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Lovers of Raleigh's Lake Johnson sing the blues.

Trotline 

The Mud Puddle Formerly Known as Lake Johnson?
Raleigh City Councilor Benson Kirkman was one unhappy fellow the morning after his colleagues decided not to buy 12 woodsy acres next to Lake Johnson Park from the developer who's fixing to start building on them. "There's going to be runoff going straight into the lake and into Walnut Creek," Kirkman said. "We could end up spending twice as much to fix things later."

Kirkman's not giving up and the e-mails are flying as he and the members of Friends of Lake Johnson try to rally support, but time's a-wasting. Developer Steve Dickson's already put in for a grading permit to start work on 88 townhomes, and according to his application, if he gets it approved (there are some issues with it, Kirkman says), he could start scraping the trees off within two weeks. Buying Dickson out--via condemnation, since he's not a willing seller--could cost the city about $1.9 million, Kirkman says, though the tax value of the land is about half that. On the other hand, the 12 acres are considered a "critical piece" in the city's master plan for the park, which is why Kirkman was amazed that the Parks and Recreation Department didn't back him up. "I really thought I was going to get support from staff," he said.

Instead, they were neutral and failed to mention that the city might not have to pay the whole tab. Kirkman thinks Wake County might put up $250,000 from open-space protection funds approved by the voters in 2000, and more could come from the state Parks and Recreation Trust Fund. "According to what I was told, this would be considered a top priority because it's in a developing urban area, it's a critical piece of an established park plan, and because of the threat to the water quality of the lake and Walnut Creek."

State funds are awarded on a competitive basis, with applications for the 2002 round due Jan. 31, Kirkman said. The city's never gotten much from the state, he added. He knows--he's a former chair of the Parks and Recreation Commission, an advisory board. "It's a matter of public record that we haven't applied for much."

The eight council members met in closed session on the issue Thursday night. Only Kirkman was for buying the land, but he thinks several others are persuadable if they can be convinced that other sources of money are available. What's the next step? "The next step is to get the pubic aroused," Kirkman said.

A Lack of (Human) Resources
Help Wanted
Positions Available:
Police Chief
Assistant City Manager (two vacancies)
Director, Employment and Economic Development
Director, Property and Facilities Management
Director, Human Relations
Director, Equal Opportunity/Equity Assurance

Unemployment is rising Triangle-wide, but Durham's top city staff seems to be particularly afflicted. Three senior staff members--including an assistant city manager--were fired or resigned in the wake of the small business loan scandal that rocked the economic development office last summer. The other remaining assistant city manager just accepted a job in Myrtle Beach. And the Bull City's top cop is on to greener pastures with the U.S. Park Police in D.C. this month. Other posts have sat empty for six months or more. Human Relations Director and former mayor Chester Jenkins resigned amid a slumlord scandal in December 2000. Former equal opportunity/equity assurance Director Cora Cole-McFadden retired last summer, campaigned for city council, won, and has begun serving, but her old office is still empty.

Elected officials say the vacancies are the city manager's challenge.

"This is an opportunity for the city manager to shape her staff," says Mayor Bill Bell. "It's a matter of sorting out the right person for each job."

City Manager Marcia Conner, who arrived in Durham last June from Austin, Texas, says she has a plan. She has hired an executive search firm to do some headhunting. She's put the assistant city managers' positions at the top of her priority list, and then the economic development director, which will take a specific skill set, she says.

"I need someone with balanced experience in downtown development and bringing major corporations to Durham, but I also need an economic development director who can assist with issues in North-East Central Durham," she says.

That office was the headquarters of the 2001 loan debacle, in which federal auditors allege the city staff and its outside consultant lost track of and misspent $850,000 aimed at helping local small businesses in depressed parts of town. For their parts in the scandal, Conner fired Property and Facilities Management Kendall Abernathy, a longtime city employee and former housing director, and Assistant City Manager Greg Bethea. The former head of the economic development office, Greg Payne, resigned of his own accord in the flurry of inquiries, he says.

Payne, 37, was thinking about leaving city government work after 10 years anyway, he says, and it was a good time to make a change. Still, his leaving left the impression of guilt; political wags around town say he took the fall for the loan mess, a rumor amplified when he offered a month's notice and Conner told him to clean out his office the next day. Today, Payne is still in Durham, looking for a job in the private sector. He recently earned his real estate broker's license and is planning his September wedding.

Meanwhile, Conner says she's optimistic about the way her team is shaping up. She has brought a temporary assistant city manager up from Florida, who started last week. She is using consultants to fill in some duties. She points out the planning director's job has just been filled, and she hopes to make an announcement of the new human relations director this week.

And just in case you're wondering who's tracking all these vacancies, well, we'll tell you: It's the interim head of human resources, Kevin Patton. The regular director is out on extended medical leave.

