Deep in the 42-page affidavit outlining the federal government’s investigation of Patrick Cannon, the former mayor touts his ability to connect a supposed business partner with a “prominent Charlotte developer” with significant land holdings along the proposed streetcar line.
“There are going to be opportunities, so just stay close,” Cannon tells an undercover agent, according to the document. “There is money to be made.” The affidavit also shows agents offering cash in exchange for Cannon’s assurances that he could intervene in the city’s permitting and zoning processes.
The affidavit doesn’t identify the developer Cannon was talking about, and it gives no indication Cannon actually had close ties with any developer connected with the streetcar line.
Two landowners with significant acreage under development along the streetcar’s path said they don’t think the investigation’s findings reflect how developers operate in Charlotte. Streetcar advocates say they hope the investigation doesn’t hinder the transit line’s progress.
Sign Up and Save
Get six months of free digital access to The Charlotte Observer
“I am disappointed and saddened by the allegations. If they are true, I believe they do not portray an accurate picture of the above-board manner in which the development community conducts business in Charlotte,” Clay Grubb, CEO of Grubb Properties, said by email. “I have confidence in the integrity of Charlotte’s development community.”
Grubb Properties has put together a $240 million plan to revitalize Elizabeth Avenue in the six-block corridor between Central Piedmont Community College and Novant Health Presbyterian Medical Center. The first phase of the streetcar line, also known as the Lynx Gold Line, runs directly through it. Grubb Properties’ plans include transit stops.
Grubb Properties began assembling land in 1999 and joined forces with the hospital in 2002. Grubb’s company owns about $40 million worth of real estate along the Elizabeth corridor, he wrote federal officials last year in a letter advocating for the streetcar line. The company has built a retail building on the land that briefly housed the now-closed Loft 1523 bar. Grubb has several other Elizabeth Avenue projects in the works, he wrote.
Combined, Grubb’s holdings comprise about 12 acres, one of the largest tracts owned by a single developer on the proposed streetcar line, county property records show.
Grubb has been a member of the Charlotte Streetcar Advisory Committee. Records show he personally has given $1,750 to Cannon’s campaigns since 2003.
“I don’t have any idea if Patrick Cannon dropped my name,” Grubb said by email. “I hope these allegations do not disrupt the planned streetcar expansion. I believe the streetcar is the most important economic development tool to improve the east and west sides of Charlotte.”
Novant declined to comment, referring questions to Grubb.
The Charlotte streetcar project has been controversial since its conception.
Its supporters push the $126 million Gold Line as a crucial connection between the east and west sides of the city that will revitalize lower-income areas of Charlotte. They cite the success of the Lynx light-rail line in spurring development in South End.
Opponents have called the streetcar too expensive. Council members repeatedly clashed over the issue, and debate between the two sides has sometimes carried racial undertones. Still, the plan has steadily pushed forward.
Construction is underway on a 1.5 mile spur from the center of uptown, down Trade Street and Elizabeth Avenue to Hawthorne Lane.
A proposed second phase would extend the line west toward Johnson C. Smith University and northeast toward Central Avenue. In 2012, plans backed by then-Mayor Anthony Foxx called for a property tax increase to help pay for its construction. It was voted down by a majority of council members, including Cannon.
But in May 2013, the council committed $63 million for the project, with the support of Cannon, who was then campaigning for mayor. The city is still seeking federal grants for another $63 million.
City Council members voted to allocate an initial $12 million to begin planning on the project earlier this year.
Cannon and the Gold Line
Days after Cannon voted to support the streetcar last May, undercover FBI agents posing as commercial real estate developers began talking to Cannon about launching projects along the Gold Line and other major transit projects in Charlotte.
The agents offered cash and other gifts in exchange for assurances that they wouldn’t have problems with planning, zoning, permitting or licenses as their developments came together.
According to the affidavit, Cannon repeatedly indicated that he would work to speed the Gold Line along to help his supposed business partners.
In one instance, Cannon described an upcoming visit to the White House to meet with Cabinet secretaries and President Barack Obama. “I’m gonna say the Gold Lynx line’s a priority and I want to see that through,” he tells the undercover agent.
The affidavit also shows Cannon calling City Manager Ron Carlee while in the presence of an agent to ask Carlee about the time frame for getting streetcar tracks in.
In an earlier meeting, Cannon was speaking with undercover agents about being able to convince foreign investors he could smooth out zoning and permitting problems. He said he could obtain Housing Trust Fund money for their projects.
The fund comes from voter-approved housing bonds and helps finance projects that provide housing for low-income people in Charlotte, such as Charlotte Rescue Mission properties.
Grubb Properties was a developer on a Charlotte Housing Authority public housing project in the Belmont neighborhood, called Seigle Point. The project was awarded $1.8 million from the trust fund in 2006, while Cannon was out of office. Grubb said the trust fund money was lined up by CHA before his company was involved.
Development community concerned
Since Cannon’s arrest last week, local developers and transit advocates have questioned what impact the allegations would have on current and future projects.
Mike Griffin, a prominent landowner on the proposed second phase of the streetcar line, said he doesn’t believe Cannon truly has close ties with developers working along the Gold Line corridor.
“I think he was just bluffing,” said Griffin, who developed the $26 million Mosaic Village near Johnson C. Smith University and has a 60,000-square-foot office building in the works near the future Gold Line extension. His family owns about 6 acres on the west side of uptown.
He said he’s very familiar with the projects and landowners between Interstate 77 and Johnson C. Smith. “I can just tell you that I’m 99 percent certain he has no relationships with those folks,” Griffin said.
Shannon Binns, executive director at streetcar advocate Sustain Charlotte, said he doesn’t feel the Cannon investigation should threaten the transit project. He worries it will, though.
“I think this association of the Gold Line with what Cannon’s been accused of doing is a real misleading and unfortunate thing that’s taking place,” Binns said. “I absolutely don’t think that the two should be used in the same discussion.”
One potential problem could arise as the city condemns private land to build the Gold Line, said Susanne Todd, an attorney with Johnston, Allison & Hord.
“It raises a question about the validity of the condemnation,” said Todd, who represents property owners who have had land taken in CATS projects. “Governments only have authority to condemn private property for a public purpose. Does the Gold Line benefit the public as a whole or the private development of a few?”
Carlee, the city manager, said the city is not concerned that the investigation will delay the streetcar project.
“There is no concern about disruption or delay with regard to the Lynx Gold Line from any of the recent events,” he said in an email. “The city is busy performing the work necessary for our application for federal funds, which will be submitted later this year.” Staff writer Rick Rothacker contributed.