James Mitchell won a seat on the Charlotte City Council during Tuesday’s election, but there’s still uncertainty about his connection to a construction company that’s been contracted by the city of Charlotte to tackle several major projects.
Mitchell had previously served on the Charlotte City Council, but he resigned his position in January 2021 to accept the job as president of RJ Leeper. Months later, he left RJ Leeper, but he stated that he still maintained a 25% stake in the company.
The 25 percent figure is important. State law bans cities from doing business with a company if an elected official owns 10 percent or more of it. Mitchell’s presence on council would put projects like the airport lobby renovations at risk, due to Leeper Construction’s involvement.
If you ask RJ Leeper, there’s nothing to worry about. Interim Chief Operating Officer Lorie Spratley told Channel 9 that Mitchell doesn’t own what he says he does, and projects won’t be impacted.
Bright Hope Capital, the investment firm that owns RJ Leeper, says that in December 2020, the firm lent Mitchell $375,000 secured by his equity in the company. It’s not clear what the money was used for, but after Mitchell left the company, Bright Hope Capital sent a letter to Mitchell in December 2021 asking for the money back plus interest. The letter said Mitchell had five days to repay the loan, otherwise Bright Hope Capital would “pursue its rights and remedies under the demand note ... including foreclosing on [his] member equity.” The documents were first reported in May by Channel 9′s news partner, the Charlotte Business Journal.
In January 2022, Bright Hope Capital sent a notice of default and said Mitchell failed to repay the loan. On March 1, the firm sent a letter citing state law saying they’ll reclaim Mitchell’s 25% ownership in RJ Leeper to cover the debt if it wasn’t paid within five days. Weeks later on March 22, another letter was sent to Mitchell saying they never heard objection from him, and he is deemed to have consented to it.
Mitchell told Channel 9 he disputes their version of events, saying he still owns 25% of RJ Leeper.
After his win on Tuesday, Mitchell told Channel 9 that he will sell part of his ownership to get under 10 percent.
“Today, I can start moving on and start selling the RJ Leeper stock that I own to get below the state threshold,” Mitchell said.
Mitchell told Channel 9 that his legal team is meeting to discuss the next steps, but his attorney declined to comment, citing anticipated litigation.
Mitchell maintains that he has ownership in the company but will sell the necessary stake to comply with state law and not jeopardize city work.
“RJ Leeper is a great company, they do great work in Charlotte, so I am going to comply with the state rules,” Mitchell said.
The city of Charlotte declined to comment on the dispute.
(WATCH BELOW: Channel 9′s Joe Bruno sits down with James Mitchell, running for Charlotte city council at-large)