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Pack Place operation grinds to halt

Pack Place board room RS

No severance pay for staff; no agreement on what happens next

The nine-person administrative and custodial staff of the Pack Place building, which was recently acquired by the city in what amounted to a hostile takeover, has been informed that effective August 31 they will no longer be employed by the corporation that ran Pack Place for 22 years. Nor, according to Pack Place management, will they receive any severance compensation.

Late last week atty. Edward Hay, board chairman of the nonprofit organization that formerly governed Pack Place, instructed managing director Heather Nelson to prepare “a list of the thousands of things that need to be done to wrap up business for Pack Place and to pass the management of the building on to the tenants.”

Nelson has, in fact, been compiling such a list since the end of July, when it became evident that the Pack Place board had no plan in place for suing the City of Asheville over its seizure of the 22-year-old building. The takeover was accomplished by the city’s refusing to renew its lease with the Pack Place corporation – even though, at the time, the city only owned the land on which the building stood, not the building itself – and then negotiating independent leases with each of the Pack Place tenant-partners. The partners are the Asheville Art Museum, Diana Wortham Theater and Colburn Earth and Science Museum.

Hay’s instructions mean that Nelson is now tasked with, among other things, undoing years-long contractual relationships with vendors and utilities and informing them that they will now be dealing with three entities instead of one. She must also draft a termination letter to be sent to all Pack Place employees – including herself – and cut a final payroll. In addition to receiving no severance pay, the center’s employees (not to be confused with the partners’ own employees) will also lose health insurance and their other company benefits.

The board having made itself a corporate zombie, all business formerly conducted by it now passes to the partners. At its last meeting on August 19 the board stood aside to allow the formation of a “transition committee” composed of representatives from each of the partners plus former mayor Charles Worley, who became a board member just in time to participate in its demise.

Some Pack Place employees say they have already been approached by the partners and asked if they would be interested in working as independent contractors at least until October 1, by which time the transition is supposed to be complete and each building tenant functioning independently in a new partnership with the city. No such arrangements have yet been finalized with any of the soon-to-be-jobless employees. Nelson, who has overseen Pack Place operations for 13 years, does not expect be issued such an invitation. “I’ve accepted that I’m unemployed as of Sunday,” she said.

Pack Place’s last glimmer of hope for retaining its corporate functionality was extinguished when county commission changed its tune about how the county’s contribution to Pack Place’s operating funds should be dispensed.

Commission had previously voted to give the Place Place corporation the full amount it had budgeted for the coming fiscal year – some $409,000 – provided that Pack Place would not alter its “business model.” The move occurred in the midst of Pack Place’s fight with the city over whether the city had the right to ignore the Pack Place board and negotiate direct leases with the tenants. The county’s stipulation was seen, and was confirmed by chairman David Gantt, as sending a message to the city to leave Pack Place alone.

But at the meeting on August 19, commission changed its stance and voted to pay out $180,000 for maintenance and repairs, to be split among the individual partner organizations, and another $185,000 for utilities in similar fashion. This means that the two museums and the theater will now be responsible for setting up and managing their own utility accounts, as well as negotiating their own arrangements with vendors.

The city’s role in monetary and in-kind support of its new acquisition is still murky, a situation which was highlighted at the Pack Place board’s regular meeting on August 13, when Nelson announced that the main compressor for the building’s HVAC system had ceased functioning and the building’s air conditioning is currently running off the backup compressor unit. Nelson said the choice of remedies was between doing “band-aid” repairs to the nonfunctioning unit, which would cost about $3,000, or purchasing an entirely new unit for about $10,000.

This news brought about a discussion of what action should be taken and by whom. Board members, except for the art museum, said that was no longer their problem. Chairman Hay said, “This should be left with the city.” Vice Mayor Marc Hunt, who is also on the board, said he has not seen the final drafts of the tenants’ leases with the city – which have still not been signed – but said, “I know it [the city’s responsibility as new landlord to make repairs] is conceptually there.” Waiting for an opinion on that score, and leaving the building at the mercy of the backup unit, did not suit the art museum. “That is totally unacceptable,” AAM executive director Pam Myers said.

Nevertheless, as of Monday, no decision had been made about replacing or repairing the compressor, Nelson said.

Nothing has been discussed – at least in open meetings – about Pack Place’s endowment, which amounts to several hundred thousand dollars. Under the terms of the Pack Place charter, the endowment is not severable until and unless the Pack Place Board formally dissolves the corporation.

The Pack Place corporation also owns outright all of the equipment and furniture in the building. The board has the right to do with its corporate property as it sees fit, including removing it from the building.

“It would be fitting,” Nelson said, “if they put it in a warehouse, sold it and used the proceeds to finance decent severance packages for the people who are losing their jobs.”

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