Sizing Up Subsidies
Anyone doubting the civic virtues of the Internet should subscribe to the Chatham County Online Chatlist, a consistently lively community forum. There any local with an e-mail account can add their two-cents to spirited discussions about politics, culture and commerce. Of course, sometimes the "chats" read more like spats--but even then they can bring some light to murky issues. Take the recent back-and-forth on federal agriculture subsidies, for example.Wallace Kaufman, a real estate developer, conservationist and author who lived for decades in Chatham but recently moved to Oregon, got the ball rolling when he posted a list of the county's top 60 recipients of federal farm subsidies. Kaufman obtained the list, and information about all of the 546 Chatham County farms that received subsidies in the last five years, from the user-friendly Web site of the Environmental Working Group (EWG), a Washington, D.C., nonprofit that is pushing for reform of the subsidy program.

Every year, the U.S. Department of Agriculture mails out checks to farmers that qualify and apply. The official purpose of the government money is to keep farms afloat as they are buffeted by bad weather and fluctuating world markets. But the newly compiled data, critics say, suggests that the current subsidies are doing more harm than good. A disproportionate share goes to the biggest farms, squeezing out smaller operations and increasing consolidation.

According to the EWG, Chatham farms received $2.6 million in subsidies between 1996 and 2000. The county's top recipient was R.D. Lee Farms, based in Sanford and Erwin, which received $209,130. On the lowest spot on the list, Jimmy Stout of Siler City received $1,628.

When the EWP released the database in early January, people across the country got their first look at who gets what from USDA coffers. The numbers sparked debate about what the next federal ag-support bill, due this year, should do differently. In farm-laden Chatham, the debate was close to home and heated, as Kaufman's post raised a small ruckus on the chatlist. Jonathan Manning of Pittsboro fired off this missive: "I was shocked to see how much welfare Chatham County farmers were getting. If you can't make a living doing one thing, maybe you should try something different. Paying a farmer not to grow a crop is no different than giving food stamps to a crackhead baby factory."Several rebuttals flowed in. "I was surprised to see the farm subsidy program called 'welfare' and worse," wrote an anonymous poster. "It was intended to keep our farm land always in a position that it could become the sole source of this country's food production in the time of a war or a disaster. It also is supposed to assist the small farmer compete in areas that the cost of farming has risen through no fault of his own. ... That the program has gotten out of hand is a no-brainer. Let's fix it!!"

Then an expert weighed in. Sam Groce is the Chatham County agent for the North Carolina Cooperative Extension Center, an N.C. State University program that promotes conservation and small farming. Groce argued that, at least in Chatham, "the majority of those farms [receiving subsidies] are what one would consider small family farms."

"It should be noted that the American Farmer is a businessperson," Groce wrote--and businesses sometimes get bailed out. "Right or wrong, what did the U. S. government do when Chrysler was failing in the '80s, [and] what about the airline industry this past fall? The American Farmer feeds 100 percent of the population of the United States. Our exports also feed many people in other parts of the world."

The chatlist exchange showed how online communications can advance community debates. It started as a veritable food fight, and then became, as Groce noted in his post, "food for thought."

To subscribe to the Chatham County Online Chatlist, send the message "subscribe" to the e-mail address chatlist@bellsouth.net. The EWG's farm subsidy database, which features county-by-county tallies, can be accessed at www.ewg.org.

Endangered Loan Sharks?
Some of the more optimistic opponents of payday lending companies thought the establishments would become extinct when the state law regulating them expired last August. Not so. The law's expiration could have acted as both gaff and club, pulling payday loan sharks out of the marketplace and putting them out of business for good. But alas, the sharks swim on."We have a situation now in the industry that's close to anarchy," says N.C. Attorney General Roy Cooper, days after he filed suit against one lender. "It's clear that the industry is still prevalent and unfortunately there are some companies who are charging more than ever. It's an unacceptable situation."

The practice has been controversial all along, because it saps the assets of people who are already in dire financial straits, and can send borrowers into a debt spiral. "It fosters repeat lending, so some people wind up repaying far more than they originally borrowed," says Peter Skillern, executive director of the Community Reinvestment Association of North Carolina, which has pushed for payday lending reforms. Last year, he helped lead opposition to a business-as-usual proposal put forward by the lending industry when the law was about to sunset.

The General Assembly, in part due to the complaints of payday lending critics, didn't go with the industry proposal; instead, it took the path of least resistance and failed to pass a new law at all.

Suddenly, the industry appeared to be unauthorized--but also unfettered--by state regulations. Some N.C.-based payday lenders shut down, while others simply got a facelift, changing names and affiliating with banks in other states while keeping their stores running.

In the absence of action by the state legislature, the attorney general has taken the issue to the courts. On Jan. 14, Cooper and Commissioner of Banks Hal Lingerfelt filed a lawsuit in Wake County Superior Court asking a judge to order Ace Cash Express Inc. to halt its "illegal payday lending scheme." The company, which is based in Texas and operates 16 stores in North Carolina, is one of the worst offenders among short-term lenders, the state alleges.

Here's how it works at Ace: Borrowers are given two-week loans ranging from $100 to $500. For each hundred borrowed, the customer pays $17 interest. If, at their next payday, the customer wants to extend the loan, he or she can do so for an additional $17 per $100, plus an additional five percent of the principal.

