RFP Staff,
♦Our staff includes an experienced hand from the banking world who organized a timeline related to the city-county battles over the downtown Central Office project. In examining the city-county battles over the Central Office its important to note how the Empire Hotel acquisition fits into this picture, dating back to a $1.2 million loan to Downtown Salisbury Inc. for the purchase of the Empire Hotel. Originally Downtown Salisbury Inc. hoped a developer would invest $9 million to $18 million in the project, to renovate the Empire to its 19th Century grandness. But now, it appears the organization is more wedded to the more modest goal of finding someone to just buy it for $1.2 million and get it off the hands of Downtown Salisbury Inc. (DSI). To find a buyer to relieve them of their massive debt along with the maintenance burden, the Central Office must be located at 329 South Main Street, so that potential investors could might buy into the illusion of downtown revitalization on South Main Street. That high-stake smoke and mirrors game is why even the buildings owned by The Evening Post Publishing Company were not adequate. It would not serve the same purpose as ‘new’ development in the area.
The timeline:
1) In 2007 the City of Salisbury encouraged DSI to seek purchase of the former hotel-turned-flophouse-turned pigeon nest; DSI leadership purchased the Empire Hotel, an 88,000 square foot property on 1.39 acres, via a 7 member lender “pool” made up of local banks. Over $1 million was borrowed, payable in quarterly interest payments of $19,000 each.
2) On 8-07-2007, the City of Salisbury held an awards ceremony, honoring the 7 banks who pooled resources to bankroll the promise of a new downtown 88,000 square foot hotel.
3) Despite the opening of Comfort Suites in 2007, Salisbury was still assured by Mark Lewis and Randy Hemann that an 80,000 square foot downtown hotel was feasible, noting that the region also badly needed a regional convention center.
4) In 2008 when it was obvious the real estate market was taking an historic fall, the visionary leadership of DSI assured readers of its fall newsletter that by the end of October, they would have secured a Memorandum of Understanding with a developer who would invest the funds to return the building “back into an operational hotel.”
5) On 12-23-2008, the Marriott Courtyard hotel chain bought a parcel where the former EconoLodge stood; they were stymied for several years about design criteria and permitting, which some believe may have been strategically delayed in order to get a buyer for the Empire Hotel before the glut of hotel space in Salisbury made the redevelopment of the Empire Hotel unfeasible.
6) On April 6, 2010, city council details in a discussion their “need” for a downtown convention center. The 300 block of South Main Street was discussed as a possible site, which would compliment the Empire Hotel redevelopment project.
7) William Graham made a $70,000 interest-free loan in late 2011 that comes due in 2015; while the remaining 6 lenders in the project had given multiple extensions, with no guarantee of any further extensions on the loan, which is fully due and payable on 8-13-2016, making bank foreclosure the remaining option if the city cannot persuade a new county commission to be elected in November 2014 to fit with their downtown economic bailout plan.
7) In January 2012, Commissioners approved $6 million for a consolidated central school office.
8) In the same time period in 2012, Salisbury blamed the county for permitting delays on the Marriott, as the City was securing its downtown Central Office commitment.
9) In early 2012, Salisbury persuaded the county to ‘rectify’ a burdensome, duel-jurisdiction regulatory scheme by the establishment of a ‘cooperative’ county-city inspection/planning office, in the downtown area.
10) RSS posted a “FACT SHEET” on 1-23-2012 about the 12 locations examined for a central office, blaming commissioners for the delays: http://www.rss.k12.nc.us/index.php/Main/2nd_Page/555
11) Salisbury announced they’d landed a deal to have the central office built downtown, which would lead to renewed interest in the Empire Hotel, and development of S. Main Street; they hailed the two top vote-getters for county commission in May, delaying the $6 million central office in order to extract more coin from taxpayers through two more ‘friendly’ commissioners. They want a large “salisbury green” dome on top (compared to the former ‘twin domes’ on the Empire Hotel), an 800 square-foot kitchen, and ample meeting space that some compared to a convention center.
12) In July 2012, the two highest Republican primary vote getters for commission were defeated, when runoff primary voters realized the duo, Gus Andrews and Gene Miller, were willing to give Salisbury and the School Board whatever they wanted in regards to a downtown Central Office, and the apparent standstill without any construction or contract awards, fueling the rumors that the school board would wait until after the election to seek a larger sum of money to fund the project downtown. Two conservative primary runoff candidates, Mike Caskey and Craig Pierce, defeated the previous higher vote-getters in an upset runoff.
13) in October 2012, the city downplayed the ‘discovery’ of soil contamination a the donated site, claiming it would not deter the construction of the Central Office, even though their engineers had listed the likely presence of 4 additional orphaned tanks in an environmental survey dated April 2012.
14) In November 2012, Mike Caskey and Craig Pierce were swept into office on a “no downtown central office” expression of voter anger.
15) In December 2012, citing the soil contamination, Commissioners voted 3-2 to postpone a vote on the withdrawal of central office funding, to give school officials time to reconsider locating it on a contaminated site.
16) After months of political wrangling by the school board and the city against the county commissioners, the newly-constituted board of county commissioners let voters know they’d gotten the message loud and clear, resolving by 3-2 vote that they would not fund the central office at the site at 329 S. Main Street, in a vote that was delayed from December 2012 to February 2013.
17) Concurrently with the delayed vote, the city initially denied reports of obvious groundwater contamination at the site, despite DENR letters stating that the extraordinarily high concentrations of soil contamination led engineers to state in written documents that there was a high probability the groundwater would have also been contaminated.
18) City leaders paraded the news of two offers for companies to locate businesses in the 300 block of S. Main Street, contingent upon the location of the Central Office, even though purchase and development lending was never unconfirmed by either company.
