GOP candidate for governor made property deals with college while on trustees board

When Catawba College, a private school in Salisbury, added another small residence hall, it did not have to look far to find a suitable building.

It acquired the building from a member of its own board of trustees.

The trustee, Bill Graham, has bought three properties from the college while serving on its board, including two he received in the land exchange that left the college with the new residence hall. Graham has been on his alma mater’s board for six years. He graduated from Catawba College in 1983.

Now running for the Republican nomination for governor, Graham is explaining the deals, saying they were all intended to benefit the college and community. His campaign says he’s giving income from the rental properties to the college. And the college says he did not vote on the land deals.

Graham is funding his own campaign with $5 million and already launched a statewide TV and digital advertising campaign. A trial lawyer with the firm Wallace & Graham, he is also a businessman and former Jesse Helms staffer. He owns more than a dozen properties in Salisbury, including his home and several other houses near the Catawba College campus.

He shook up the field when he entered the race in October 2023. No other candidates for governor have launched statewide TV advertisements.

Running for the highest elected office in North Carolina state government brings attention to candidates’ business dealings.

Graham campaign says deals benefit Catawba College

Jane Pinsky, director of the North Carolina Coalition for Lobbying & Government Reform, said that while Catawba College is a private school, doing real estate deals while serving on the board “doesn’t look good.”

“You might expect a graduate of a college to be gifting land to the college, rather than doing a land exchange. ... Particularly somebody who has enough money that they can lend their campaign $5 million,” Pinsky told The News & Observer.

Graham’s campaign described the property acquisitions as benefiting the college, with all turned into rental housing for students, with rent income going to the college.

“As he has done in countless other aspects of his life, Mr. Graham took action to benefit his community rather than himself,” said Alex Baltzegar, Graham’s campaign manager.

“Through transparent and legally appropriate processes, Mr. Graham created more options for student housing, and ensured any resulting income went back to Catawba College,” Baltzegar said in an emailed statement.

He called it “a great example of why Bill Graham is an exemplary leader in his community and would be a transformational Republican governor.”

Pinsky questioned that, if Graham is giving the rent money to Catawba College, “Why didn’t he just donate the building?”

She said he could sell the properties in the future.

“There’s no difference than a contribution that any of us make to a place we went to college. In a sense that’s good, but it seems a little complicated to me,” she said.

In addition to the swap, Graham bought a house in a residential area directly south of the campus from Catawba College in 2021.

The campaign for governor

Western Carolina University political science professor Chris Cooper said questions about Graham’s properties is “a signal that the stakes are higher now on every decision that he’s made.”

“And he’s not running a quiet campaign. He’s somebody who’s put millions of dollars in his campaign. He’s hired the most prominent political consultants in the state of North Carolina, at least on the Republican side. ... He went from featherweight boxing to MMA, and I think this is an example where he’s going to take a few punches whether they’re fair or not,” Cooper said.

Graham’s opponents in the Republican primary are State Treasurer Dale Folwell, Lt. Gov. Mark Robinson and former state Sen. Andy Wells. On the Democratic side, the primary front-runner is Attorney General Josh Stein, who is running against recently retired N.C. Supreme Court Justice Mike Morgan.

Graham also ran for governor in the Republican primary against Pat McCrory in 2008. McCrory won the primary but lost the general election that year to former Democratic Gov. Bev Perdue.

Property values in Salisbury

Cooper said that Graham serving as a trustee at a private college means it’s “fundamentally different” than if Graham was on the board of trustees at at public college like the UNC System. UNC colleges are funded with taxpayer money, and many of the people on their boards are appointed directly by the General Assembly.

“Clearly, private schools have a lot fewer regulations; the bureaucracy is a lot smaller in private schools,” Cooper said. “I think this is a fundamentally different kind of question than one if you were dealing in state property.”

Cooper said that because Catawba College controls who serves on its boards, so as with any private transaction, the college can essentially do what it wants.

While serving on the board, Graham has bought three properties from them and sold them one, all in a residential area directly south of the college.

On Oct. 5, 2018, Catawba College gave Graham property at 2113 Yost St., for, according to Rowan County property records, a sale of zero dollars. It had been sold to Catawba College in 2004 for $103,000. According to Zillow, the modest single-family home built in 1955 is worth $216,000, with the county assessing its value in 2023 as about $201,000. About $2,400 in property taxes are due in 2023.

Another property, 602 Lantz Ave., was sold to Graham for zero dollars from Catawba College on Oct. 5, 2018. That property, also a modest home, is assessed in 2023 at $262,000, nearly double its assessed value of $132,000 in 2018.

Graham’s campaign did not say exactly how much money from student renters he gives the college.

The college described the property sales in 2018 for zero dollars as a land exchange. Rowan County property records show that Graham sold a house for zero dollars near the campus to Catawba College that has been turned into a small residence hall. Now known as Catawba Hall, the building is at 1918 W. Innes St. in Salisbury. Zillow estimates the value at $367,000, while the county assesses its current tax value as $323,000.

In IRS terms, a “1031 exchange” refers to Section 1031 of the Internal Revenue Code, which allows real estate property swaps if not for personal use, and defers some federal taxes. A spokesperson for the college said the property exchange complied with the code.

A third property, the one Graham bought from the college in 2021, is at 141 E. Corriher Ave. Its assessed value in 2022 was about $228,000, and much less, at about $124,000, when Graham bought it for $45,000, according to Rowan County property records.

Graham owns many houses, including his longtime home valued at $3.2 million in Salisbury, where he’s registered to vote. He also owns a million-dollar home in Florida. The other properties are largely homes a middle-income family could afford.

Catawba College says exchange was ‘equal value’

Catawba College says the properties exchanged in 2018 were “deemed of equal value.”

“Our records indicate that Catawba College and Bill Graham exchanged properties to the other. Each recognized and agreed the properties were of equal value and were of like kind,” said Catawba College spokesperson Jodi Bailey in an email to The N&O.

Bailey did not provide the board’s meeting minutes, but said they “did not reflect the conversation around the exchange” in 2018. She did not elaborate on the 2021 property sale to Graham.

According to U.S. Census data, the median value of housing occupied by owners in Rowan County, as of 2021, is $155,700. The county has a 70% owner-occupied rate.

Pinsky, of the Coalition for Lobbying and Government Reform, said property exchanges while a trustee, if Graham was at a public school, “would absolutely be questionable. Because it’s a private school, it’s hard to determine. It’s just not something that looks good.”

Pinsky said that people who are running for office “have to answer to a slightly higher standard.”