RFP Staff
♦ Prior to becoming a City Councilman, Brian Miller, chaired the Empire Hotel Task Force. Brian Miller and the Empire Hotel Task Force provided the leadership resulting in the purchase of the Empire Hotel by Downtown Salisbury Incorporated (DSI) for more than $1 million. A group of banks loaned the money to DSI to purchase the property. The plan was to flip the property quickly to a developer so that DSI would not have to make the loan payments, which are nearly $100,000 per year.
This never happened. In fact, multiple developers have looked at the property and zero were willing to put their own capital at risk to make the property happen. The first issue, as previously reported by Rowan Free Press, is the property does not have a clean environmental report due to asbestos in the building that would cost almost $500,000 to abate, and the fact that the site includes a former dry cleaner. (we’re not even mentioning the lead dust and mold) The second issue is that hoteliers want to locate by the interstate. The third issue is that the cost to rehab the building is more expensive that constructing a new hotel. These are issues that Brian Miller and the Empire Hotel Task Force failed to flush out prior to dedicating $1,000,000 of public funds to the project.
As a result the property sits derelict and DSI continues making the loan payments.
Prior to the loan payments hitting, DSI had the annual funds needed to support a dedicated marketing staff member who did an outstanding job. Remember Betz McKeown? DSI also had the funds to market downtown events so that merchants would benefit from the increased traffic. These funds are now going to make the annual Empire debt payment.
Now the Rowan Tourism Authority is pulling their funding of downtown events too, and requiring DSI to go through a grants process to prove these events result in room nights for hoteliers. Downtown events don’t generate room nights. They aren’t put on for hoteliers. They are put on for downtown merchants.
What this means is that despite paying the highest combined property tax rate in Rowan County, downtown merchants aren’t getting the services from DSI needed to bring more customers to their doors. Largely because $100k a year in the merchants’ tax dollars go toward making the debt payment for Brian Miller’s failed project.
Brian Miller, as Chair of the Empire Hotel Task Force, should have conducted proper due diligence before committing future merchant tax dollars. Because he didn’t, downtown merchants are stuck with the tab for the Empire Hotel. Instead of merchant dollars going to put on events that feed merchants more customers, those dollars are going to make the Empire debt payment.
Most recently, Brian Miller, a former City Executive for Citizens South Bank and BB&T Bank, was moved out of commercial banking and into a sales role pushing retail BB&T products.
Read the letter and environmental report to Brian Miller that stated a dry cleaner was on the Empire site: https://app.box.com/s/33uqwen5i96xp37lgav4kev0m6ruyg6y
Read the letter to Brian Miller outlining up to $520,000 in cost to abate the Empire asbestos: https://drive.google.com/file/d/0B2E5Ew6OLdElZGc0SFZ1V1VRb0E/edit
Despite having professional environmental information that the site was dirty and had up to $520,000 in asbestos abatement costs, Brian Miller still pushed for the purchase of the Empire Hotel.
Read the below email exchange from a Freedom of Information Act inquiry. It appears Brian Miller never told former City Manager Doug Paris or other City Council members that the Empire was dirty despite knowing about it since 2007:
From: William Kennedy
Sent: Tuesday, July 23, 2013 1:25 PM
To: Doug Paris
Subject: Re: Empire Phase II
This obviously could become a campaign issue that could harm the incumbents seeking re-election. By all means delay a decision on this.
Sent from my iPhone
William”Pete”Kennedy
From: Doug Paris
Sent: Tuesday, July 23, 2013 11:45 AM
To: Paul Woodson; paulwoodson3@gmail.com; Maggie Blackwell; William Kennedy; Brian Miller; Brian Miller; Karen Alexander; Karen Alexander
Cc: Myra Heard; Elaney Hasselmann; Janet Gapen; John Sofley
Subject: Empire Phase II
Good Afternoon,
I wanted to give you an update on this item.
After discovering during the Integro incentive discussion that the Empire property did not have a clean Phase I, I have been working with DSI President Mark Lewis on resolving this issue.
Alan Griffith, our contract geologist who assisted us on getting the green light with DENR on both 300 Block projects, recommended that we proceed with a Phase II assessment.
This proposal was presented to the DSI Board this morning and was met with resistance from banker Bill Greene
and banker Paul Fisher.
The resistance was mainly centered on if the Phase II found anything, that it would require cleanup. DSI does not have the cash reserve to fund a cleanup and so the DSI board would then have to come to the city. There was concern about public support for this.
Obviously, if the city didn’t pick up the costs then the banks would be left with a mess – essentially a million dollar note on a building worth maybe half that with 500k worth of asbestos abatement and then a dry cleaning/petroleum cleanup on top of it all. The dynamic is the asset could rapidly deteriorate into a large liability.
The board decided to delay two months on the decision to proceed on the Phase II.
I do want to share Mr. Lewis has been great to work with on this item and I couldn’t ask for better collaboration.
This one is a tough issue, and one that will not go away without tackling it as a team with all partners on board.
