Who approved Discovery Place's $14.7M loan? Former county manager points to commissioners

Former Mecklenburg County Manager Deno Diorio is pushing back on county commissioners who say they did not realize they were approving, two years ago, a roughly $14.7 million loan to Discovery Place for the Charlotte Museum of Nature — which the museum now says it can't repay on time.

In an interview with WFAE, Diorio said the agreement was included in commissioners' agenda materials before they voted to approve it on Jan. 17, 2024. She says that it was their responsibility to understand what they were voting on, despite commissioners this week expressing surprise at the arrangement.

"The document was on the agenda, and they voted for it," Diorio said. "So if they didn't want to do it, they shouldn't have voted for it ... but they voted for it. So I didn't do it. They did it."

Commissioner Elaine Powell was the only member who voted against the agreement. She told WFAE she and other commissioners did not understand at the time that the county was effectively making an unsecured loan to Discovery Place.

“If you've ever seen a consent agenda, if you ever print it out, it's as thick as an old telephone book,” Powell said. "I didn't read through all of the minutiae ... So I did not know. I did not know it was an unsecured loan."

Minutes from the January 2024 meeting show the agreement was approved by a vote of 7-1 with little discussion among commissioners.

The dispute comes as Discovery Place faces an Oct. 27 deadline to repay the county roughly $14.7 million for construction of the new nature museum, located on county-owned land next to Freedom Park.

Discovery Place has told county officials it cannot make the $14.7 million lump sum payment for the building's construction, leaving commissioners to decide whether to place the nonprofit on a modified payment plan or declare Discovery Place in default and take over the mostly-finished building and its unfinished exhibits.

Diorio urged commissioners not to approve additional funds

The project had originally been estimated at $35 million in 2017, with $16 million from the county and $21 million covered by Discovery Place. By December 2023, the projected cost had climbed to more than $62 million.

The loan arrangement grew out of a county commission vote on Dec. 5, 2023, to provide Discovery Place with an additional $10 million for construction of the new museum — which would be owned by the county but operated by Discovery Place.

At that meeting, Discovery Place had asked the county for an additional $20 million because of escalating construction costs, on top of the $16 million already committed by the county.

Diorio told commissioners at the time that she did not support giving the organization any additional funds.

Diorio told WFAE she previously urged Discovery Place CEO Catherine Horne to reduce the project's scope, but said Horne did not want to make additional cuts.

Diorio said she told Horne that the CEO would either need to raise the money herself or persuade a commissioner to put the request before the board. Commissioner Laura Meier ultimately placed the funding request on the agenda.

Commissioners approved the additional $10 million at the December 2023 meeting. But Diorio said the county still needed the full construction funding in place before it could sign contracts with the builders.

"So the county at that point had to front the money in order for us to move forward with the project, because the county commissioners wanted the nature museum to be built," Diorio said.

She said there was "no other way to structure it, because if we didn't have the funding in place, we couldn't have moved forward."

'That's what they said they wanted, and that's what they got'

Diorio said she had concerns about Discovery Place's ability to raise enough money to repay the county, particularly after Discovery Place board member Rich Campbell told commissioners he was unsure where the organization would find the needed $14.7 million.

But Diorio, who retired last year as county manager, said Horne told her she believed Discovery Place could get the money. Horne retired as Discovery Place CEO in April.

Diorio said she is "not overly surprised" that Discovery Place is now unable to pay the county back.

"But at the end of the day, the county commissioners got what they wanted, which was a new nature museum," she said. "That's what they said they wanted, and that's what they got."

Diorio also said the agreement was intentionally structured with a fallback: If Discovery Place fails to repay the county, Mecklenburg can take control of the building and operate the museum itself.

"In my mind it was very clear that if you don't pay, then we're going to take the keys and run it as a nature museum," Diorio said. "My intent was always that we would run it as a nature museum. It's a beautiful facility."

The building was designed with large exhibit spaces and animal habitats — including an owl aviary, a "frog bog" and an outdoor habitat for a family of otters.

County staff have proposed allowing Discovery Place to repay the money over more than 36 years, with annual payments of at least $400,000.

Commissioners have not agreed to that plan and could instead take control of the building and its operations, though they would then have to cover operating costs. The board is expected to decide before the Oct. 27 repayment deadline.