A sweetheart deal for Parton from the start

From day one, the idea of the Randy Parton Theater in the Roanoke Valley was a convoluted trail of well meaning people, hopeful aspirations, wheeling and dealing, closed meetings, secret discussions and questionable decisions.

Nearly every Roanoke Valley resident involved in the evolution of The Randy Parton Theatre wrapped their arms around the program with the idea it would create hundreds of jobs and bring millions of dollars to a stymied economy.

Among the first formal offerings to Randy and Deb Parton was a letter of intent drafted and signed just after the city’s presentation to the Partons and their advisers in Raleigh.

The letter tells of the city’s hopes and offers the Partons what appears to be the potential for hundreds of thousands of dollars at minimal, if any risk.

The city’s letter of intent to the Partons tells of city leaders’ hopes — “We feel strong the economic impact of the proposed Randy Parton Theater & Entertainment District will be significant and will support the creation of up to 2,000 new jobs and over $100 million in new private investment.”

The Jan. 13, 2005 letter was signed by Mayor Drewery Beale, then city manager Rick Benton and Lori R. Medlin, the executive director of the Halifax County Tourism Development Authority. The next day, Randy and Deb Parton inked their names and acceptance to the document.

This document served as the starting point for all future negotiations between the Partons and the city.

It also lacks two of the key players — Roanoke Rapids Entertainment One, Michael Dunlow and George Ragsdale’s land acquisition and sales company, and B & C Roanoke LLC, the limited liability company brought in to develop the property. According to participants, Dunlow and Ragsdale had just been brought into the discussions and B & C Roanoke would not be on line until the actual economic development was signed in June, some six months later.

The document outlines the “deal” for the construction and running of the theater.

It also offers the Partons an “insurance” policy should the city be unable to build the project in a timely manner. Fifth in the city’s intent list, is the guarantee: “If the facility is not built and operational by April 1, 2006, the city will pay to Randy and Deb Parton the amount of $1,000,000 in consideration of Randy Parton foregoing other opportunities …” The $1 million payment would be credited against the annual artist fee guaranteed in the seventh item. The artist fee is established at $1.5 million for each of the five years.

The money to pay the Partons would initially come from a $3 million reserve fund “as long as Randy and Deb Parton produce and perform music entertainment shows at the facility and theater revenues support the annual artist fee.”

There were two other provisions directly relating to the Partons’ benefits covering housing and transportation.

The agreement dictated “The City will make available an acceptable home in the Roanoke Valley for use by the Partons for a period of three years from the date of a full executed letter of commitment. The home and utilities will be provided at no cost to the Partons.” The city would also “make available an automobile, acceptable to Randy and Deb Parton.”

This initial deal would eventually be modified as the economic development agreement and its addendums were negotiated and approved.

The city’s initial offering however set the tone for the future and included several promises:

• The city will secure the 25 acres needed for the theater within 90 days and incorporate the land into the city.

• The city will “arrange for the financing and construction of the Randy Parton Theater … including public infrastructure, which includes but is not limited to water, sewer, streets, parking, lighting and landscaping.” The agreement adds, “All site development and construction costs will be the responsibility of the city, with no financial guarantee required by Randy and Deb Parton.”

(Note: The initial construction cost estimate for the theater was $5,000,000. The infrastructure costs were estimated at $2,600,000.)

• “All plans and specifications for the proposed music theater site and facility will be mutually agreed upon by the city and Randy and Deb Parton.”

• During the term of the lease (five years, renewable), the city would own and maintain the theater and the infrastructure including providing utilities, property assurance and other operational costs. The operational costs specifically include an annual $500,000 budget for marketing and promotion. The city, according to the agreement, would hire a private company to manage the theater with the Partons’ blessings.

• The city would facilitate employee-training needs through Halifax Community College through the establishment of a music entertainment curriculum. The agreement predicts, “The Randy and Deb Parton School of Music Entertainment would be a model program for developing music entertainers and music production technologies.”

• After construction, the city would lease the theater to the Partons for $1 per year. If the loan was fully amortized, the Partons could buy the theater for $1. If the wished to purchase it prior to the loan payoff, the selling price would be the amount left on the loan.

• The Partons would have “total artistic control over the musical and entertainment performances.”

• Halifax County Tourism Development Authority would provide billboard signage on Interstate 95 to “effectively market The Randy Parton Theater and the music entertainment district.”  The agreement asserts based on “anticipated increase in hotel and motel occupancy tax revenues,” $250,000 from the funds generated by the district would be used as “additional marketing support to the Randy Parton Theater and Entertainment District.”

• The city also agreed to seek grants and other funding for the infrastructure and “assist and support the Northeast Partnership’s efforts to secure state legislation and incentives to further the creation and success of the theater and entertainment district, and to benefit the Partons.”

