Tuesday, May 28, 2024

Regional Report Eastern May 2011


Legislator: TransPark can’t climb above debt 

The North Carolina Global TransPark’s $39.7 million IOU to the state Escheat Fund underscores Benjamin Franklin’s axiom that those who go borrowing end up sorrowing. GTP’s latest audit warns that the debt, which has been growing since 1993, threatens the 2,500-acre industrial park’s future, and this time the hand-wringing that traditionally follows the annual release of its financial figures is likely to force lawmakers and TransPark executives to come to grips with congenital flaws in the project.

“The debt, quite frankly, is something they can never pay back,” says Rep. Stephen LaRoque, a Republican from Kinston, GTP’s home. “I wish everybody had sat back at first and said, ‘Let’s look at how this thing is being financed and how we’re going to pay for it.’”

The brainchild of UNC Chapel Hill professor John Kasarda, GTP was intended to attract just-in-time manufacturers who would use its two-mile runway to fly products worldwide. It attracted no major tenant until 2008, when Wichita, Kan.-based Spirit AeroSystems Inc. announced it would make airplane parts there. Lured by incentives that cut its rent to $100 a year, it agreed to hire 1,031.

The report from the state auditor’s office shows GTP grossed about $1.4 million during the fiscal year that ended in June but spent $5.4 million. Executive Director Darlene Waddell says revenue came mainly from tenant leases and fees charged for aviation fuel pumped there. Kasarda’s plan called for companies to support the park by paying big money to lease space, but with few tenants and its biggest one paying nominal rent, that revenue stream has been disappointing. Meanwhile, interest continued to mount on the original $25 million loan from the Escheat Fund, pushing its balance by January to $39,719,902.

The fund, which has more than $400 million, was established to hold unclaimed property such as abandoned bank accounts. But the General Assembly, desperate in 1993 for ways to finance the project, tapped it for a $25 million loan. “The Escheat Fund should never have been used to finance the TransPark in the first place,” LaRoque says. “It should have come from a general appropriation.” He and other legislators have worked behind the scenes on a plan for dealing with the debt. But the options are few: GTP can go bankrupt, at least technically; ask the General Assembly to pay off the loan from general tax revenue; or hand over the deed to the state.

The project has been criticized since birth as a boondoggle, and legislators say using the general fund to pay its debt would trigger a firestorm. LaRoque is coy about lawmakers’ plans but doesn’t rule out steps to make GTP self-sustaining. “You’re going to have to build more buildings that you can rent out at market rates. That would have to be done through an appropriation, not a loan, because it’s not generating enough revenue to pay off the debt.”


TARBOROKeihin Carolina System Technology, part of Japan-based Keihin, plans to add 50 jobs this year, bringing employment to about 420. Its factory here produces parts for automatic transmissions in Honda and Acura automobiles.

GREENVILLE —  University Health Systems of Eastern Carolina lowered its 30-year lease-purchase offer for Beaufort Regional Health System in Washington from $30 million to $25 million after a recent audit questioned Beaufort Regional’s accounting practices.

BATTLEBOROLS Tractor USA, part of South Korea-based LS Mtron, opted out of an incentives deal with the state that could have netted it $995,000 because it won’t meet its job-creation target of 134 employees. It employs only 23 at
its warehouse and factory here.

FAYETTEVILLE — Retired Army Gen. Dan K. McNeill, former commander of Fort Bragg, was hired as president of The Logistics Co. It employs roughly 200 here, providing logistics services to government agencies and private companies.

KINSTON — Lionville, Pa.-based West Pharmaceuticals will spend $29 million to upgrade its plant here. No new hires are expected immediately. West employs 325 making parts for syringes and other medical devices. It rebuilt the plant after an earlier one was destroyed by an explosion and fire in 2003.

FAYETTEVILLE — The addition of troops at Fort Bragg has fueled a boom in hotel business in the metro. Demand for rooms grew 23% from 2005 to 2010, while
lodging revenue was up 50% to more than $96 million.

 The owners of Citation, the Hatteras-based boat disqualified last year after landing a record catch in the Big Rock Blue Marlin Tournament in Morehead City, plan to appeal the dismissal of their lawsuit challenging the disqualification. Tournament officials say one of the boat’s mates didn’t have the proper fishing license. At stake is a prize of more than $900,000.

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