Board may yet sue city; citizens in turn want to sue board
Just not necessarily the same board of directors.
Asheville attorney and Buncombe County Board of Commissioners candidate Edward Hay, who is chairman of the Pack Place Corporation’s board of directors, told the Tribune Monday that the board is trying to collect damages from the city for refusing to renew its lease with the corporation in July of 2014.
That was when the city, bypassing the contractual relationship it had had with Pack Place since 1988, finished behind-the-scenes negotiations of individual leases with the Pack Place member organizations – Diana Wortham Theater and the Asheville Art Museum. (Another tenant, the Colburn Gem and Mineral Museum, left the premises saying it could not afford the city’s terms.)
“The [Pack Place] corporation is still intact,” Hay said, “but it has no business to discuss and so it has not met in many months.”
It is not clear where the board would hold a meeting if one were called; it can no longer use what used to be the Pack Place board room, which is now art museum office space.
“There are some damages provisions that kicked in when the city refused to renew the lease,” Hay said. “That’s what we are trying to resolve. We are continuing to meet and correspond with the city and we are making progress.”
The board is also sitting on control of some $382,000 worth of endowment money. Under the terms of the Pack Place charter, the endowment is not severable until and unless the Pack Place Board formally dissolves the corporation. “We’ll have to get with the Community Foundation [of Buncombe County] about administering that when the time comes,” Hay said, “but that won’t happen until after we settle things with the city.”
Exactly when that might be is not known. The city’s legal department has twice turned aside inquiries from the Tribune about the nature of the city’s and the board’s discussions. What is known is that the Pack Place directors have not actually filed a suit against the city for breach of contract. The North Carolina statute of limitations on such an action would not run out until July of 2017, but observers doubt that the board has any plans to sue.
That doesn’t sit well with an informal and anonymous grassroots group calling themselves “The Pack Rats” which is seeking to call public attention to the ongoing situation. The Pack Rats believe the zombie-like board should be prosecuting the city — not negotiating with it – for breaking the lease without compensating Pack Place.
The group, which is said to include Pack Place contributors, former city employees and at least one attorney, says the board’s failure to sue the city amounts to breach of fiduciary duty to city and county taxpayers. They say a public lawsuit against the board on those grounds could pave the way for a rebirth of Pack Place as set forth in its charter.
Pack Place was organized in 1988 as a partnership of nonprofit cultural entities operating out of a facility designed expressly for that purpose. The building itself was constructed on city-owned property and paid for with a combination of taxpayer money, grants and public sponsorships. The original partners were The Health Adventure, the art museum, the Colburn, the theater and the YMI Cultural Center, which is housed in a separate building but shared the budget and funding.
Financial troubles caused The Health Adventure to close, leaving its part of the building vacant. The art museum at once expanded into that space. When the Colburn left, the art museum took over its space as well. Then the museum began pushing an ambitious expansion agenda it said was to be funded by an ongoing capital fund drive it had begun in 2006. By 2013 the museum was actively lobbying the Pack Place board to be allowed to enter into its own lease agreement with the city. But the board demurred on grounds that such action would amount to breaking up the Pack Place partnership.
At that point the art museum apparently enlisted the city’s aid, and the city responded with a strategy whereby it could accomplish two goals at once: placate the art museum and gain control of the Pack Place physical plant.
In January, 2014, City Manager Gary Jackson sent a letter to the Pack Place board demanding payment of $800,000 in compensation for repairs and maintenance it claimed Pack Place had failed to make.
But architect Barbara Field, a Pack Place board member and the original supervising architect for Pack Place, identified the “repairs” set forth in Jackson’s letter as a “wish list” of suggested physical plant improvements that she herself had compiled and which the city had “stolen,” distorted, and was using “to blackmail Pack Place” and create a bogus default situation.
Such a default would allow the city to acquire the Pack Place building without paying any compensation at all to the tenants individually or to the Pack Place corporation. Critics called the default accusation a ruse by the city to gain control of the building for its own purposes and say that the city had no standing to be issuing an ultimatum to Pack Place.
In fact, both Jackson and city council member Marc Hunt stated in e-mails obtained by the Tribune at the time that the default gambit was part of the city’s “strategy” for assuming direct ownership of the Pack Place building.
Jackson and Hunt attended the April, 2014, meeting of the Pack Place board and said they had been authorized to give the board sixty days to “tie up loose ends” before turning over control of the building to the city. The action brought a quick response from the board’s attorneys, who countered that although the city owned the ground on which the building stands the Pack Place corporation owned the building itself and the city had no basis for making such a demand.
The board, however, never took legal action to assert that position. Instead it acquiesced and, over the summer, dismissed its staff, sold its equipment and vacated its building.