Harvester Scheme Drains Taxpayers
By the time the doors of The Harvester Performance Center opened in April of 2014, the Rocky Mount Town Council had sunk $4,000,000 into the project. During the early stages, members of the Council were pushed to vote without knowing the full details of the project.
In August of 2012, Assistant Town Manager Matt Hankins assured Council that Gentry Locke Rakes & Moore’s “Bruce Stockburger, will be looking out for the Town to make sure the document presented to the Town’s EDA and Council will be understood by all before the Town’s EDA signs off on it. Mr. Stockburger will make sure everything is kept right.”
In an August 2013 Council meeting, former Councilman Bobby Cundiff stated, “As far as the EDA and forming it,…We’ve got seven people on Council that can’t agree, so why would we add seven more to make a difference.”
Former Councilmember Jerry Greer stated, “that he personally would like to have Council put off making any decision on this matter for 30 days because he would like to have some questions answered. The Mayor indicated it was his belief that those questions were answered in Closed Meeting. Council Member Greer stated that he is not against the program, but wants to make sure he understands.”
The minutes of the same meeting indicate, “Council Member Greer stated that he would like to see the whole deal before he votes on it. The Mayor indicated that until the tax credits are sold, staff will not know.”
Councilman Cundiff continued, “I don’t think the Town should be in the entertainment business. This goes far beyond what a government body should do. When I ran for this office, I promised that if I wouldn’t put my personal money into a project that I didn’t support, I wouldn’t vote to put taxpayers’ money into it.”
Pushed by then Town Manager James Ervin and Assistant Town Manager Matt Hankins, the Council moved forward. They continued with an Economic Development Authority and eight shell corporations that fulfill one or two functions each.
A shell corporation can be used for any number of things, including money laundering, hiding assets, or in this case, hiding debt. Members of the Council and the Town Manager’s office have repeatedly misled the press and the citizens they serve. The Roanoke Times, The Franklin News-Post, and SWVAToday have all three printed information regarding The Harvester without fact-checking. Whether it is The Harvester’s profitability or the number of shows they hosted, the figures are inflated.
This CAFR referenced in the image above goes on to “explain” the organizational structure.
The description of the organization is more confusing than the drawing. “The EDA is the holder of the construction loan to Performance Center Building LLC. The EDA holds the master lease for 40 years, leasing the property to Performance Center Building LLC. The EDA is the sole member of Performance Center Manager LLC and Performance Center Development LLC. As Performance Center Building LLC repays its obligation to the EDA and as the EDA receives compensation for its development services provided to HPC through the EDA’s affiliate (Performance Center Development LLC), the EDA will contribute such funds to the Town under the contribution agreement in place between the Town and the EDA.
“Performance Center Manager LLC leased certain furniture and equipment to Performance Center Tenant LLC. Performance Center Manager LLC is the 89% managing member of the Performance Center Building LLC and a .01% managing member of Performance Center SCP LLC.”
Yes, they created one LLC to lease the chairs to another LLC. It is the organizational equivalent of a New York City sidewalk shell game. Pick the right LLC and you will find the money…maybe. Keep reading and you will wonder if there is any money left.
Seven paragraphs into the organizational explanation, it is indicated, “CB Performance Center LLC is the 99% investor member of Performance Center Tenant LLC. CB Performance Center LLC’s sole member is Carter Bank & Trust who is an investor member.”
In paragraph ten, we learn, “Performance Center Tenant LLC receives 45% of concession receipts and all ticket sales related to the operation of the HPC.”
Carter Bank and Trust is the sole member of CB Performance Center LLC. CB Performance Center LLC is the 99% investor in Performance Center Tenant LLC. Performance Center Tenant LLC gets 45% concession receipts and all ticket sales.“
Between 2014 and March 2020, The Harvester Performance Center had $7,312,353.49 in ticket sales. They had an additional $1,033,611.50 in concession and merchandise sales, for a total of $8,345,964.99. Funneled through two shell corporations, Carter Bank & Trust made $3,718,127.40.
Three million, seven hundred and eighteen thousand, one hundred and twenty seven dollars and forty cents.
For what? What is their stake? The Town has repeatedly stated, “Funding for the construction of the HPC was obtained in part through approximately $1,000,000 in investments related to federal and state historic tax credits. The Town used a $500,000 grant from the State Tobacco Commission for equipment related to the HPC.”
