The state agency that regulates charitable organizations wants to examine banking records related to an abandoned deal to develop land along the Catawba River for a new York County museum.
Secretary of State Mark Hammond's office has subpoenaed Wells Fargo for all bank records of two corporations created to oversee the development of land along the Catawba River near Interstate 77 and Sutton Road in Fort Mill.
Jane Spratt McColl, wife of retired Charlotte banking executive Hugh McColl and sister of former U.S. Rep. John Spratt, D-S.C., donated nearly 400 acres to the Culture and Heritage Foundation more than a decade ago. She said she wanted the land to be used for green space and as the site for a new museum.
The foundation, which raises money for York County's Culture and Heritage Museums, then launched a plan to develop a majority of the land into an eco-friendly, mixed-use community. Proceeds from the sale of real estate would pay for a new museum nearby on the river, project leaders thought.
To develop the property, the foundation created a development arm called Sustainable Development Group (SDG) to manage the land. The group then sold 54 percent control of the land to a North Carolina-based development partner with international reach and the "deep pockets" needed to see the plan through, project leaders have said.
The deal fell through in 2008, leaving the foundation and SDG owing $3.78 million to the partner when it left the deal. Of that debt, about $1 million remains, foundation leaders have said.
An official from the Secretary of State's office said the inquiry into the foundation was prompted by complaints. The inquiry is not an official investigation; it is an attempt to get more information, the official said, declining further comment.
The subpoena issued Friday is for two corporations involved in the development plan:
Cherokee SDG - the limited liability corporation formed to manage the development. The foundation's development arm owned 46 percent interest in the company; its development partner owned 54 percent.
SDG Properties - the name Cherokee SDG was changed to after the development partner left the deal and agreed to sign over its 54 percent interest in exchange for the promise of $3.78 million.
Museum foundation chairman Bill Easley and SDG chairwoman Jane Peeples declined to comment on the subpoena Tuesday.
Gary Williams, foundation member and land manager for SDG, said he hadn't heard about the subpoena and also declined to comment on it.
The Secretary of State's inquiry follows similar attempts by The Herald and the York County Council to get detailed financial histories related to the development project, after museum and county leaders raised questions about it.
In response to a state Freedom of Information Act request, the foundation and SDG provided several documents to The Herald, including financial audit reports for the foundation and one for Cherokee SDG dated December 2006.
The materials did not include accounting ledgers, profit/loss statements, or bank statements, as requested.
The materials provided to The Herald are "all we have," Williams said Tuesday. Any specific transactions related to the land development project would have to come from the development partner who owned majority interest in the plan, he said.
In March, the County Council asked the foundation to submit to an independent audit of its books. The foundation agreed, but the audit hasn't happened yet.
York County Council Chairman Britt Blackwell said Tuesday he doesn't want to interfere with anything the state is doing.
State Rep. Ralph Norman, R-Rock Hill, joined the voices calling for the foundation to reveal details about the land deal, followed by other members of York County's legislative delegation.
But some County Council members opposed the plan to pursue an audit of the foundation's books, arguing that because the foundation's deal involved no taxpayers' dollars, the county has no right getting involved.
Last year, when foundation leaders announced they owed a debt on the land, they held a series of meetings with museum and county leaders to inform them about the land deal. They provided summaries of the land and financial transactions related to the development deal.