Consultant fees mount for hotel
BY LINDELL JOHN KAY
Wednesday, July 3, 2019
The city has spent nearly $280,000 on consultants for the proposed hotel and parking deck at the Rocky Mount Event Center, with around half of that amount going to the developer before he signed on to build the project.
Hunt Services, the planned contractor of a luxury hotel, parking deck, retail and residential space, received $117,500 from the city for a feasibility study on the project on which he soon would enter an agreement to build.
Mayor David Combs said he was unaware when the hotel was presented to the council that Hunt had been a consultant on the project.
“I can’t speak for the rest of council, but I didn’t know it at the time,” Combs said. “It was embedded in the numbers.”
Combs is advocating for the council to review other options so the parking deck can be built at a cheaper price than the $18 million Hunt requires.
“We need to look at options to keep costs down,” Combs said.
The Hunt feasibility study has not been made public.
It does not appear that the City Council voted for any of the consulting contracts.
In addition to Hunt, the city paid $74,950 to Davenport and Co.; $39,211 to McGuire Woods; and $8,534 to Poyner Spruil, according to a request for public information.
Novogradac presented information related to the project at a recent public information session but does not appear on the list of paid consultants. It also is unclear how much is owed to other consultants involved in the project and how much more might be spent on consulting parties in the future.
One of the consultants is BWC Consulting, paid $39,000 so far, which has been working with the city since before the construction of the Event Center.
The endorsements of both Councilman Reuben Blackwell and Hunt Services President David Hunt are prominently featured on BWC’s website. As previously reported in this series, BWC acted “as matchmaker” between Hunt and city officials.
In January, BWC hosted a panel discussion on opportunity zone investments at the Rocky Mount Event Center. Included in that panel were representatives from Novogradac, which prepared the economic impact analysis for the hotel and parking; Maynard Cooper & Gale, the law firm preparing the development agreement; Hunt and City Manager Rochelle Small-Toney.
The Telegram submitted a long list of questions to city management in preparation for this series of articles. Here are a few items of note from the answers received:
Despite being only days away from the vote for approval of a development contract with Hunt Services, the city has not yet hired a third party consultant to verify whether the $17.75 million bid submitted by Hunt Services is a reasonable amount of funds to pay for the construction of a parking deck.
It has been mentioned in council meetings and in the development agreement that Hunt Services was chosen for its experience in building hotels, residential, retail and parking decks. The Telegram asked the city whether Hunt ever has built a parking deck or multi-family housing. City officials said the question should be directed to Hunt, despite city officials having told local residents and the council on multiple occasions that the city has done extensive background research into Hunt’s development experience.
When asked what specific expenses were incurred during the pre-development process, the city’s response again was to direct the Telegram to Hunt. The city should have intimate knowledge of these expenses since Section 4.2 of the Draft Development Contract requires the city to reimburse Hunt Services for these expenses if the project does not come to fruition for various reasons listed in section 4.1.
Editor’s Note: This is part three of a series of articles on the Rocky Mount City Council’s plan to approve an $18 million downtown economic development project. An important vote on the project is set for July 8.