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SECU CEO: ‘We’re not cutting any checks yet.’

Jim Blaine RS

SECU CEO Jim Blaine

‘Lack of transparency’ in art museum  deal bothers  ‘SECU Plaza’ sponsor

In late October City Council approved the art museum’s plan to allow SECU, in exchange for the seven-figure grant, to put its name on the brickwork in front of the entrance to Pack Place, which the art museum — aided by the city – had taken over in August.

But SECU’s CEO James C. Blaine told the Tribune in an exclusive interview last week that the credit union is “very much aware” of the controversy surrounding the naming rights deal, which also involves the city of Asheville, and is less than comfortable with the way it has been handled.

“As we’ve already said, our feeling is that supporting the arts in Western North Carolina is a worthy undertaking for the SECU foundation,” Blaine told the Tribune. “The art museum approached them and they had several meetings with them over the course of last year, and they were impressed by their presentation.

“But we’re not going to be the first to write a check,” Blaine said. “This is a performance-based contract; the art museum has to accomplish its own fundraising goals first.

“Also, we weren’t aware at the time that there would be any problem or controversy about putting our name on the property,” Blaine said. “That’s not what the Foundation is about anyway. We’re just trying to support the arts at the local level. The renaming deal is how the package was presented to us.”

Blaine added, “I guess our concern is, why this lack of transparency? Obviously there has been a lot of back-and-forth about the art museum and Pack Place between the museum, the city, the media and the public for some time and apparently there are issues that still have not been resolved. Is this a power struggle? Politics? What?” Blaine asked, interviewing the interviewer.

He was told that two factors have been in play since long before the SECU donation plan was made public. The first is whether the city’s assumption of control of Pack Place – which resulted in a direct lease with the museum that allows the sale of naming rights — is even legally valid. The second, which even more directly affects SECU, is the art museum’s own credibility with regard to its fundraising program.

The art museum began pressing the board of Pack Place late in 2012 for permission to investigate striking its own lease arrangement with the city. This was problematic since the Pack Place corporation, and not the city, owned the building; the city owned the ground on which the building sits and was leasing it to Pack Place for $10 a year.

A few weeks before the 2013 city elections it emerged that the museum, without further consulting Pack Place, was negotiating lease arrangements with the city. Then, on January 29, 2014, City Manager Gary Jackson informed the Pack Place board by letter that it had defaulted on its agreement with the city by failing to keep the premises in good repair, and that the city would therefore exercise its eminent domain rights and assume control of the building. Pack Place responded by proving that the city’s alleged neglected repairs were no such thing, but were taken from a list of suggested future improvements compiled by architect and board member Barbara Field.

However, in April, 2014, Vice Mayor Mark Hunt, accompanied by Jackson, told the Pack Place board they had been authorized to demand that Pack Place, then and there, pass a resolution surrendering control of the building to the city. Hunt was asked to produce written evidence of his authorization to make his demand. He replied, “It was verbal.” Nevertheless, the board issued the resolution.

The board, which is still intact and meeting regularly while winding down operations, indicated in January that it is still considering the possibility of a lawsuit against the city, though so far it has made no move in that direction. Blaine said SECU is aware of that situation which, if tested in court, could render the city’s claim to ownership – and therefore the art museum’s negotiations with SECU – null and void.

In 2006 the art museum announced its intention to raise $24 million for an extensive renovation and expansion project that would double the museum’s area. Little was heard of grassroots fundraising – “We’re in the ‘quiet phase’ of our campaign,” Myers said in a Verve magazine interview in 2010 – but the museum had obtained a $1 million performance grant from the Buncombe County Tourism Development Authority in 2007 and another for $500,000 in 2009.

On July 25, 2012, TDA informed the museum that it had failed to perform its fundraising activities adequately in accordance with its business plan and was in default on both its grant contracts. At the same time, TDA offered the museum a six-month contract extension. When that time was up, TDA extended the museum’s performance deadline yet again.

Meanwhile, in August of 2013, while it was engaged in private lease negotiations with the museum, the city awarded the museum $2 million in funds acquired by a two-cent citywide tax hike. The museum money is currently in escrow,

In a 2013 interview with the Tribune, art museum executive director Pam Myers stated that, after seven years of capital fundraising, the museum had collected $11.4 million in cash and pledges. In 2014 the museum said that figure represented two-thirds of a goal of $17 million for its initial improvements. It was not clear what had happened to the $24 million figure.

In a letter to Myers, former Asheville mayor and city manager Ken Michalove asked, “Exactly what is [amount of] the Asheville Art Museum total capital fund drive? I have heard anywhere from 15 million to 24 million. The Citizen-Times Article July 2 stated $20 million which I assume was information you gave the reporter. However, according to your fund drive commitments made in the 2010 Tourism Development Authority (“TDA”) Grant application, the amount is $24 million. When questioned by Councilman [Chris] Pelly June 25, City Manager Jackson stated $22 million. The July 2, Citizen-Times article, comment by reporter Sabian Warren [reads] “ She [Myers] declined to say how much money had been raised from public and private sources.”

“We’re well aware of all this history,” Blaine said. “I’ve looked at the various meeting videos and we have kept up with what the media have reported. We know this is an ongoing issue in Asheville and whichever way [the naming right issue] gets resolved, we’ll be perfectly happy. This isn’t about a name, it’s about our commitment to the arts.”

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