Questions linger on Robert Pittenger land deals
Fri August 24, 2012
Questions linger on Robert Pittenger land deals
A legislative vote that ignited controversy a decade ago is sparking new questions about a candidate in the runoff in the 9th Congressional District.
At issue: a 2003 vote by then-Sen. Robert Pittenger for a bill that involved land which he partly owned, a bill that ultimately helped increase the property's value.
It's one reason 16 current or former elected officials in Union County, including seven mayors, have endorsed Jim Pendergraph, a Mecklenburg County commissioner, over Pittenger in the race to replace Rep. Sue Myrick. The Republicans meet in a July 17 runoff, with the winner facing Democrat Jennifer Roberts.
To critics, including Pendergraph, the decade-old controversy in Union County suggests that Pittenger blurs the lines between self-interest and public interest.
As a state senator representing Mecklenburg County in 2003, Pittenger voted for a bill that annexed a tract of land into Waxhaw. The land, partly owned by a partnership he'd formed, increased in value as a result, according to the developer who bought it.
"What I hear constantly is, 'Is Robert Pittenger working for himself or is he working to represent the people?' " says Weddington Mayor Pro Tem Dan Barry, a Republican who lost in the crowded 9th District primary. "He's taken advantage of his elective offices to protect the interest of his investors."
Pittenger, who served five years in the Senate before leaving to run for lieutenant governor in 2008, says he takes pains to separate the personal and political.
"We've acted above board in every way I could," he says. "We have done everything we could to avoid conflicts of interest."
Pittenger is a real estate investor whose companies own thousands of acres in four states. His partnerships have 1,700 investors, including at least two state lawmakers, a congressman, a former governor and a cabinet secretary in Democratic Gov. Bev Perdue's administration.
The real estate investment business can sometimes turn on government decisions and political connections, a combustible mix.
Other Pittenger deals have drawn fire, including investments along the path of the proposed Garden Parkway through Gaston County. But few chafe critics as much as the Union County annexation.
Annexation adds value
A decade ago, Union County was well on its way to becoming North Carolina's fastest-growing county. Developers scrambled to ride the boom. One was Charlotte developer Stephen Pace.
In 2002, Pace contracted to buy land owned by Cuthbertson Road Joint Venture, a group in which Pittenger's company was general partner. Because the land was in the county, it was zoned for one lot per acre. Pace says he needed more homes for the project to be economically viable.
So he sought help from town officials in Waxhaw, where zoning allowed denser development.
Because the land didn't touch Waxhaw - it borders Wesley Chapel - it was a so-called satellite annexation that required legislative approval. So Pace went to a pair of local lawmakers, GOP Sens. Fern Shubert of Union County and Fletcher Hartsell of Cabarrus, who offered their support.
Pittenger was elected in 2002 from southeast Mecklenburg County. In March 2003, the Senate attached the Union County measure to a Matthews annexation bill. Records suggest Pace, the developer, and Waxhaw officials pushed the bill.
But Shubert, who has endorsed Pendergraph, says she recalls Pittenger asking for her support. "He came to me on the Senate floor with Fletcher in tow and said he wished I would support it," she says. "I remember that vividly."
Pittenger disputes her recollection and has consistently denied any involvement.
The annexation bill sailed through the Senate Finance Committee, of which Pittenger was a member, and passed the Senate that June with just a single dissenting vote.
Front-page news accounts at the time raised questions about Pittenger's role and potential conflict of interest in the annexation. One report quoted Hartsell saying Pittenger had asked for his help.
Critics called the annexation a "backdoor" move by lawmakers that caught many by surprise.
According to Union County deeds, Pittenger's Cuthbertson Road partnership didn't complete the final sale to Pace until August 2005, two years after the annexation.
Robert Pittenger Co. marketing documents showed that he sold Pace that portion of the land for $52,000 an acre. That was $10,000 an acre more than he'd sold adjacent land in 2003.
Pace says he'd agreed to the final price in 2002 as part of his original contract with Pittenger's group. But he acknowledges that the annexation increased the land's value. The tract now includes the upscale subdivision of Lawson.