And finally, a key to where the whole project stood at that moment in time: “The city will facilitate a private development partner to work with Randy and Deb Parton in the development of the entertainment amenities associated with the theater such as the development of restaurants, shopping outlets, hotels and other entertainment ventures.”

The agreement was addressed to the Partons in care of the Northeast Partnership in Edenton. It was Rick Watson, the president and CEO of this 16-county economic development agency who had first approached Parton in Pigeon Forge, Tenn., while he was performing at the entertainment park bearing the name of his sister, mega-star Dolly Parton.

According to numerous participants, Watson was the catalyst for the Partons decision. In October 2005, as questions persisted about his business relationship with the Partons, Watson resigned his post walking away with a year’s salary as a final payment — approximately $165,000, according to published reports.

In his resignation, Watson announced he was going to work with Parton. He formally left the Northeast Partnership in March 2006.

The next month, the North Carolina State Auditor’s office was highly critical of the Northeast Partnership and its parent group, the Northeastern North Carolina Regional Economic Development Commission.

The auditors said Watson created a conflict of interest by staying on the job after agreeing to work for one of the partnership’s clients — Randy Parton’s Moonlight Bandit Productions LLC. The auditors were also critical of the Partnership’s practice of paying large bonuses and providing “sweetheart” contracts to some vendors and consultants. Watson received nearly $250,000 in one three-year period, according to the auditors.

At one point, Watson reportedly owned a significant share Moonlight Bandit but he has denied any wrongdoing.

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On Feb. 10, 2005, less than a month after signing the letter of intent, the Roanoke Rapids City Council met. In a closed session, City Manager Rick Benton presented a status report on the entertainment district project.

At this point, the Council considered the letter of intent. The minutes of the closed session reflect the discussions: “Mayor Beale stated we are taking a big chance with this project but it is a chance we have to take. He stated we have gone too far and everyone needs to be on board with this project.”

The mayor then turned to other council members for their views.

Councilman Carl Ferebee “stated from day one he has been behind the project. He stated he does not have enough knowledge about this type of project so he has put a lot of weight on the city manager to make a good sound decision for us.”

Saying he has been supporting the project from “the get-go,” Councilman Ernest Bobbitt “stated this is an opportunity we cannot turn down if the town is going to grow.”

Councilman Jon Baker “stated from the day this was first presented, he has said he was in favor of this project as long as the city captures the profit.”

Councilman Reggie   “told the mayor he is with him all the way … He stated with the profits to be made, we should be paid back within two years.”

But when it came time to vote on approving the Jan. 13, 2005 letter of intent, Bobbitt and Ferebee voted in favor of approval. Baker and Baird voted no. The mayor cast the deciding vote and the motion carried 3-2.

Minutes released from Roanoke Rapids City Council’s closed meeting of Feb. 10, 2005

Editor:s note: These minutes were released to The Daily Herald after numerous requests. This represents the discussion on how the council felt about the theater project in its early stages.

Mayor Beale stated we are taking a big chance with this project but it is a chance we have to take. He stated we have gone too far and everyone needs to be on board with this project. He stated the next formal documents that come before us will need to be signed.  Mayor Beale stated he would like to give all the Council members an opportunity to express their views on this project.

Councilman Ferebee stated his position has not changed. He stated from day one he has been behind the project. He stated he does not have enough knowledge about this type of project so he has put a lot of weight on the City Manager to make good sound decisions for us. He stated he feels a lot better about the fact that we have attorneys on board that can provide us leadership. He stated if the attorneys have any qualms they will be brought to the table. Councilman Ferebee stated he is in.

Councilman Bobbitt stated he is in. He stated he said that from the get-go. He stated he knows this is something new that none of us have ever been involved with, and we will learn as we go. Councilman Bobbitt stated this is an opportunity we cannot turn down if the town is going to grow. He stated we will need the income down the road.

Councilman Baker stated from the day it was first presented, he has said he was in favor of this project as long as the City captures profit.

Councilman Baird told the Mayor that he is with him all the way and has been since the first night before we authorized him to go to Edenton about this project. He stated with the profits to be made, we should be paid back within two years. Councilman Baird stated he has been on the Council longer than anyone here and has seen the shell building given away three times. He stated this project is an opportunity to get “funded well” if we get anywhere close to the income figures that have been quoted.

Mayor Beale pointed out that it has been made clear to us that if there were any further problems, this project was gone.

Motion was made by Councilman Baird and seconded by Councilman Bobbitt to approve the Letter of Intent for this project as signed on Jan. 13, 2005 by all parties involved.

Upon being put to a vote, Councilman Bobbitt and Councilman Ferebee voted in favor of the motion. Councilman Baker and Councilman Baker and Baird voted against the motion.  Mayor Beale voted in favor of the motion thereby breaking the tie vote, and the motion carried by a 3 to 2 vote.

The next installment in this series will appear on Thursday and focus on the City Council’s deliberations and how the taxpayer’s money was spent.