AshevilleNews Stories

Does city plan to sell Grove Arcade?

griffin RS

Rumor persists; confirmation proves elusive

Yes, according to a rumor (and so far it’s just that) that is currently rippling through local business circles. Speculation is being fed by a sudden burst of repair and maintenance activity at the 80-year old building — particularly on its roof – during one of the busiest times of the tourism year.

The rumor also coincides with the city’s forced takeover, effective last week, of Pack Place Cultural, Arts and Science Center, in which the city elbowed aside the Center’s board of directors and assumed the role of landlord over the Asheville Art Museum, Diana Wortham Theater and the Colburn Earth Sciences Museum.

Some long-time observers with connections inside city government are looking beyond the theory that the Arcade work is being done as preparation for a sale. They say that the larger scheme of things, including the Pack Place caper and the city’s charging rent for Asheville Symphony office and rehearsal space at the U.S. Cellular Center, suggests that the city is engaged in a one-player game of “Monopoly” whose object is to cut losses and shore up a shaky city economy.

The Grove Arcade is home to dozens of retail shops, food outlets and offices, as well as luxury condominiums on its upper floors. And, whereas the city owns only the ground underneath Pack Place and had to play a months-long game of legal chicken with its board before gaining control of the property, it would face no such obstacle at Grove Arcade; it owns the entire property outright, thanks to a 1997 quitclaim deed from the United States government, which had owned the building since 1942. The deed stipulated that the premises be used “for historical and monument purposes.”

From vision to reality to setback to resurrection

Like the Grove Park Inn, the Bon Marche building (now the Haywood Park Hotel) and several other Asheville architectural gems, the Grove Arcade was built by the proceeds of the sale of millions and millions of bottles Grove’s Tasteless Chill Tonic, a decoction of quinine in suspension that was in fact highly effective as a treatment for malaria. Its developer was Edwin Wylie Grove, a humble pharmacist and drugstore owner in Paris, Tennessee, who became a multimillionaire and, like George Pack and Thomas Wadley Raoul, brought his entrepreneurship to Asheville and got into the real estate game.

Grove’s vision was for a public retail space along the lines of London’s Burlington Arcade, but with a dramatic difference: In the center of the hollow square formed by shops, he intended to erect a 20-story office tower. Moreover, the project was to be sumptuously constructed and appointed, incorporating original sculpture, terrazzo tile, several kinds of marble, crystal fixtures, bronze hardware and other elegant amenities. Work on the building began in 1926. The ground floor and three upper floors were completed over the next three years.

Then came 1929.

Grove, for all his business acumen, sustained a body blow in the crash of that year and had to abandon going forward with the arcade project. He did, however, succeed in making the most of what he had and even in the midst of a depression his retail space filled up and business, if not great, was steady. Then in 1942, as part of the war effort, the United States government stepped in and acquired the building for use as office space. Following the war years the structure languished in federal hands, its largest tenant being the headquarters of the National Climatic Data Center.

As “Capital at Play” magazine related:

“In the 1970s, Asheville citizens began a drive to have the building restored to its original grandeur and purpose. In 1974 it was listed on the National Register of Historic Places, which could yield valuable tax credits to any organization willing to restore the arcade. The arcade’s owner turned a deaf ear; it would be 20 years before Uncle Sam would relinquish his grip on the grand landmark.

“Finally, in 1995, the city of Asheville was granted title to the Grove Arcade for the sum of one dollar. Two entities stepped forward as partners to restore and operate the city’s new building: CP&L (now: Duke Progress Energy) and Grove Arcade Public Market Foundation.

“After spending approximately $20 million on the restoration, and a well-publicized grand opening, the Grove Arcade was reopened for multi-use business in 2002.”

Wakeup calls

The black tie gala that marked the reopening of the Grove Arcade as a retain, dining, office and residential hub seemed to cap the climax of a steady stream of successful private development in the Haywood Park neighborhood.

Very soon, however, one thing became apparent: the Grove Arcade was a high-maintenance location, a fact which weeded out some early tenants and kept others away. Within two years of the grand reopening the board of directors of the Grove Arcade Public Market Foundation, which oversees the facility, was in a bind: In 2004 the Arcade had been open for two years but retail occupancy was still below 70% and some existing tenants were treading water.

That was when the board hired Ruth Summers, former executive director of the Southern Highland Handicraft Guild, and installed her as the president of Grove Arcade Restoration, Inc., which holds a 99-year lease to manage the Arcade’s 66,000 square feet of retail space. Summers set to work streamlining lease agreements and screening prospective tenants; as a result, retail occupancy has not fallen below 87%.

So … is it true?

Rumors – even ones that seem to have legs to them – are difficult to chase down over a long holiday weekend when municipal and other offices are closed. The Tribune is following the story closely and will report accordingly.

Exactly how the sale of the Arcade would work, given the powers vested in the GAPMF and its 99-year contract with GAR, is not known.

What is known, however, is that the Arcade, square footage-wise, is the largest building in Asheville. It comprises 269,000 square feet. By comparison the BB&T building only houses 130,000 square feet, making it less than half the Arcade’s size.

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