"I believe that there is a place for small, low-interest loans, but those loans should be on favorable terms," Cooper says. "A loan like that is like asking for a lifeboat and being thrown an anvil."

Ace is affiliated with the Goleta National Bank in California--so the company maintains that it operates as a national bank, and is therefore bound by federal banking rules, not state ones. Cooper argues that such "rent-a-charters" don't exempt companies from the state's Consumer Finance Act and other laws.

The state's legal challenge to the industry is just getting started. "We will be announcing further litigation over the coming weeks," Cooper says.

"This is an important step in attacking this end-run the payday lenders are doing around North Carolina law," says Rob Schofield, staff attorney for the N.C. Justice and Community Development Center in Raleigh, one of the groups pushing for regulation of payday lenders. But, like other consumer advocates, he says that lawsuits aren't enough to compel the industry to act more fairly. What is needed, they say, is new legislation that lowers the interest rates and lengthens the loan terms.

State Rep. Paul Miller of Durham, who sits on the House Financial Institutions Committee, supported just such a measure last year, and believes the General Assembly will revisit it during the upcoming session. "There may be a middle ground that will not make everybody happy, but at least will protect borrowers more," he says. Compromise will be again be difficult, he predicts, because the debate between the industry and consumer advocates is just as polarized as it was last year. "Everybody's going for high-stakes right now," he says.

Schofield says that one thing has changed though: This year, opponents of the high-interest loans are riding of wave of successes in challenges to the practice around the country. "At the national level, there's a tremendous amount of activity," he says. "There's been an awakening of consumer groups and regulators."

Earlier this month, the Office of the Comptroller of Currency, a federal agency, told Pennsylvania-based Eagle National Bank, which is affiliated with 68 payday lending outlets in North Carolina, to stop making the loans.

Such steps will keep some of the more predatory lenders at bay, but if the General Assembly doesn't move to regulate the industry, loan sharks may remain the most resilient species in the perilous waters of the recession economy.

Dems to Bowles: Show Us the Money. (In the meantime, take some of ours)
In our rush to replace Sen. Jesse, we've been hanging lately with Democrats Dan Blue and Cynthia Brown, two candidates who don't have enough money to seduce the voting public. So we jumped at the chance to see how the other half campaigns, which in the Democratic primary means Erskine Bowles, the merchant banker (what?) and former White House chief of staff.Bowles had a fundraiser in Raleigh last week at the home of Mary and state Sen. Eric Reeves, and the Reeves were nice enough to let us drop in alongside the paying customers. The many, many paying customers. Ah, irony. Bowles' opponents need money and can't get it. Bowles, who counts his personal millions by the tens (unless he's in a hurry), doesn't need money; but here are 150 well-heeled folks insisting that he take theirs anyway.

No reason, then, for Bowles not to be in good spirits, which he was. Disarming, even. He likes Blue, likes Secretary of State Elaine Marshall too. Whoever wins the primary, the Democrats will be--well, you know. He stopped short of saying he'd share and share alike with them, however.

Still, Bowles is aware of the class envy lurking in the hearts of some--no one we know, but people can be so bitter--so he's developed a good ice-breaker for his stump speech (we'd heard it the other day in Durham): With a name like Erskine, a daddy named Hargrove ("Skipper" Bowles, the '72 Democratic gubernatorial candidate) and a wife named Crandall (the CEO of Springs Industries and heir to the Springmaid textile fortune), the Bowles named their three kids Sam, Ann and Bill.

What we wondered is why Sen. Reeves, a progressive sort who made a brief foray of his own into the big Senate race, is backing Bowles and not Blue, his fellow Wake County legislator? Reeves' answer: He was drawn to Bowles last year when the latter headed up the state's Rural Prosperity Task Force.

Rural North Carolina is in deep trouble, Reeves says, and Bowles' expertise in global trade and high-tech is what's needed--and what voters will be looking for. "The short answer is, when you have legal troubles, get a lawyer."

Reeves likens Bowles to Luther Hodges, the businessman-governor who launched the Research Triangle Park four decades ago. "We need that kind of new economic vision for North Carolina, and I think Erskine, because of his training and background, is the candidate who has it. ... He is progressive, just a different kind of progressive."

Coming soon to the Indy
What happened to all that tobacco settlement money?

Campy Bible tales take the stage.

The kid who used to turn the manual UNC scoreboard at Carolina tells all.

*************************************************

"He was a tall, bone-thin man who worked with nails in his teeth and a roofing hatchet in a fist as hard as Augusta brick, who ran a trotline across the Coosa baited with chicken guts and caught washtubs full of catfish, who cooked good white whiskey in the pines, drank his own product and sang, laughed and buck-danced, under stars."
--From Ava's Man, Rick Bragg's new biography of the grandfather he never knew, Charlie Bundrum

Send all tips, digs, cheers and fish recipes to madison@indyweek.com

Contributors: David Madison, Barbara Solow, Bob Geary, Jennifer Strom, Damien Jackson, Jon Elliston and other Indy staffers. Illustrated by V.C. Rogers.

  • Lovers of Raleigh's Lake Johnson sing the blues.

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