A probe of the City of Rocky Mount by State Auditor Beth Wood and her team said there were failures to follow the guidelines of city programs designed to help developers and property owners replace roofs of downtown buildings and renovate downtown buildings.
The report, which was made public on Friday, said the findings showed $32,452 in uncollected loans and $28,000 in improperly awarded loans and grants.
The report said when Vanessa McCleary was the downtown development manager from 2010-13, there was a failure to start collections of Downtown Roof Replacement Assistance Program loans for four properties either lacking a required certificate of occupancy — or in which the property owner obtained one well after the incentive period to secure such a document.
The city was given a chance to respond to a draft report by Wood and her team after the end of the probe.
The city said $10,000 was awarded in March 2012 for property at 325 Nash St. and listed in the name of D&P Enterprises.
That is presently the location of H.D. Pope Funeral Home.
The city also said $10,000 was awarded in October 2013 for property at 116 Tarboro St. and listed in the name of Garland Clark, who is identified on the internet as a municipal natural gas systems supervisor.
That is presently the location of Blanche’s Bistro. City Councilman Reuben Blackwell's wife, Neva, has been well-publicized on websites as the operator of the business.
The Telegram in early 2019 reported 116 Tarboro was gifted by Clark in April 2015 to Virginia Knight, who is the mother of Councilman Andre Knight.
The Telegram also reported the deed was prepared by Lamont Wiggins, who was a councilman and practicing attorney at the time and who is presently a Superior Court judge.
The city also said $8,394 was awarded in March 2012 for property at 112 Tarboro and listed in the name of Canade Enterprises.
The city also said $8,152 was awarded in March 2012 for property at 118 Sunset Ave. and listed in the name of Building for Life Computer Center.
And the city said $8,000 was awarded in May 2013 for the Opportunities Industrialization Center Happy Hill family medical center at 300 N. Grace St. Blackwell is CEO of the OIC.
According to the city, with the exception of the properties at 112 Tarboro and 118 Sunset, all of the properties had a certificate of occupancy during the term of the loan or already had a certificate of occupancy on the date of the grant.
The city said the 118 Sunset property was foreclosed.
The state audit report said the city inaccurately claimed a certificate of occupancy was not required for eligibility for roof replacement program funding at 325 Nash.
The report also said the city improperly asserted such a document was not needed because of a business being at that location on the date of the funding.
The report said the roof replacement program's guidelines do not waive the requirement of a certificate of occupancy if a business already was there on the date of the funding. The report also said the city failed to provide any documentation for the funding for 325 Nash.
And the report said the city could not provide evidence of efforts to collect on the loans for the property at 325 Nash and for the then-Clark property at 116 Tarboro — and admitted not attempting to collect for the loans at 112 Tarboro and 118 Sunset.
As for the OIC building, the issue appeared to be whether the property was considered just outside the boundary of the downtown revitalization area and ineligible for a grant.
The city said the municipal government consistently has interpreted properties on both sides of boundary streets as eligible for grants.
The state audit report on Friday said program guidelines make clear the structure must be within the boundaries of the downtown revitalization area.
Additionally, the report said when John Jesso was the downtown development manager from 2014-18, there was a failure to follow guidelines in connection with a $20,000 Downtown Building Assistance Program (DBAP) grant.
The city, in response to the draft report, said the state auditor’s office advised the city of a failure to follow DBAP guidelines for 119-121 N. Washington St.
The city said it did not have a file about this DBAP grant, but the city said from documents provided by the State Auditor’s Office, it appears the work covered by the grant was completed after the application was made.
The state audit report on Friday said the city’s narrative is misleading.
The report said the work done along Washington was in fact completed before the DBAP grant application was approved in November 2014.
The report said the DBAP guidelines make clear any work done prior to approval of a DBAP grant application is ineligible for funding.
The Telegram in the past has reported the 119 North Washington location as having been developed by Clark.
That is presently the location of the D Chill Spot restaurant and bar.
Overall, the state audit report said McCleary and Jesso either failed to follow or elected to ignore program guidelines but did not completely place blame on them.
The report said since-former Community and Business Development Director Landis Faulcon did not provide adequate oversight, either.
Faulcon was hired in January 2018 by City Manager Rochelle Small-Toney to serve in what was a newly created position. Faulcon resigned in September 2019 after having been placed on leave after questions arose about her competency and after reports of continuing to live in Virginia’s Hampton Roads area and in Halifax County.