A Gazette reader wanted to know if the Wireless Research Center of North Carolina is repaying the money it borrowed when it was getting started in 2010 and 2011. The answer is yes.
The Town of Wake Forest made a line of credit available to the Center, an amount that grew to $975,000 although the Center only borrowed $948,950. In addition, the town gave the center a grant of $308,000. All this financial information was provided by Wake Forest Chief Financial Officer Aileen Staples.
The loan and the grant were to cover the startup operating expenses. The terms of the loan were renegotiated in 2016 and are a 2.5 percent interest rate and a 10-year balloon payment with a 20-year amortization.
The Center pays the town $4,750 a month — $57,000 each year – and now owes, as of June 30, $710,652.
The loan and grant funds came from the town’s Futures Fund which was set up after the Industrial Development Commission sold the old Schrader/Parker-Hannifin site on Wake Union Church Road, for $2.9 million to Jim Adams’s St. Ives 220 Commercial LLC in 2006.
After its expenses, the IDC donated $2,205,469.75 to the town in August of 2008. The IDC was then dissolved by the town commissioners. The town board decided the money would go into the Futures Fund for economic development.
Staples said the current Futures Fund fund balance is $1,497,187.48. There has been an internal loan within the town for $500,000 to purchase the former SunTrust building, and it will be repaid by 2025.
Why was there an Industrial Development Commission and why did the town own the Schrader/Parker-Hannifin site?
The Wake Forest economy went into a tailspin in 1956 when Wake Forest College, its desks, most of its faculty and all its students moved to the new Winston-Salem campus, lured by Reynolds family tobacco money. Wake Forest had grown up as a college town, and the students were the linchpin, putting money into the soda shops, the restaurants, the boarding houses, the pool halls and clothing shops on and near White Street. Another factor was the relocation in 1954 of U.S. 1, which was turned into a bypass after years of going through the center of town. The Census of 1950 counted a new high of 3,704 residents; In 1960 that figure was 2,664, a 28 percent change. The town fathers had already begun a search for industry, anything that would put money in Wake Forest pockets and its economy. In 1964 Schrader Bros. agreed to relocate to Wake Forest.
The town board established the Industrial Development Corporation and charged it with floating the bonds to purchase 33 acres of the former Jenkins farm from Josephine H. Holding and then building the manufacturing plant that was leased to first Schrader Bros. and then all the subsequent owners as companies were bought and sold. Because of death or resignation there were only two IDC board members left in 2008, John Wooten Jr. and John Rich.
Schrader paid off the 20-year bonds in 1984 and the IDC board offered the property to the town, but the town commissioners refused the deed, preferring to receive the property tax revenue.
The IDC therefore continued to own the land and plant and lease it to Schrader and then Parker-Hannifin for $1,000 a month while the company paid all taxes, insurance and maintenance. The lease was for 40 years, renewable annually.
Beginning in 1986, the IDC contributed $10,000 a year toward downtown revitalization and economic development efforts by the Wake Forest Chamber of Commerce and the Downtown Revitalization Corporation. The town board authorized the payments before they were distributed.
After Parker-Hannifin closed most of its operations early in 2002, the IDC board stopped the contributions to build a nest-egg against any possible legal costs as the property was sold.
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2 Responses
Are you kidding me? That guy used town money to get wealthy and buy a fancy house and still owes the town almost a million dollars?!?! And wants MORE? Are y’all insane?
The wireless center brings in millions to the Wake Forest economy every year so the town has benefited far more than “that guy.”
Over 60 new businesses over the years have grown out of that wireless center and contributed millions in tax base, employed hundreds of people and is now redeveloping an old, dilapidated building into another economic development project for the town that will again return unknown benefits in tax base, LOCAL jobs and training for students including internships for students in town, just like the original location has done.
Partnerships with big time tech companies and the only Satimo Chamber between Georgia Tech and Ohio State. In addition, because it is run by a non-profit, defense contractors love it and share patent credit with the center every time one is created out of the facility.
Here is a link to learn more: https://wrc-nc.org/about-wrc/
It is a great deal for the town because it gives tech entrepreneurs a location to partner with other companies and pool some of the most talented minds in the area to work on amazing new projects.
The money is not town money and was not a result of taxpayers contributing it. It is all private funds given to the town specifically for use for economic development. In other words, it is not taxpayer money or the town’s money. The town has just been tasked with managing it.