QUESTION: Why didn’t Mebane councilmember Katie Burkholder recuse herself from the vote on a newly-approved apartment project whose site is part of the portfolio of the real estate agent who owns the realty company she works for?
ANSWER: To vote or not to vote – that is the question which confronted Mebane councilmember Katie Burkholder last week when a Greensboro developer asked for permission to set up 140 apartments on land that a local parochial school owns along NC 119.
Burkholder ultimately made the motion for a 2-to-1 vote that will enable Brown Investment Properties to erect the proposed apartments on 14.7 acres that Bradford Academy owns near NC 119’s juncture with Kimrey Road.
This narrow decision took place last Monday over stiff opposition from residents of Summerhaven, a single-family subdivision that’s situated near the site of the proposed apartments. It also occurred despite the exclusion of two council members – namely Mebane’s mayor pro Tim Bradley, who was recovering from surgery and therefore absent from the council’s meeting last Monday, and councilman Jonathan White, who was allowed to recuse himself due to membership on Bradford Academy’s board of directors.
Since last Monday’s vote, some of the project’s opponents have taken Burkholder to task for not following White’s example and abstaining from the decision. A real estate agent by trade, Burkholder is currently affiliated with the RE/MAX Diamond Realty, whose co-owner, Ken Walker, has served as the listing agent for Bradford Academy’s 14.7-acre site. Burkholder made no mention of her connection to Walker’s agency before last Monday’s decision, and her failure to do so has become grist for much of the online criticism that has flourished in the wake of the vote.
Burkholder insists that there was nothing untoward about her participation in the decision – notwithstanding some of the claims that her detractors have posted to various social media.
“One of the most important things you can do as a council member is vote,” Burkholder recalled in a phone conversation on Wednesday. “The North Carolina General Assembly has very clear rules about your duty to vote as a council member… Before I even ran for city council, I spoke with [Mebane’s city attorney] Lawson [Brown] and Chris [Rollins], who was our city manager at the time. I talked to them about my role as a realtor, What was explained to me at the time is that you can’t go off of future possible interest. It’s only if you have a direct financial interest on something in that moment that you don’t have to vote.”
Burkholder added that people who’ve chided her for joining last Monday’s vote may not fully understand the relationship she, as a real estate agent, has with the RE/MAX Diamond Reality or its co-owner.
“I am not a W2 employee. I’m a 1099 employee,” she elaborated. “Ken is the owner of RE/MAX Diamond Reality with his son John. They manage the RE/MAX label for us. However, the agents sign on to be part of a brokerage. We pay into the firm to offset its costs, and my broker in charge is Mickey Tripp.”
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Burkholder added that Ken Walker specializes in commercial real estate deals, while she has no role in the sale of commercial property. She also contrasted her own role with Jonathan White’s position as a board member for Bradford Academy, which she said prompted the fellow councilmember’s recusal since, as a board member, “he functions as an owner of the school.”
All that, Burkholder said, adds up to her complete lack of any financial stake in the outcome of last Monday’s vote – a conclusion that she said has been vouchsafed by Mebane’s city attorney Lawson Brown.
“I talk to our attorney often,” she noted, “and he was well aware that Ken was representing Bradford Academy as their realtor. One of the things Lawson and I talked about when I signed onto the city council is whether I do commercial real estate. I do not practice commercial real estate, and he told me that while I’m on the council, I should probably not do that…So, it’s clear in talking to our attorney that I don’t profit in any way from commercial transactions [handled by RE/MAX].”
Brown, for his part, was quick to back up Burkholder’s assertions when reached for a comment about this matter on Wednesday.
“She did not have a personal pecuniary interest in it,” the city attorney said. “She is an independent contractor. So, I deemed it to not be a conflict.”
Brown went on to note that there’s no legal imperative for a councilmember to sit out a vote merely because they happen to know someone embroiled in an issue before the council. He insisted that there’s no need for a councilmember to even acknowledge such a connection in public.
