Homeless board of directors still considering lawsuit against city
By Roger McCredie- Heather Nelson has spent the past several weeks putting things in boxes, lugging the boxes to a storage area and shredding documents accumulated during the 22-year existence of Pack Place – from its jubilant launching to its downward spiral to extinction.
“It’s sad,” said Nelson, 36, who has spent a third of her own life working for Pack Place, eventually becoming its managing director before being forced out of her job more than a year ago, when the city succeeded in bluffing its way into control of the publicly-financed building and in effect handing control of it over to the Asheville Art Museum.
Nelson, now a freelance accountant and management consultant, was hired to return and supervise the final cleanup. The Pack Place board of directors has promised the city that all vestiges of their corporation’s existence will be gone by June 30.
The board, however, still plans to meet in July, probably for the last time. Its regular May and June meetings were postponed. In the interim – and in fact for much of the past year – the board’s day-to-day administrative duties have been assumed by its executive committee, consisting of Chairman Edward Hay, Treasurer Michael Andry and members Tina McGuire and Charles Worley.
The July session has historically been the Pack Place corporation’s annual corporate meeting, and one reason for making sure a full board meeting takes place is that there are still two significant items of business to be settled: what will become of Pack Place’s endowment monies and whether the board will follow through – even now – on its months-long declaration that it intends to sue the city of Asheville on charges that its seizure of Place last spring was bogus.
After nearly a decade of planning, Pack Place officially opened its doors on July 4, 1992. A large crowd turned out to hear then-Mayor Ken Michalove and other officials praise the creation of a unique cultural, arts and entertainment center that had been funded largely by private and corporate donations. The original tenants were Diana Wortham Theater, the Colburn Earth Sciences Museum, the Health Adventure and the Asheville Art Museum. The YMI Cultural Center, though its quarters are in a separate building around the corner, was also a founding partner.
But the Health Adventure developed financial and internal problems and eventually vacated its space in the building, which was up for grabs briefly before being laid claim to by the Art Museum.
The first cracks appear
Pack Place minutes show that the art museum began pressing Pack Place for a separate lease from the city at least as far back as January, 2013. The museum said such a course of action would facilitate an ambitious fundraising campaign it has been carrying on since 2006.
So Hay proposed the formation of a committee, comprised of then board member Jeff Richardson, city atty. Bob Oast, and former mayor Michalove, who had been retained by Pack Place as a consultant, to devise a plan for resolving the art museum’s demand. Meanwhile, Hay advanced a compromise plan of his own: let the board enact a long-term sublease with the AAM that would include, at Oast’s suggestion, a non-disturbance agreement, which, Hay said, should satisfy the museum’.s potential donors. But attorney and former mayor Lou Bissette, acting for the art museum, flatly rejected that idea, calling it a “roadblock” and “an impediment to progress.”
In June of 2013, Michalove abruptly resigned in order, he said, to speak his mind. He made a passionate presentation to city council in which he accused the art museum and city government of acting in collusion to “destroy Pack Place” in order to insure domination of the physical plant by the art museum. In support of this assertion he produced several dozen pages of records, e-mails and financial analyses, as well as evidence of business and personal ties between city and art museum staff.
Michalove’s investigation results yielded little interest and no comment downtown.
Late in 2013 the board, as landlord, gave the art museum, as tenant, permission to explore the possibility of negotiating a separate lease with the city. The museum responded by actually entering into lease negotiations with the city. Seeing the handwriting on the wall, the Colburn museum, smallest and most financially vulnerable of the tenants, said that if this action was a preface to the board’s letting the other tenants follow suit, it would not be able to afford being a city tenant and would have to look for other quarters.
The coup begins
Under the terms of Pack Place’s agreement with the city, Pack Place owned its publicly-funded building outright; it leased the ground on which the building stands from the city for ten dollars a year. If the city should ever wish to acquire the building, it would have to make an offer and purchase the facility at fair market value.
There was one exception: if at any time it could be proven that Pack Place was not properly maintaining the premises, then the city could declare Pack Place in default of the agreement and use eminent domain to acquire the building without compensation.
Thus it was that on January 29, 2014, City Manager Gary Jackson sent Pack Place a letter saying the corporation had indeed defaulted on its lease because it had failed to make repairs that had been needed “for years,” and that the city would therefore exercise its lease rights, take control of the physical plant and enter into separate lease agreements with each of Pack Place’s on-premises partners.
A few days later, Mayor Esther Manheimer convened an “informal dialog” meeting with the Pack Place board at which she said the city was open to suggestions about the direct lease arrangements; however, she allowed herself to be contradicted by Vice Mayor Marc Hunt, who is also the city’s liaison member of the Pack Place board. Hunt flatly said that renewing the current lease was not an option.
That was when Pack Place board member and architect Barbara Field, who had been project director for the building of Pack Place, identified Jackson’s list of “defaulted repairs” as a “wish list” of suggested improvements she had drawn up herself. Field accused Jackson of stealing her coprighted list and using it “as a document to blackmail Pack Place.”
The Marc and Gary Show
Pack Place began at once to explore its legal options but took no action. At the board’s April, 2014, meeting Hunt, with Jackson in tow, told the Pack Place board he had been authorized at a closed session of city council the night before to offer a sixty-day extension of the existing lease, provided that by the end of that time Pack Place would be prepared to hand the administration of the property over to the city. The city would then enter into separate lease agreements with the tenants.
Hunt produced no document confirming his authorization to make such a demand. In the end, however, he prevailed; the board passed a resolution accepting the 60-day extension (until July 31, 2014) to get its affairs in order and begin phasing itself out.
Two city officials, who insisted on strict anonymity, told the Tribune that although council had indeed gone into closed session the night before, it was for another purpose altogether and that Pack Place had not even been discussed. Two weeks later – after the Tribune published this information – council retroactively passed a resolution giving Hunt authority to do what he had already done.
Hay told the Tribune Monday that although the board is in much the same position as the Confederate government after the fall of Richmond, it still has plans to pursue legal action against the city. “We have a fiduciary responsibility to do that,” he said. “We can’t just let it go.”
Hay said he expects the litigation approach will be discussed at the July meeting.