The Henderson City Council approved a “memo of understanding” with the North Carolina Community Development Initiative for the rehabilitation of the warehouse at 201 Zene Street at its regular meeting on Monday evening.
A major stipulation of the agreement between the city, the Henderson-Vance Downtown Development Commission, Henderson-Vance Weed & Seed, and the Initiative is that the city will provide $25,000 in matching funds through a grant from the Rural Center. The agreement states that the Initiative will prepare the application for the grant and submit it on behalf of the city. The Initiative will also provide supporting documentation for the grant.
The chances of actually obtaining the grant from the Rural Center are not known.
The city will be required to front $12,500 to the Initiative in advance of the grant payout. Once the initial grant payout is made to the city of $12,500, the city will be required to submit the second payment of $12,500.
City Attorney Billy Strickland noted some problems with the original form of contract at the June 9, 2008 Henderson City Council meeting. He stated at that meeting that he wanted “to limit the city’s liability” and that he wanted “to think about the terms”.
The memo of understanding that was accepted by the council closely resembles a memo of understanding submitted by Abdul Rasheed, the CEO of the Initiative, for the Henderson City Council meeting of June 24, 2008. The agenda for that meeting included a reference to a version of the contract authored by City Attorney Billy Strickland. That discussion was taken off of the agenda at the outset of the meeting, and Strickland’s version of the contract was never distributed.
The major difference between the two documents appears to be greater detail in the second version as to how the Initiative will support the city in its grant request and grant maintenance.
Rasheed was present at Monday’s meeting, but declined to comment on the memo of understanding when he was invited to do so by the council.
Programs of the Initiative do not always require contractual arrangements with municipalities or guaranteed funds. For example, this recent project in which the Initiative has invested $1 million is financed entirely with non-municipal funds. It is, however, clearly a for-profit venture, with the profits to be used to finance charitable enterprises.