NC councilman resigned so he could accept $3M in tax money. Then he rejoined the council

A longtime Kannapolis City Council member resigned in December so he could avoid a conflict of interest and accept $3 million in federal tax money. But a month later, he’s back on the job.

Tom Kincaid’s surprise reappointment last week drew criticism from three of his colleagues, who are raising concerns about ethics, an “attempt for power” and how the city can move forward from an episode that’s divided a council once united around efforts to transform the former mill town into a thriving Charlotte suburb. The reappointment was possible, two of the council members said, only because council member Doug Wilson, who would’ve voted “no,” was sick and absent from the meeting.

Kincaid, who first joined the Kannapolis City Council in 2010, resigned last month under pressure from council members who said accepting $3 million in American Rescue Plan Act money could be a conflict of interest — even if it passed through Cooperative Christian Ministry first. The Concord-based nonprofit bought Kincaid’s nursing home to turn it into transitional housing.

Kincaid resigned Dec. 11, and the council voted at the same meeting to give Cooperative Christian Ministry the $3 million. It put him back on the council less than one month later.

For others on the council, member Ryan Dayvault said, there’s not a legal issue because Kannapolis gave $3 million to the nonprofit, not directly to Kincaid.

“But that was the whole purpose of giving the money, to buy that facility,” Dayvault told The Charlotte Observer.

Wilson said the council’s actions aren’t illegal, but that it was “handled inappropriately.”

“If we as a council pass something that ends up with one of the council members receiving a sum of money, something about that feels like a conflict of interest,” Wilson told the Observer.

Kincaid, Mayor Darrell Hinnant and councilman Darrell Jackson, who made a motion to reappoint Kincaid, didn’t respond to multiple requests for comment. Efforts to reach councilwoman Jeanne Dixon were unsuccessful.

What is the transitional housing project?

Ed Hosack, CEO of Cooperative Christian Ministry told the Observer a previous chair of the nonprofit’s board asked Kincaid years ago to “consider CCM” when he decided to retire so the nonprofit could use Caremoor Retirement Center “for the benefit of the community.” The Kincaids owned the property off of Kannapolis Parkway from 1992 until they sold it last month, according to Cabarrus County property records.

The Salisbury Post reported last month the total purchase price was $5.25 million, including the $3 million in federal relief money. Kannapolis said in a December staff report using $3 million in American Rescue Plan Act funding for the grant was OK because the city claimed a “standard allowance” for revenue replacement.

A resolution approved by the Kannapolis council in December said the city and Cooperative Christian Ministry “continually discussed” opportunities for transitional housing in Kannapolis. They ruled out sites on North Main Street and Pine Street for reasons not described in the resolution.

Hosack said Cooperative Christian Ministry matched the Kincaids’ preference to keep the center’s ownership local instead of selling to a national company. It “felt good in terms of legacy,” Hosack said.

The Kannapolis resolution describes the retirement center as “suitably located to serve the Kannapolis community.” The related contract tells Cooperative Christian Ministry the $3 million it received should “be used exclusively” to purchase Caremoor Retirement Center, which contains four buildings on 5.36 acres.

The nonprofit will continue to operate Caremoor as a retirement home and a facility called Grace Place, which will house seniors and mothers with children. Kannapolis drove that solution by encouraging the nonprofit to add space for mothers with children into a plan pitched in 2022, Hosack recalled.

The grant agreement between Kannapolis and the nonprofit requires 75% of current spaces to become transitional housing within five years, space for 15 families with children in the same time and the facility to operate for at least 10 years.

Kannapolis City Council controversy

Councilwoman Dianne Berry said she first learned about Kincaid’s involvement in the project during a closed session meeting in October. Kincaid recused himself from the discussion and left the room, Berry recalled.

A Kannapolis city spokesperson didn’t respond to several emailed questions, including about the October closed session.

Berry, who voted against the $3 million grant, raised questions about whether Kincaid used nonpublic information gained as a council member to make the deal with Cooperative Christian Ministry.

Wilson and Dayvault said they’d vote for the $3 million grant if Kincaid resigned, Queen City News reported. Kincaid agreed to step down and wrote a resignation letter on Dec. 7.

“I wish each of you the very best for your future leadership and continued success,” Kincaid wrote.

His resignation was forced by the work of a political trio with motivations beyond ethical concerns, Mayor Hinnant told Queen City News in December. Hinnant acknowledged at the time a replacement would be difficult to find because of a three-to-three split and that he thought the seat would remain empty until the 2025 election.

The calculus changed when council members learned Wilson would be absent for last week’s meeting, Berry said. Four council members and the mayor were present. Only two of the five, Berry and Dayvault, voted “no.”

Wilson told the Observer he would’ve voted against Kincaid’s reappointment — making the vote a three-to-three tie.

“I just find it distasteful,” Wilson said.

Kincaid said the resignation “really took a toll” and asked whether it mattered how he resigned and rejoined the council, the Salisbury Post reported.

“It’s politics and sometimes you hate to have to play politics, but you have to do what you have to do,” the Post quoted Wilson saying during the meeting.

Berry’s reaction: “We have a good qualified council, but we let this attempt for power or whatever we wanted override what we were thinking.”

Is it illegal?

Regardless of council concerns, the way Kannapolis handled the $3 million grant appears legal.

UNC School of Government professor Robert P. Joyce said state law stipulates that public officials “can’t be on both sides of a contract.”

“No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law,” says N.C. General Statute 14-234 (a) (1).

An intermediary like Cooperative Christian Ministry may be OK, but Kincaid’s resignation “cures the problem” entirely Joyce said. Kincaid wasn’t a council member at the time Kannapolis approved the $3 million grant and he rejoined the council after the deal closed.

Hosack, of Cooperative Christian Ministry, said Kincaid handled the disclosure appropriately, that some Kannapolis council members were “trying to be extremely cautious” and that he’s hopeful the members will reconcile their differences “for the good of the city.”

What’s next?

For years, Kannapolis City Council members united around turning remnants of a massive textile mill into a thriving downtown. The city purchased land and buildings in its downtown, rebuilt streets, paid for a new Minor League Baseball stadium there and attracted retail businesses into previously vacant buildings.

Dayvault says he wants to move on from the Kincaid controversy, but he also doesn’t want people to “think I’m ready to forget about it all.”

Berry and Wilson are more resolute.

“I don’t know how you just put something like this behind you and think it’s OK if you felt strong enough to take a position,” Wilson said. “I don’t know where we’re at now.”

Wilson said he would’ve preferred if Kincaid remained off of the Kannapolis City Council until the next election instead of being reappointed one month later.

“I don’t even think an apology would work right now,” Berry said.