INSIDE THIS ISSUE: DEPARTMENTS Bills address North Carolina 2 C A R O L I N A Education 9 issue of Higher Education 13 athletics for Local Government 16 Books & the Arts 20 homeschool- Opinion 24 Parting Shot 28 ers /9 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION JOURNALFROM THE JOHN LOCKE FOUNDATION May 2009 Vol. 18. No. 5 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org Easley Land Deal Gaining Interest Public Outrage Media and feds Accompanying also interested in Revaluations BY DAVID N. BASS Easley automobiles Associate Editor BY DON CARRINGTON RALEIGH Executive Editor ome foreclosure and unemploy- RALEIGH ment rates are on the rise in ederal authorities and state me- North Carolina, but a new batch dia have turned their attention Hof property revaluations, and the tax to a Carteret County real estate hikes that often accompany them, could Fdevelopment in which former Gov. make life even more difficult for some Mike Easley bought a lot in 2005. residents. Carolina Journal first reported in By law, counties must revaluate 2006 on Easley’s purchase of a lot in property at least every eight years, al- the Cannonsgate development. An though commissioners can opt to re- analysis of other transactions showed valuate earlier. The new values must be Easley got what The Charlotte Observ- approved by Jan. 1 of the year they take er called a “sweetheart deal.” A recent photo of the Cannonsgate development shows roads and other amenities effect. That requirement is causing angst The federal interest in the Can- have been added since 2006. Easley’s lot borders the Intracoastal Waterway and in North Carolina counties where public nonsgate development came after The the entry to the marina. (CJ photo by Don Carrington) outrage has prompted commissioners to News & Observer of Raleigh reported rescind recent appraisals. owned by auto dealer and NASCAR choice waterfront lot at a lesser price that investigators are looking into the The problem is tied to the slumping team owner Rick Hendrick of Char- than what similar lots sold for in the free cars that auto dealers have pro- economy. Property values had consistent- lotte. Easley purchased the cars after Cannonsgate development. vided to Easley’s family. ly risen in recent years, but the mortgage the news reports were published. A spokesperson for Cannons- Easley’s son, Michael Jr., was crisis put the real-estate market in a tail- Federal investigators appear to gate developer William G. Allen ac- driving a car owned by Fayetteville spin. So homeowners are angered at the area car dealer Bobby Bleecker. Ea- be looking into the December 2005 knowledged an inquiry from federal sley’s wife, Mary, was driving a car Carteret County real estate trans- action in which Easley obtained a Continued as “Easley,“ Page 2 Continued as “Public,” Page 3 Tea’d Off: Disgust Spreads Over Spending PAID BY DAVID N. BASS RALEIGH, NC U.S. POSTAGE Associate Editor PERMIT NO. 1766 NONPROFIT ORG. RALEIGH s millions of Americans flocked to the post office April 15 to file their last-minute tax returns, hun- dreds of thousands of Americans flocked to state capitals,A public parks, and town halls with a much different goal in mind — to protest government bailouts, stimulus packages, and pork-barrel spending. It was the latest development in a movement that limited-government advocates say reflects renewed outrage at the tax-and-spend mentality in Washington. Ignited in February when CNBC pundit Rick Santelli suggested a Chi- cago “tea party” to decry wasteful government spending, the idea has caught on in hundreds of cities and towns from coast to coast. And its criticism is not limited to one political party, either. Tea Party protesters at the N.C. State Capitol on April 15 made it The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 Continued as “Tea’d Off,“ Page 4 clear where they stand on taxes. (CJ photo by Don Carrington) PAGE 2 MAY 2009 | CAROLINA JOURNAL C A R O L I N A Easley Autos, Land Deal Gaining Interest JOURNAL Continued from Page 1 family residential properties are now selling for approxi- authorities involving a specific lot purchase at the develop- mately 15 percent less than they did at the end of 2005,” ment. Easley appointed Allen and three others involved in he said. Nicholson said he knew little about Cannonsgate. Rick Henderson the project to major state boards. All have been major politi- Several Carteret County realtors who were familiar with the Managing Editor cal contributors to Easley. project did not want to speak on record. Don Carrington Carolina Journal first reported in 2006 that Easley pur- Executive Editor Connections chased a .36-acre waterfront lot in the Cannonsgate devel- David N. Bass, Mitch Kokai opment for $549,880, a price that appeared low when com- Easley bought the lot from