Council approves $2.2 million for Eagle Market project

September 1, 2013 Asheville , Leslee Kulba 1275 Views
Council approves $2.2 million for Eagle Market project

 

 

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By Leslee Kulba-Asheville City Council approved a $2.2 million loan for the Eagle Market Place project. The development is now estimated to cost $14,934,025. Other sources of funding for the project include over $1 million in state tax credits, almost $4 million in other loans from the city and Buncombe County, and almost $700,000 in pass-through loans from Mountain Housing Opportunities. Supporters are also holding fundraisers and applying for private grants.

In its latest iteration, the project would like to preserve the Ritz, DelCardo, and Dr. Collette building frontages and build behind them a large structure. It would provide 10,720 square feet for office space, community purposing, and historical preservation. It would also provide 62 apartments with rents ranging from $250-780. Rent controls would ensure the units would be available to persons earning 60 percent of median income for the next thirty years.

As the design phase reached its winding-up scene, it was discovered that costs would be $3 million greater than estimated. Members of city staff explained those costs came from learning the soil on-site was poor, necessitating more work in laying the foundation and supporting structure for a second-floor deck. They also attributed the increases to “rising costs in general due to improved economic conditions.”

To address the funding gap, the city employed a third-party estimator, who determined $3.6 million was more like it. The estimator further discovered the contractor had listed as optional another $150,000 for “electrical, plumbing, HVAC, and interior finishes such as sheetrock.” To this, EMSDC replied they would let tenants of the affordable spaces do their own sheetrocking, etc. Regardless, MHO’s general contractor, Weaver-Cooke, said it would complete the project for its initial price, and the interested parties agreed the city could pick up the difference, which would add $3,367,618 to its former loan total of $1,300,000.

A dozen members of the public addressed council during the public hearing. Most were affiliated with the project as board members, and some were entrepreneurs from the area who hoped to set up shop in the finished buildings. Many spoke of a proud heritage destroyed as an unintended consequence of central planning. It was indeed unjust, but nobody addressed how preservation of an honorable heritage translated into the construction of a large building complex that multiple loans have not been able to help in the last twenty-seven years.

The project has a history of failure, which is practically a given for trying to construct subsidized housing on prime real estate. Yet project advocates cared nothing about market analyses. They had a heritage to revive. Those who remember, describe The Block as having been a thriving, self-contained center for commerce back in the days of segregation. The heyday was brought to a rude end when one of the many waves of urban renewal mowed it down in the 1970s. Never coming close to recovering, the area was left in a condition that qualified it to receive HUD funding offered to rejuvenate spot slums and areas of blight. The past was checkered with so many disappointments, supporters such as Stephanie Twitty, president and CEO of the Eagle Market Street Development Corporation, asked council to look past the “struggles,” and instead “seize the moment.”

Before attempts to reclaim the area began, the Rev. John Grant of Mt. Zion Missionary Baptist Church described the area with stories of drug dealing, rats, a dead body, and vagrants desecrating his home of worship with excrement. Having received $1.14 million in federal funding in 2001 for a renewal project, Mt. Zion and EMSDC ran into a hitch when Gene Ellison, a co-owner of the Ritz Building, sued EMSDC, accusing leadership of self-dealing.

When EMSDC came before council to request support for the project, they were turned down. The lawsuit, which was later ruled to be unfounded, played a part. Insufficient auditing data played another. To further complicate matters, on the day of the public hearing, the local daily published a front-page article on a federal form that had apparently been redacted by somebody protecting EMSDC’s interests. When council turned the project down on a 4-3 vote, HUD reclaimed $300,000 and allowed the city to keep the rest for another project.

In 2008, when EMSDC had finally regrouped, the city allowed it to enter into a predevelopment agreement with an outfit called Eagle Market Renaissance, LLC. They proposed a mixed-use rehabilitative project, but during the construction slump, EMSDC joined the ranks of many well-intended developers and bailed out of the agreement.

The silver bullet for the project, if there is to be one, came in 2012 with the partnership of Mountain Housing Opportunities. MHO, which bills itself as a private nonprofit, is no stranger to public funding. The organization offers assistance in home rehabilitation and repair, but it is also heavily involved in new, affordable developments. Examples include the Glen Rock Depot in south Asheville and the Larchmont Apartments on Merrimon Avenue. MHO’s record for success is as good as EMSDC’s for disappointment.

Wary of history’s tendency to repeat, prior to their meeting Tuesday, city staff encouraged council to add language to any development agreement stating MHO had to unconditionally guarantee project completion, and that the $2.2 million represented the city’s “final and full funding commitment.” If the project fails this time, the tax credits will likely be forfeited from the city and the state, sullying future applications. Another drawback is that the project will be depleting money pots the city redistributes for community development projects for some time into the future.

In what was possibly an unrelated consent agenda item, council approved “reimbursing itself for expenditures” with proceeds from a loan to be taken out at some indefinite future date. The loan was not expected to exceed $19,000,000, and it would “reimburse” the city for expenditures now undertaken for “construction and improvement of streets, bridges, sidewalks and multimodel facilities, renovations and improvements to City Hall, art museum, and park/athletic facilities, the acquisition and construction of park facilities and greenways computers , the acquisition, construction and improvement of workforce housing, the acquisition of vehicles and equipment and utility improvements.[sic, sic, sic, . . .]” Some of these projects competed for funding awarded to the EMSDC/MHO partnership.

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