Marino Papazoglou, a Titan America official, sought help from New Hanover County and North Carolina in jumping a potential hurdle for his company.
Titan’s counsel, attorney George W. House, informed Papazoglou in an e-mail dated July 22, 2008, that if a state or county incentive package involved writing a check—which it does—the State Environmental Policy Act, better known as SEPA, would trigger a top-to-bottom review, delaying Titan’s permits until the review could be completed.
House also notified Papazoglou of a loophole: if the state or county authorized a tax credit in lieu of a grant, and the company never pays the taxes to the government, this would not constitute an “expenditure of public funds,” and a SEPA review would be averted.
New Hanover County and the North Carolina Department of Commerce have each approved grants, funded by taxpayer dollars, in a combined amount of $4.5 million.
Papazoglou responded to House’s report by sending an e-mail the same day, marked confidential, to Ken Allen, the economic development representative for the Department of Commerce’s southeast regional office; New Hanover County manager Bruce Shell; and John Merritt, former co-chief of staff in Governor Easley’s administration turned Titan lobbyist.
In the message, Papazoglou posed a question to state and county officials: “Can we change the incentives packages offered by the state and the county to become credits instead of grants? This change will automatically eliminate one of the hurdles,” he said.
“I would also like to hear from Ken and Steve on why we were not made aware of the link between SEPA and incentives in the past and whether you can approach Robin Smith (North Carolina Department of Environment and Natural Resources’ assistant secretary for the environment) and try to help us with this,” Papazoglou said.
Merritt responded, telling Papazoglou that he was placing a call to “Sec. Fain” (presumably, Jim Fain, state commerce secretary during the Easley administration), adding: “Please, no one make any contact on this matter until you hear back from me.”
In the vortex of controversy that has marred Titan’s prospects of building a plant along the banks of the Cape Fear River, opponents have pointed to the actions of Papazoglou and Merritt as evidence that the company willingly admitted a SEPA review should apply to Titan’s proposed project.
Still others may view the actions as mere business, contending that even though Titan was given a pass on the environmental review, no changes to the incentive packages were made, and no evidence exists of any undue political pressure.
While it may seem inappropriate, such an interaction between business interests and government leaders is the bread and butter of lobbyists.
But now opponents have emphasized how dedicated they are in their fight.
A squad of environmental attorneys recently announced it was pulling North Carolina into state superior court, arguing its pass on an environmental review for Titan’s proposed plant violates the law.
The announcement came Wednesday, Dec. 9, that environmental attorney’s representing several New Hanover County organizations have appealed a state ruling that allowed Titan’s plant in Castle Hayne to move forward without a review.
This appeal is a win for Titan opponents, who have been boosted in their arguments recently by pro-bono work from the Southern Environmental Law Center (SELC) and the Duke Environmental Law and Policy Clinic.
Duke represents PenderWatch; while SELC is representing Cape Fear River Watch and the North Carolina Coastal Federation. All these agencies combined have almost 1,000 members, according to the appeal, a 14-page document filed Wednesday against the state’s Department of Administration, which ruled in November that SEPA rules don't apply to Titan.
Jill Lucas, a state spokeswoman, said Thursday, Dec. 10, that the Department of Administration had received the appeal but that it was too early to comment.
A Titan spokesperson could not be reached for comment Thursday.
The Department of Administration argued in its earlier ruling that public monies have not been spent yet, and only when the check is actually cut, will a SEPA review be required.
Opponents argue that conducting an environmental review after the plant is already operational makes no sense.
Environmental attorneys said in the appeal that court of appeals case law indicates the purpose of SEPA “is to require review of a proposed project before public money is spent to advance the project,” the appeal states.
“We hope the ultimate result (of the appeal) is that the state has to take a step back, stop processing permits and do this comprehensive review that we’ve called for the whole time,” said Geoffrey Gisler, acting attorney for SELC. “Comply with the environmental policy act; ultimately, tell the public what it is they’re investing their money in.”
Titan’s grant contracts with the county and state and communications between the company and state officials will serve as fodder in SELC’s arguments before the court, Gisler said.
The North Carolina Division of Air Quality is still mulling over Titan’s air permit, and a decision is not expected until the start of 2010, said division spokesman Tom Mather on Thursday.
Gisler said Wednesday that the appeal process could last for six months, and what impacts the process would have on Titan’s immediate plans will depend on a variety of variables.
In its grant agreements with New Hanover County, Titan is required to obtain all of its permits and create 160 jobs. The county’s grant will be derived from property taxes and other taxes to make seven payments of $600,000 each.
The state will dole out its funding by way of reimbursements for expenses related to Titan’s equipment, repairs and construction, according to the appeal.
A purchase order filed by the department of commerce indicates that the state’s $300,000 in tax payer money has been encumbered, making it unavailable for any other project.
Titan has been an exploding issue since 2008. Opponents of the company’s plans say environmental degradation and negative economic impacts should bar the plant from locating in New Hanover County.
Supporters contend the jobs, the resulting economic development and state’s relationship with the business community are at stake if Titan is stiff-armed.
Michelle Nowlin, supervising attorney for the Duke Environmental Law and Policy Center, is also party to the appeal.
George House, the attorney for Titan, is partner in the law firm of Brooks, Pierce, McLendon, Humphrey and Leonard in Greensboro, N.C.