“It’s not a requirement,” he added, “and in a small community, I think it would be ill advised for every council member to disclose their personal or professional relationships to applicants and opponents to applicants unless there’s an actual conflict.”
A different approach has nevertheless become de rigueur in the city of Burlington, where every council meeting begins with a formal cue from the city clerk for members of the council to disclose any real or potential conflict of interest they may have over an item on the agenda. In some cases, members of Burlington’s city council use this opportunity to reveal non-pecuniary connections to certain items – which generally prompts a public acknowledgement from city attorney David Huffman that they’re legally obliged to vote on the issue.
Brown admits that this practice in Burlington left him scratching his head when it was enacted some years ago at the behest of Burlington councilman Bob Ward, who had served as Burlington’s city attorney before his elevation to the council and now serves as one of the city attorneys for Graham.
In addition to his own role as Mebane’s city attorney, Brown is also a well-established real estate lawyer with the Burlington-based Vernon Law Firm, and in this capacity, he has made frequent appearances before the elected officials in Burlington. Brown added that his familiarity with the policies of Burlington’s city council has given him plenty of time to absorb the city’s idiosyncratic stance on the disclosure of conflicts.
“I talked to Mr. Huffman about it, and he said that this was coming from Mr. Ward’s participation in some state agency,” he recalled. “Burlington is the only jurisdiction where I’ve heard the clerk state that at the outset of a meeting…and I have not from my recollection ever told anybody [on Mebane’s city council] that they need to put something in the record if it is not a true conflict.”
Burkholder, however, concedes that she isn’t entirely opposed to disclosing personal connections to issues that don’t necessarily rise to the level of actual conflicts of interest under state law.
“Although I don’t have a duty to do it, according to our city attorney,” she said, “Given the amount of community frustration [over last Monday’s vote], in hindsight, I think I should’ve had taken an opportunity to do that…That’s not something I had thought of. But I love the suggestion, and it’s something I will likely discuss with the mayor, the attorney, and the manager…I don’t want it to be something where people don’t think I’m transparent.”
Burkholder added that she already has plans to bow out of a hearing on another, unrelated item that’s scheduled to come before Mebane’s city council.
This rezoning request, which went before Mebane’s municipal planning board earlier this week [see separate story this edition], would allow the conversion of the former Kingsdown Mattress factory site in downtown Mebane into a collection of townhomes. Burkholder said that the project’s developer has agreed to engage her as the listing agent for the townhomes should they get a nod of approval from Mebane’s city council, which is expected to take up the matter on Monday.
“I have already informed our city attorney and our city manager, and I sent an email to my fellow council members before the planning board meeting,” she added. “So in the [city council] meeting, I will be asking for their permission for recusal because that is a tangible direct financial benefit to me.”
On this point, Burkholder gets no objections from Mebane’s city attorney.
“That’s a personal pecuniary interest,” Brown said, “because if it passes, she’ll be making a commission if those units sell.”
In a separate interview, Mebane mayor Ed Hooks stressed that he relies on Brown’s judgment and recommendations to council members. (Hooks doesn’t vote except in cases of ties.)
Acknowledging that he’d heard much about the social media debate and criticism surrounding Burkholder’s vote on the apartment complex, he stressed that there are “ethical, legal, and perception” issues often surrounding council issues and votes. He said he felt that much about this situation concerns perceptions among Mebane residents, some of whom may have formed opinions without knowing the full context of Burkholder’s participation.
In hindsight, Hooks said perhaps Burkholder should have at least publicly acknowledged her connection with another person at the same real estate firm where she works, while explaining – or allowing Brown to explain – why it didn’t rise to a prohibited conflict of interest.
Hooks said he knew ahead of time that Brown had cleared Burkholder to participate in last week’s rezoning discussion and vote, which proved to be all the more necessary inasmuch as a bare three-member quorum of the five-member council decided the issue. Hooks said, quite frankly, he’s not sure White should have recused himself from the vote, since Hooks said he failed to see a direct financial interest arising from his participation, but stressed he defers to city attorney Brown in such matters.
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