualifications? She's not a Democrat or Republican and she's against such financing deals, Merritt said in a news release announcing that he picked Barbara Howe to serve on the committee.

"Barbara Howe will provide the independent voice that this task force needs," Merritt said.

This week, the commission, which approves all public debt in the state, discussed creating a task force to examine its role in approving so-called tax increment financing arrangements. In such deals, the money generated by a sucessful project is used to pay back the money borrowed to get the project started.

That's how Roanoke Rapids proposed to pay back $21.5 million it borrowed to build a theater and entertainment district that would feature Randy Parton. The city has since parted ways with Parton and has struggle to sell tickets.

More after the jump.

Orr: Hate to say I told you so

Submitted by ryanteaguebeckwith on December 12, 2007 - 9:10am.

Bob Orr wants you to know he opposed the Randy Parton deal from the start.

On his blog, the Republican gubernatorial candidate points out that he opposed the use of tax-increment financing to pay for a theater in Roanoke Rapids.

As head of the N.C. Institute for Constitutional Law, Orr filed a lawsuit in U.S. District Court to the 2004 Amendment One ballot initiative that legalized the bonds.

He writes that the voting public was "literally snookered" into giving up its constitutional right to vote on that type of bonds.

"It may be that the voters would have approved the bonds but I bet a lot of the shenanigans that went on would have been avoided if a vote on the bonds had taken place," he writes.