A month after narrowly rejecting a similar proposal, Smithfield’s Town Council voted 5-2 on March 4 to approve a revised plan to partially forgive the debt the Smithfield Recreation Association owes the town.

Councilman Steve Bowman proposed in February to take $60,000 from the interest former Smithfield Foods Chairman Joseph Luter III’s conditional $6 million donation had earned last year during the six months it sat in the town’s bank account and use it to write off half the $120,000 remainder the SRA owes as its share of the $4 million Joseph Luter Jr. Sports Complex the town built in 2018, which is named for Luter III’s father. 

After that motion failed 4-3, he brought the matter up again at the council’s March 4 meeting, this time proposing to renegotiate the SRA’s debt repayment without using any of the interest money. Mayor Mike Smith, Vice Mayor Bill Harris and Councilmen Jeff Brooks and Darren Cutler joined Bowman in supporting the revised proposal. Councilwomen Valerie Butler and Mary Ellen Bebermeyer cast the dissenting votes.

Per the terms of the revised repayment agreement, the SRA will owe $15,000 instead of $30,000 annually for a total of $60,000 through 2028. The additional $60,000 the SRA would have owed under the 2018 agreement is now forgiven.

SRA, which runs baseball and softball programs for children ages 5-16, owns and maintains the 55-year-old, 6-3-acre Beale Park at the corner of Moonfield and Barcroft drives. It had planned to sell Beale for $300,000 in 2018 to meet its then-$300,000 financial obligation toward the Luter Sports Complex, but after receiving pushback from its membership, negotiated to make the $300,000 payment in annual installments over 10 years.

In addition to the annual $30,000 payments the SRA has made over the past six years, it pays $25,000 annually to lease the Luter Sports Complex. Derek Joyner, an SRA board member, told the council at its Feb. 24 committee meetings that SRA has a combined enrollment of 543 children in its baseball and softball programs, near the maximum it can accommodate across Beale and Luter.

The town is in the early stages of developing a master plan for Luter that would add more baseball and softball fields in a second phase. Forgiving part or all of the existing debt for the 2018 phase would put the SRA in a better financial position to afford its share of the second phase, Joyner said.

Rachel Klopfer, a member of the Save Beale Park committee that fundraises for the annual debt payments and Beale’s maintenance, said in an earlier Smithfield Times interview that costly improvements are also needed at Beale.

Cutler said he’d like to see the town similarly review and potentially amend its lease agreement with Smithfield Packers Youth Sports, which runs football, track and cheerleading programs for ages 5-14 at Luter. When Bowman had initially proposed using the interest from Luter III’s donation to forgive SRA’s debt, Butler proposed instead dividing the money equally between SRA and SPYS. 

 

What’s next for the Luter interest?

Luter III offered the money last year for the beautification of town-owned right-of-way fronting the Grange at 10Main mixed-use subdivision his son, Joseph Luter IV, is developing at the western edge of the town’s historic district, conditioned on the town matching the amount dollar for dollar and moving its farmers market to the Grange. Then-Mayor Bowman had facilitated the transfer of funds during a May visit with Luter III at his Palm Beach, Florida, home, but after months of Town Council inaction on the offer, Luter IV asked – and the town agreed in November – to return the money. During those six months, the money earned just over $130,000 in interest.

Luter IV’s letter requesting the return of the $6 million stated that “any interest generated from these funds may be kept by the Town to use as you see fit.”

Town Treasurer Laura Ross told the Times that the money averaged 4.99% interest per month. It’s a rate well above what non-municipal bank accounts typically pay.

“The rate that the town realized is a highly negotiated rate and not offered to residential customers,” Ross said. “We typically realize a better rate of return because our banking relationship, and larger balances, reside with the bank.”

The Luter money had been invested in a mutual fund. Ross said the town is allowed to invest in this fund up to 75% of its portfolio, which totaled $25.4 million as of June.