INC NEWS - Clause is hitch in Duke deal: Rezoning tied to Durham donation (N&O)

[John Schelp]

"Even if the city reserved the right to turn down the
rezoning or the site plan approval, the fact that
there's $1.5 million that's out there contingent upon
approval, I think would pose a significant legal
problem."
--David W. Owens, professor of public law & government
UNC-Chapel Hill

Clause is hitch in Duke deal: Rezoning tied to Durham
donation
By Michael Biesecker, News & Observer, 13 Nov 2006

Whether it is legal for Duke University to pay Durham
$2 million in exchange for approval of a road project
appears to depend on the interpretation of the term
"improvements."

Duke needs the City Council's approval to improve five
blocks of Anderson Street. The public roadway is key
to the university's plans to redevelop the area
between its East and West Campuses for residence
towers, retail shops, restaurants and other amenities.

Under an agreement approved Monday, Duke will give the
city a $500,000 "donation" upon the signing of a
binding agreement that pledges "timely" consideration
of the university's plan for Anderson.

The remaining $1.5 million will be granted only upon
the city's approval of Duke's Anderson Street plan and
"any other necessary approvals required by the city
for Duke to undertake the improvements."

That clause gives some legal experts pause.

If the "improvements" referred to in the agreement
relate solely to the street project -- as city
officials have repeatedly asserted -- then the deal is
probably legal, according to David W. Owens, a
professor of public law and government at UNC-Chapel
Hill.

However, if the "improvements" are in any way related
to the approval of Duke's rezoning proposal, then that
would be wrong, Owens said.

"Even if the city reserved the right to turn down the
rezoning or the site plan approval, the fact that
there's $1.5 million that's out there contingent upon
approval, I think would pose a significant legal
problem," said Owens, who holds degrees in law and
planning and who has written books on North Carolina's
land-use and zoning laws.

It is illegal under state law for a local government
to accept money in exchange for granting regulatory
approval. Such a quid pro quo -- a Latin phrase
meaning "something for something" -- would be
considered tantamount to bribery.

Durham officials are counting on Duke's $2 million
gift to plug a gap in the $44 million budget for the
city's new performing arts center; construction on the
center is to get under way before the end of the
month.

Durham City Attorney Henry Blinder advised council
members before they voted 5-1 to approve the deal that
it is "legally defensible" to accept Duke's gift as
long as it is clear to all involved that the $2
million is in no way to influence their decision
whether to approve Duke's Central Campus.

David Lawrence, a professor of public law and
government at UNC-Chapel Hill with whom Blinder
conferred, said he sees a clear legal distinction
between the Anderson Street plan and the Central
Campus rezoning.

As long as Durham's elected leaders do as well,
Lawrence said he does not see where the city has run
afoul of the law.

A flurry of e-mail messages posted by those living in
neighborhoods near the campus hammered the City
Council for the arrangement this week, expressing
doubt that the elected officials would forget about
Duke's gift when casting their votes on the rezoning
plan.

"What kind of partnership is based on bribery?" asked
John Schelp, president of the Old West Durham
Neighborhood Association. Schelp and others fear that
Duke's proposal for new restaurants and retail shops
will harm established business on nearby Ninth Street.

Professor Owens said it is not unusual for a developer
to offer inducements such as paying for new sidewalks
or a new sewer line to help win approval for a
development plan. He has never seen another example of
a developer making a cash donation directly to the
city's coffers, however.

If someone opposed to the rezoning were to sue Durham
over the deal with Duke, it would not be a "frivolous"
lawsuit, Owens said. "The question a court would be
looking at is whether in making the rezoning Durham is
motivated by something other than the policy choice,"
he said.

"Is there a sufficient carrot sitting out there that
the decision is made on the basis of that inducement
other than the public policy issues presented by the
rezoning proposal?" Owens said. "Would a reasonable
person have reason to believe that was a factor in
their decision making? Then that becomes something
folks could argue about."