Asked why he voted for a bill that involved his own property, Pittenger makes a distinction: the measure was a local, not a statewide bill. So-called local bills, dealing with annexations or other local issues, are generally noncontroversial and usually pass with little debate.
"It was a nonissue, it didn't even occur to me (not to vote)," Pittenger says. "Local bills pass 100 percent of the time. If I thought it had been important at that time, sure I'd have (recused)."
The legislative ethics code said lawmakers should not vote on issues that affect their own economic interests. Then-Union County commissioner Hughie Sexton filed an ethics complaint with the General Assembly. There's no public record of any sanction, the usual result if none was levied.
Pittenger later recused himself on some votes to avoid the appearance of conflict. Two involved Gaston's proposed parkway.
Conflict at the exits
Pittenger's investment philosophy is simple: Look for large tracts of 50 acres or more with easy access to transportation arteries.
"It's all transportation driven," he told the Charlotte Real Estate Record in 2003. "It's all access driven."
It's a formula that worked with investments near corridors such as Interstate 485 in south Charlotte, where one 300-acre investment became the Highgate community. It's a formula he hopes works elsewhere, including Gaston County.
In Gaston, his partnerships own land along the route of the Garden Parkway, a proposed - and controversial - 22-mile toll road from Mecklenburg County to western Gaston.
The parkway has for years been a target of critics. Some argue that it's not needed; others that it would benefit politically connected landowners, including Pittenger. The road was recently involved in a separate flare-up in Raleigh when letters urging its funding were revealed to have been changed by Perdue aides.
Pittenger has a reported stake in about 2,000 acres near four proposed exits. Records show three partnerships alone own 1,017 acres near Belmont valued at $13.4 million.
He touted the project to would-be investors in a 2003 prospectus and subsequent marketing materials.
Although Pittenger voted on a 2006 bill authorizing the N.C. Turnpike Authority to build the parkway, he recused himself on key funding votes involving the project. Beyond that, he says he had no insider information, especially as a Republican in a Democratic-controlled body.
"As a member of the minority while in the Senate I was not in favorable standing with the Democrat leadership," he says, "and certainly had no special knowledge, only public information, that had been reported in the media."
Pittenger's projects have attracted hundreds of investors. Among them: U.S. Rep. Patrick McHenry and state Rep. Bill Current of Gaston County, Sen. Bob Rucho of Mecklenburg, and state Revenue Secretary David Hoyle, a Democrat from Gaston. Former GOP Gov. Jim Martin of Iredell County has invested in at least three projects.
"He's got a good business model," Martin says, alluding to the company's practice of assembling equity stakes.
"If he identifies a piece of property at a good price at a location where a highway interchange has been publicly announced, that's good," says Martin, who has endorsed Pittenger. "Anybody can do that. He didn't have inside information about it."
Bully or tough?
Over two decades, Pittenger has nurtured a loyal cadre of people who trust him with their money.
"He's built up such a fine reputation in real estate investment that they have repeatedly invested with him," says Ed Broyhill, a Winston-Salem businessman who himself has invested several times.
But Pittenger elicits equally strong reaction from critics.
"(He) polarizes people - you either like him or you really dislike him," says Nancy Anderson, a Republican who served four terms as mayor of Weddington and has endorsed Pendergraph.
At a Union County planning meeting a few years ago, Mineral Springs Mayor Rick Becker criticized a land use proposal. Later, he says, Pittenger walked up to Becker and council member Peggy Neill, like the mayor, a Republican.
"He said, 'I'm Robert Pittenger, a landowner, a big landowner,' " Neill recalls him saying. " 'And you people don't know what you're doing. You're incompetent.' He started off insulting us and to me he's been a thug and a bully from Day One."
Pittenger calls them "one-lot-per-acre-people" who opposed other kinds of development. Supporters admire Pittenger's toughness.
GOP Sen. Tommy Tucker of Waxhaw, who has no stake in Pittenger properties, says while Pendergraph is a former Democrat, Pittenger would be "willing to stand up" for his party and for conservatism.
"I'm a good strong-minded businessman," he says. "I'll be the same way in Congress. I'm not going to be bought."