Cannonsgate developer R. Michael Lowrey pared to the other lots in the 525-lot development. Records A. North Development Inc. of Matthews. Randoph M. Allen Associate Editors indicate that he paid 10 percent down and financed the is listed as the company president, according to the North remainder through a $494,000 mortgage loan from Branch Carolina Secretary of State office’s corporation records. In Chad Adams, Jana Benscoter Banking & Trust. addition to Cannonsgate, Allen and his brother, William Kristen Blair, Roy Cordato Following that story, The Charlotte Observer published G. Allen, have developed large waterfront communities in Becki Gray, Paige Holland Hamp a similar story that concluded Easley got a favorable deal. North Carolina, South Carolina, Florida, and Texas. David Hartgen, Sam A. Hieb Easley spokeswoman Cari Boyce told the paper that Eas- In June 2005 Easley appointed Randolph Allen to a Lindalyn Kakadelis, George Leef ley did not receive special treatment. ”The governor paid six-year term on the N.C. Wildlife Resources Commission. Karen McMahan, Karen Palasek the listed asking price for the lot. Easley had previously appointed Susan Robinson, Marc Rotterman Mike Rouse, Jim Stegall The price was set and non-nego- William Allen to the same com- George Stephens, Jeff Taylor tiable,” she said at the time. She mission. Michael Walden, Karen Welsh also said he bought the land as During a break at a Decem- Hal Young, John Calvin Young an investment. ber 2006 meeting of the WRC in Contributors One year after Easley’s Raleigh, Randoph Allen briefly purchase, the Carteret County discussed the project with CJ. Clint Atkins, Abby Alger Tax office assigned a value of Even though Allen’s signature Laura Barringer, Katie Bethune $1,198,245 to the lot that borders appears on Easley’s deed, Allen Nick Chandler, David Koon the Intracoastal Waterway and said he had nothing to do with Shelley Gonzales, Jessica Thompson the entrance to a new marina. setting the price for Easley’s lot. Editorial Interns Easley’s lot is the second-most He said the marketing company valuable lot in the development. set the price, but Allen later ac- Published by The development’s roads and knowledged that his brother, The John Locke Foundation other infrastructure are com- William G. Allen, controlled the 200 W. Morgan St., # 200 plete, but only one house is cur- marketing company, Southeast- Raleigh, N.C. 27601 rently under construction in the Promotional sign in front of the Cannonsgate devel- ern Waterfront Properties. Last (919) 828-3876 • Fax: 821-5117 development. opment in 2006. (CJ file photo) year, the lead broker for South- www.JohnLocke.org CJ was unable to talk with eastern, Mace Watts, refused to Easley about Cannonsgate. He recently joined the McGuire discuss the details of Easley’s purchase. Jon Ham Woods law firm and works out of the firm’s Raleigh office. Real estate investor Lanny Wilson of Wilmington, Vice President & Publisher Messages left on his office voicemail were not returned. through his company Cannonsgate Investments LLC, pro- vided $12.5 million in private financing for the Cannonsgate John Hood Setting value project. Easley appointed Wilson to the Real Estate Com- Chairman & President Carteret County Assistant Tax Administrator Ralph mission and to the N.C. Board of Transportation. Bruce Babcock, Herb Berkowitz Foster told CJ that he stands behind the $1,198,245 value Real estate broker D. McQueen Campbell of Raleigh Charlie Carter, Jim Fulghum placed on Easley’s lot. “Our job is to come up with a fair has taken responsibility for introducing Easley to the invest- Chuck Fuller, Bill Graham market value.” ment opportunity. He told CJ that he was a buyer’s agent Robert Luddy, Assad Meymandi He said for mass appraisals such as the periodic coun- for Easley. However, about the time of Easley’s purchase, Baker A. Mitchell Jr., ty revaluations tax administrators use standard practices Campbell developed a contractual employment relation- Carl Mumpower, J. Arthur Pope developed by The International Association of Assessing ship with the Allens. Thomas A. Roberg, David Stover Officers. North Carolina counties are required to do revalu- Based on a recent filing with the State Ethics Commis- Robert Stowe III, J.M Bryan Taylor ations at least every eight years, but may choose to do them sion, he holds the title of director of acquisitions for Water- Andy Wells front Communities Inc., owned by the Allens. Board of Directors more frequently. The purpose of the revaluations is to update the prop- In September 2008 CJ asked Campbell if he knew who reserved the Cannonsgate lot for Gov. Easley and who Carolina Journal is a monthly journal erty values that may have changed at varying rates since the of news, analysis, and commentary on state previous revaluation.