Legal costs continue to grow surrounding efforts by the city of Mount Airy to redevelop former the Spencer’s industrial property downtown.
After approving a budget amendment in November to pay an additional $60,000 to a Charlotte attorney to cover his services, which had not been anticipated, the Mount Airy Board of Commissioners was faced with another such vote Monday night for $100,000.
Though a budget amendment for that sum passed, the action was not unanimous.
Commissioner Jon Cawley, the lone dissenter in the 4-1 decision during Monday night’s city council meeting rescheduled from Thursday, explained Tuesday that he is concerned about the rising legal expenses incurred by the municipality for the Spencer’s project.
“At some point we have to stop the bleeding,” Cawley said of the costs involving plans for a new four-star hotel/banquet center and upscale apartments using former buildings of Spencer’s, which ceased production of infant/children’s clothing in 2007.
“That’s a quarter of a million dollars,” he said of the more than $260,000 incurred to date, counting the funding approved Monday night.
At the heart of the issue is Mount Airy’s relationship with Mac McCarley of the Parker-Poe law firm in Charlotte, with whom the city government contracted in April 2016 to spearhead the transformation of the former industrial property it bought in 2014.
That pact called for paying McCarley — a recognized expert in the redevelopment field with 20 to 25 public-sector projects under his belt — at a rate of $375 per hour. At the time it was forged, city officials estimated that the attorney’s services would total $37,500.
This proved not to be the case, as revealed during the fall when the commissioners and Mayor David Rowe learned that Mount Airy had paid McCarley’s legal firm $101,002 — and counting. Additional invoices totaling more than $32,000 above that amount also had been received.
That led to the board deciding 4-1 on Nov. 16 to approve an amendment to the 2017-2018 municipal budget to supply $60,000 for the Spencer’s legal fees. Cawley also cast the dissenting vote then.
The $60,000 was aimed at covering the unpaid invoices, plus additional work required to complete the redevelopment project, based on an estimate by the attorney.
In November, Mayor Rowe explained that the services the municipality originally expected McCarley to provide when contracting with him in 2016 had greatly expanded. And the expenses followed suit for what universally has been considered a complex project.
“I understand that the scope changed,” Cawley said Tuesday.
“The scope of what we were looking at changed and his (McCarley’s) responsibilities changed,” he added. But the North Ward commissioner didn’t think “the changes we were going to do would have such an effect on the city’s finances.”
The additional $100,000 approved Monday night is to cover unpaid invoices for the attorney’s work and future legal expenses, based on discussion before the vote.
Cawley was not confident Tuesday that the money allocated so far — $261,002 — will be all the city spends for the legal services.
“I have no idea.”
At the attorney’s rate of $375 per hour, that $261,000 would be equal to about 700 hours charged to the city.
The sentiments expressed by other city officials in approving the budget amendments reflect the notion that pulling the plug on funding for legal services at this point would hamper the redevelopment.
Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.