According to the town, The entire project from the purchase of the building to getting the doors open cost the Town $3,255,483.92. Carter Bank & Trust has made $462,643.48 more than it cost to build The Harvester Performance Center.
There must be something the Town is not telling us. Who would negotiate and agree to such a deal?
In a June 2020 article, The Franklin News-Post reported Assistant Town Manager Matt Hankins “led the downtown venue from conception through construction and opening.” Hankins commented, “Building, creating and sustaining the Harvester Performance Center is the highlight of my professional career.”
Of the combined ticket and concession sales of $8,345,964.99, The Harvester would gross $4,590,280.74. We have no way of knowing what the net figures were for ticket sales, as we do not have access to band or promoter fees. We can, however, piece together information we know with information we can find.
On September 6, 2017, The Harvester hosted Willie Nelson. The average ticket price was $168.29. The HPC saw ticket revenue of $95,833.00. That is a nice haul for a small venue, but remember $43,124.85 of that goes through two LLCs and ends up with Carter Bank & Trust, leaving the Harvester with $52,708.15. Talent booking sites list Nelson’s minimum fee between $100,000 and $300,000. Did The Harvester Performance Center make any money on its most high-profile event?
In concessions, we know gross sales were $1,033,611.50. Of that, $465,125.18 made its way to Carter Bank & Trust, leaving the Harvester with $568,486.33. Subtract the $338,628.18 in expenses that the Harvester is responsible for, and they are left with $229,858.15. A pitiful 22.23% of gross sales.
Again, who would agree to such an unbalanced arrangement?
In addition to his role as Assistant Town Manager, Matt Hankins served as the CEO of The Harvester Performance Center. Hankins was also the head of the Friends of Live Music (FLOMRM) in Rocky Mount. It was in that capacity that Hankins did a little double-dipping. When a Rocky Mount Police Officer reached out to a contact and arranged a substantial donation to FOLMRM of $100,000.00, Matt Hankins, though not involved in seeking the donation, gave himself a finder’s fee of $5,000.00. Efforts to inspect the financial records of this registered 501(C)3 have been fruitless as its officer’s report it is now defunct.
The State Corporation Commission, however, lists the organization as active.
Would there even be a need for charitable donations to The Harvester if they weren’t obliged to give away 45% of their gross receipts?
Matt Hankins wasn’t the only breadwinner in his family. As Hankins inched closer to the opening of the Harvester, his wife Dulcie Webster Hankins developed a business plan of her own. With the funding in place, she opened Wood Grains, LLC. The store sells beautiful, American-made, hardwood furniture and gifts from more than 40 local artisans. Dulcie officially founded and incorporated her business just a few days before The Harvester opened.
Wood Grains, LLC would soon relocate to the building directly across from The Harvester, a prime location by any measure. Despite the notion of impropriety, Wood Grains, LLC would also receive a low-interest loan from the Town of Rocky Mount. It should be noted that the loan program fell under the auspices of the office of the Town Manger and Dulcie Hankins’ husband is Assistant Town Manager Matt Hankins.
When previously discussed, Mrs. Hankins stated, “Town employee family members with businesses in town are NOT prohibited from applying for microenterprise loans.” She also commented, “If my husband was a co-owner in Wood Grains, I would not have been eligible for the loan.” However, the Wood Grains, LLC website references Matt Hankins as “working” with the Company, “My husband takes off a week of work, and we load up the truck — our Pony Express — and head for Ohio Amish country. No, we’re not vacationing; we’re working as we take in the sights and sounds of the annual Ohio Hardwood Furniture Market,” and includes photos of Mr. Hankins attending furniture shows.
Mrs. Hankins does make it clear, however, that it wasn’t the low-interest loan from the Town that allowed her to open her business in 2014. “Who really allowed me to start my business was Worth Carter of Carter Bank,” wrote Mrs. Hankins. She continued that Mr. Carter “believed in my business plan enough to do a business loan for me to get started.”
So Carter Bank & Trust inks a deal with the Town where they get 45% of gross receipts in concessions, merchandise, and ticket sales. This deal would give them, to date, more than $4,590,280.74. According to Assistant Town Manager Matt Hankins, he oversaw this deal. When questioning the ethical implications of the Town loaning money to the business interest of a Town employee, we are assured that it was not the Town but Carter Bank who made the advantageous loan to Mrs. Hankins– all during the same timeframe that her husband was giving them a most-generous interest in The Harvester Performance Center.