What @sog_ced is reading: March 2019

2 Responses to “What @sog_ced is reading: March 2019”

1. 

   Tyler Mulligan

   April 11, 2019

   Readers may find the following information helpful in understanding the News & Observer story described above.
   • The story focuses on a university internal audit report about a former employee and that employee’s relationship with a contracted vendor that provided staff support for DFI projects. The audit report was completed in May 2017 and recommended for DFI to discontinue the contract with the vendor. Accordingly, one of my first tasks upon assuming the role of director in June 2017 was to build internal staff capacity to perform DFI’s work rather than relying on the outside vendor connected to the former employee. DFI hired staff who had previously worked for the vendor and placed them in space no longer needed by the vendor. The auditor returned in 2018 for routine follow-up and determined that no further audit work was required.
   • According to the story, the reporter sought records after learning that DFI’s former director launched two private real estate projects that were previously the subject of DFI assistance. The story describes one such project located in Fayetteville. Two current university employees are involved in the Fayetteville project, and both university employees had appropriately disclosed their involvement to the university in public documents that were made available to the reporter.
   • DFI has conducted over 130 projects since 2011. In addition to the two projects mentioned in the story, there is one other occasion in which a DFI employee has launched a private development project that was the subject of a concluded DFI project. DFI conducts conflict of interest reviews in those situations and informs relevant local governments. Conflict of interest reviews cannot be discussed by the university due to state human resources law.
   • DFI encourages its part-time employees to engage in private development outside of DFI so long as the activities are disclosed for conflict of interest review. The outside experience with private projects gives those employees current and relevant knowledge about development practices that can be shared with students and local governments.
   • The story mentions that the former director, after leaving DFI, manages a real estate investment company called Rivermont Capital. DFI cannot control and does not track the activities of former employees. However, DFI becomes aware when a former employee’s activities intersect with DFI’s active projects. This has happened on four occasions with Rivermont Capital:
   – Three of them involve a national real estate development firm called Armada Hoffler Properties. Armada Hoffler applied to be the private development partner for local governments in three communities being assisted by DFI: Fuquay-Varina, Greenville, and Morrisville. In the applications by Armada Hoffler, Rivermont was listed as a member of the Armada Hoffler team. Only one of those communities, Fuquay-Varina, is proceeding with Armada Hoffler; negotiations between the town and the firm are ongoing.
   – In one DFI project in Kannapolis, a third party developer was selected by the City to develop a private real estate project. After being selected by the City, the third party developer sought financing for its project from several sources and later obtained financing from Rivermont.
   • DFI is a nonprofit, charitable initiative that has attracted over one hundred million dollars of private investment into challenging projects across North Carolina. Its record of success stems from its commitment to local governments—DFI enters into years-long engagements with communities. DFI staff also teach North Carolina’s next generation of leaders through a graduate course in community revitalization, which provides analysis to North Carolina communities at no charge.

2. 

   Jordan Jones

   June 11, 2019

   The article above describes a project in Fayetteville that received DFI assistance. For readers who would like to learn more about DFI’s analysis in that project and the role of historic tax credits in making the project feasible, please see my May 2019 blog post here called The Role of the NC Historic Rehabilitation Tax Credit in a Development Project.