Former Smithfield Foods Chairman Joseph Luter III is offering up to $6 million for the beautification of Main Street’s intersection with Route 10, where his son is developing the 267-home Grange at 10Main mixed-use development. 

The elder Luter’s donation is conditioned on the town’s farmers market being relocated to the Grange and town taxpayers matching the gift dollar for dollar.

The proposal is summarized in documents obtained by The Smithfield Times.

Luter III – through his son, Grange developer Joseph Luter IV – had previously offered $1 million and land in 2022 for moving the town’s farmers market to the site, contingent on the town and Isle of Wight County each committing up to $1.4 million of local funds, which both governing boards agreed to contribute in October of that year.

According to Smithfield Mayor Steve Bowman, the additional $6 million and town match will fund “only the brick perimeter wall that will be placed along the right-of-way as well as the streetscape that welcomes citizens to Smithfield and the sidewalk that is also on the front perimeter.”

“There was never any request from Mr. Luter to spend any funds on the Grange,” Bowman said.

Bowman, according to correspondence he sent council members last week, flew at his own expense to Palm Beach, Florida, on May 22 for a two-day stay at Luter III’s home, during which Luter made the offer. According to a May 29 letter from Bowman to Luter III, it is “understood that the Town of Smithfield will match dollar for dollar your donation,” and put the money toward four priorities of Luter III: co-locating the farmers market within the Grange, adding a streetscape with trees and signage in the vicinity of the 57-acre Grange site, extending brick sidewalks to the Grange and facilitating parking at the Grange for Main Street Baptist Church, located across Main Street from the site.

“It is further understood that should the Town decide not to allocate the entire $6 million, the amount that we choose not to match will be subtracted from your donation and that amount will be refunded to your wife, Mrs. Karin Luter,” Bowman’s letter states, noting that “once the above projects are accomplished, we are free to utilize the remaining funds for the overall betterment of the Town, but your preference is that we work to complete, as much as practicable, the master plan at the Joseph W. Luter Jr. sports complex.”

“Once these projects were completed, the Town is free to spend the funds on the betterment of Smithfield on a 50/50 cost share with a preference that the Town give significant consideration to completing the master plan at Luter Sports Park,” Bowman said. “However, that was not a mandate nor a condition placed on the funds.”

Bowman’s correspondence with the council states he’s been friends with Luter III since 1988, that Bowman paid for his own airline ticket and that “not a cent of Town money was expended during this trip.” The Grange “was not on the discussion agenda” until Luter III brought it up.

“I can assure you I did not ask in any way for a cent,” Bowman wrote. “This was spontaneous and a surprise to me.”

Bowman told the council the proposed donation would be discussed in open session at the council’s June 4 meeting.

“I want this entire encounter to be open with no innuendo of any impropriety,” Bowman’s communique states.

The first $1 million of Luter III’s money has already been deposited in the town’s account, according to Bowman.

“Mr. Luter insisted that the money be transferred forthwith,” Bowman wrote. “The letter I sent outlines that I am fully aware (and so is he) that the Council will have the final say on any arrangement.”

Bowman told the Times the town’s match could come from reserve funds or be borrowed. According to Town Manager Michael Stallings, Smithfield has roughly $9 million, or nearly 100% of its annual budget, on hand in its unassigned fund balance – an amount far in excess of the typical 20% municipalities try to keep on hand in reserve.

Bowman emphasized that the council has the option of matching a lower amount than $6 million, and returning the unmatched amount to Luter III, or voting not to commit any taxpayer money and to instead return the entire $6 million donation.

“I truly believe that our citizens should have significant input on how these funds are spent and how much,” Bowman said, adding that, as mayor, he’s prohibited by the town’s bylaws from making a motion, so any proposal to accept or return Luter III’s donation would have to come from one of the six other council members.

Four of the council’s seven seats will be on the ballot this November, making it possible that one or more new members who take office in January could propose rescinding the town’s 2022 and potential 2024 financial commitments.

Luter IV, in April 2023, told the Planning Commission he may seek “reimbursement” for costs associated with “public” infrastructure components of the Grange.

“I do not consider this as infrastructure for the Grange,” Bowman said of Luter III’s latest proposal. “I have always spoken against providing public funds for any infrastructure for any development. This entrance corridor would be owned by the Town and placed on Town right-of-way. The Town would bid the job and the Town would compensate the contractor. No funds would be given to the developer.”

Bowman added there “has been no discussion by Council to pay for infrastructure” to date and that he “would strongly advocate against such a move.”

“None of the GIFT he has given to the Town goes to the Farmer’s Market,” Bowman wrote on Facebook, stating the $1.4 million approved in 2022 is “THE ONLY FUNDING CURRENTLY assigned to the market project.”

A 2022 fiscal impact study by Ted Figura Consulting for LSMP LLC, Luter IV’s holding company for the Grange, had estimated a $7.8 million cost for the market, whose plans at that time showed a brick building with 24 vendor stalls, each with a glass garage door to easily enclose the space in the winter. A scaled-down version presented Dec. 5 when the council voted 3-2 to approve mixed-use zoning for the Grange showed a covered outdoor pavilion with brick columns in between 2,550 square feet of indoor retail space and a 7,350-square-foot restaurant.

The 2022 Figura study had estimated, contingent on “a timely rezoning approval,” that the market building could have opened at its new location this spring. An updated analysis by Figura dated June 3 of last year estimated construction at the Grange beginning in “the second quarter of 2024 after sitework is completed,” though a final version of Figura’s estimates, provided to the town’s Planning Commission a month ahead of the Dec. 5 vote, did not include an updated estimate for when the market would break ground.

Judy Winslow, director of Smithfield’s and Isle of Wight’s shared tourism department, said she had no update as of May 30 on a start date for the market’s construction.

Editor’s Note: This story was updated on June 3 at 11:14 a.m. with additional comments by Smithfield Mayor Steve Bowman.