Pack Place plays its last card

June 21, 2014 Asheville , News Stories 1743 Views
Pack Place plays its last card

Pack Place board room RS

Board goes through motions of requesting to renew existing lease

By Roger McCredie- The Pack Place Board of Directors last week played the only card it had left after its months-long hand of showdown poker with Asheville City Council.

Despite three “nay” votes, the board adopted a resolution to request a renewal of its exiting lease with the city.  That lease was originally due to expire on May 31, but, as the result of a parliamentary end-run by the city, it was extended for 60 days to allow Pack Place to “tie up loose ends” before the city in effect commandeers the 22-year-old Pack Place facility.

The “nay” votes came, predictably, from Councilman Marc Hunt, who is the city’s liaison member on the Pack Place board, and also from Lin Andrews, representing the Asheville Art Museum, and Carol Peterson, representing Buncombe County Commission.  Hunt, together with City Manager Gary Jackson, has orchestrated the city’s takeover of the facility, from which the art museum stands to derive the greatest benefit.

Pack Place’s eleventh-hour assertion of its tenant rights is essentially a pro forma gesture designed to prove that the board exercised a degree of fiduciary responsibility by making at least a token effort to protect its partners – the art museum, Diana Wortham Theater, the Colburn Earth Sciences museum and the YMI Cultural Center – from what amounts to a hostile takeover.  (The YMI operates out of a separate building but is nevertheless a Pack Place partner and stands to be impacted by any action that affects the other tenants.)

If the board had not gotten its renewal resolution on the record, the city supposedly could have taken over the Pack Place physical plant by July 31, when the extended lease expires, without further ado.  As it is, the city is virtually certain to reject the renewal application – or take no action at all, which would have the same effect — and proceed with finalizing direct leases between itself and the Pack Place tenants.

This is what the art museum has been pushing for since early 2013.  Last September the museum obtained permission from the board to investigate the possibility of a direct-lease deal with the city, in effect seceding from the Pack Place partnerships in order to facilitate the $24 million expansion plan it has been seeking to fund, one way or another, since 2006.  It later developed that. rather than just investigating, the art museum had gone ahead and laid the groundwork for an independent lease.

The possibility of thus dismantling the Pack Place corporation, which would jeopardize county funding, plus the internal encroachments already made at Pack Place by the art museum, led the Colburn to decide its position would be untenable.  When the city showed the Colburn a proposed lease that one board member described as “a combination eviction notice and death sentence,” the Colburn announced it will surrender its space and look to be in other quarters by December of this year. As for the theater, it will continue operation as usual, although its overhead will be increased by whatever additional costs it incurs by having the city as a landlord.

The county has traditionally footed the bill for the Pack Place partners’ utilities and routine maintenance; however, at its May meeting the county’s Cultural and Recreational Authority played a wild card by voting to give Pack Place its full $409,000 stipend this year, provided there was no change in the Pack Place business model.  County Commission Chairman David Gantt, who also chairs the CRA, confirmed that restriction would apply to direct city-tenant leases.  In other words, the county told the city to leave Pack Place alone if it wanted any county money for Pack Place upkeep.

Hunt told the Pack Place board that on the previous day (June 10) Mayor Esther Manheimer organized a meeting that included Hunt, Gantt and Commissioner Brownie Newman.  According to Hunt, the meeting was held to “coordinate local funding” in light of the county’s stipulation.  He did not elaborate.

But Gantt told the Tribune the CRA’s position is the same, at least for the coming fiscal year.  “We pay the utility bills directly,” he said.  “The rest of the stipend goes to Pack Place.  We expect that the [county] commission will abide by our recommendation and pass it as we [the CRA] adopted it, for this coming year,” assuming there are no changes to Pack Place’s business model, but after that, who knows?  We’ve got an election coming up – two seats [on Commission] will be open, and we can’t bind the actions of a future commission.”

Gantt echoed what former commissioner David King said earlier this year:  “The county is not going to pay the city’s bills” if Pack Place becomes a city entity.  With Pack Place’s governing board stripped of its fiduciary authority – or perhaps no longer in existence – the city would have to find ways to plug the financial gap created by the absence of county money.

At the Pack Place board meeting, however, member Carol Peterson who, along with several other members, did not receive a copy of the lease resolution until the meeting started, said, “I represent County Commission.  I have not had a chance to discuss this with the,m.  I do know that the are interested in direct leases … “ Peterson did not elaborate as to whether Commission’s interest in the direct lease arrangement was pro or con, given that the CRA is already on record as saying it will not fund such an arrangement.  She and other members appeared nonplussed at the news of the meeting held at Manheimer’s behest the day before.

Earlier, Hunt, continuing to act in his role as the city’s hatchet man, had flatly stated, “The city’s position is that renewing the [existing] lese is unacceptable.”

“I feel a strong sense of fiduciary responsibility to the people who had the vision to build this building and raised the $5.3 million that went into it,” board chairman Edward Hay said  “If we don’t pass this resolution, then we’re saying to the city on July 31, ‘This is your building, you don’t owe us [the Pack Place corporation] a thing for it and we’re outa here,’ leaving the tenants high and dry if they have not successfully negotiated their leases by then.”  Hay also pointed out that by not going through the lease renewal motions, the city would relinquish its right to compensation, including the right to pursue such compensation in court, although new member Charles Worley called that “an absolute worst-case scenario.”

Although the resolution to request renewal of the old lease passed, observers said it was a matter of going on record rather than a serious effort to restore things to the way they were before the city launched its takeover campaign in January.  The board’s passivity, they said, represented a dramatic change from its saber-rattling in April, when the Pack Place attorney told the city by letter that the corporation would use every legal means to protect its tenants and the Pack Place partnerships.

(Editor’s Note: this web version is the  corrected version of printed original.)

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