19) City leaders proclaimed a “clean bill of health” in March 2013 for the soil, and then found that groundwater contamination was also found; but they vowed it would not affect the groundbreaking schedule, which arguably should have happened a full year earlier, but for the political delays.
20) City leaders, along with the chief stakeholders in the Empire Hotel (Mark Lewis and Paul Fisher) made multiple trips to Raleigh, and spoke with Thom Tillis, telling him how they believed the county commissioners were not conveying a fair picture of Salisbury’s stewardship of the airport. In a separate letter from city officials to Thom Tillis, written on April 5, 2013, the city claimed it would have annexed the entire airport were it not for the formerly “arcane” laws that limited them to cherry-picking the best real estate at the airport; the city and its shills also lobby Raleigh lawmakers not to turn over school system buildings to the county commissioners.
21) DSI director Randy Hemann announced in early April that April 30th would be his last day at DSI; that he was leaving to pursue his dream of managing a small town. (Oxford, NC population slightly over 8,000)
22) The debt on the Empire Hotel, just over $1.2 million, was still hanging over the heads of DSI, with no buyer or developer on the horizon to enable the sale of the dilapidated building that was built in 1855; and the fading hopes of a downtown Central Office to generate the illusion of economic vitality in a decaying downtown continues the desperation of trying to make the downtown Central Office work. The dream would only continue if the City of Salisbury could borrow the money to build it themselves.
23) In mid-April 2013, the city got a letter from a contracted engineering firm, stating that despite the groundwater contamination, the integrity of monitoring and pumping wells at the site could be maintained, and they could begin construction as soon as a “No Further Action” letter arrived.
24) In the midst of questions about cross-contamination of neighboring sites, and lending regulations that require “due diligence” which is a higher standard than “No Further Action,” the city manager makes the quote of the week on 4-19-2013, saying that the challenges of lending and construction will not pose as difficult a task as the “open pit” did.
25) In breaking news on 4-19-20913, the city manager and school board chair make it known that they will once again seek a re-commitment of the $6 million to fund the central office, even though earlier (speculation is before they found out no lender would want to extend credit on a toxic site without substantial loan guarantees, and the likely denial of a city loan by the LGC), the city had pledged to seek the loan for $8 million on their own, as recently as January 2013.
26) Also on 4-19-2013, the county commission chairman, Jim Sides, declares the issue of the commissioners funding the downtown central office to have been settled two months earlier, and not subject to re-discussion in the upcoming school budget meeting.
It seems that the city and the school board have worked a plan to rescue DSI from “the unraveling of woe”—the potential loan foreclosure and bankruptcy due to the Empire Hotel project. It is so critical for the city and DSI to avoid the worst-case scenario, that they have gone to extraordinary lengths to fight the county commissioners tooth and nail for the downtown central office. Some of these folks, including one sitting councilman, have classic “stakeholder” status: to ensure a return on their employers’ financial investment in the former ‘flop-house’ at the 200 block of South Main Street.
The 2007 award-winning bankers who were recognized for the participation in the Empire hotel acquisition were:
Mr. Mark Lewis, Bank of North Carolina, former city councilman, and chief booster for Salisbury’s fiber-to-home enterprise;
Mr. Burt Brinson and Mr. Brian Miller, Citizens South Bank;
Mr. Bruce Jones, Mr. Seamus Donaldson and Mr. Jeff Wetmore, Community Bank of Rowan;
Ms. Rhonda Martin CommunityOne Bank;
Mr. Darryel Scism, F&M Bank;
Mr. Tyler Holden, First Bank;
Mr. Bill Greene, Wachovia Bank;
Mr. Paul Fisher and F&M Bank (for providing a revolving fund for the redevelopment of downtown property)
Even if the central office were built downtown, with a opulent green dome patterned after the twin domes on the original Empire Hotel, still faint hope remains they can avoid foreclosure on the Empire Hotel loan in 2016. But out of desperation, the Central Office on South Main Street is the real stakeholder’s last hope of locating a purchaser to remove the albatross of that $1.2 million still owed on their questionable investment at the 200 block of South Main Street, some six years ago.
Many previously believed Salisbury’s elitists were pushing the downtown location for the Central Office out of spite against the county commission; a cursory review of the money trail belies a much more understandable, if not respectable, common purpose.
In the interim if Downtown Salisbury Inc. got creative, they might consider talking some community-spirited volunteers, from among the historic preservation-minded, into sandblasting the Empire and putting in new windows–abate the black mold and bat nests. Then go full tilt on returning the Empire to its grandeur as a depression era flop-house. Dangle individual bare light bulbs with cloth wrapped cords from the ceilings in each room. Import orbiting moths. Toss in canvas cots with Dollar Land pillows for weary down-in-the-heels ”travelers”. 10 bucks for a 10 hour flop sounds righteous. Rebrand it “The Irish Traveler Inn”–and pitch it as a youth hostel oozing with history. ”The Irish Traveler Inn” could be a ”destination”–the oldest surviving flop house in America. The surrounding South Main “tenderloin” would lend just the right urban atmosphere. If the Legend of Sleepy Hollow doesn’t return for a series, perhaps some producer could drum up interest in a depression era series set in the “Irish Traveler Inn”. If that failed, why not a series based on the video game “Grand Theft Auto”? A real coup for downtown Salisbury.
Can you imagine the selling points multiplying for out-of-towners being coaxed into buying the Old Empire? A condo hotel? A Chucky E. Cheese regional headquarters? A 3D video Casino! Play up the fact that Otto Wood, the famous North Carolina gangster, once flopped there. A winner! Heck even the Rowan Free Press might consider the upper floors for its corporate offices as long as they patched holes in Skylight Ballroom where the bats nest in 19th century splendor.
