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Joint project for ex-hotel mulled
Wednesday, June 27, 2012
By MICKEY POWELL - Bulletin Staff Writer
The Phoenix Community Development Corp. hopes to combine the former Henry Hotel’s redevelopment with another project to try to have a better chance of getting tax credits needed for the work, according to Executive Director Ray Gibbs.
Gibbs told the Martinsville City Council on Tuesday that he knows of another project with which the hotel might be combined. He said that project is uptown, but he declined to elaborate because a contract is not yet signed.
Another potential option he mentioned is finding and securing tax credits unused from a previous redevelopment project. The developer of such a project would have to agree to contribute the credits, Gibbs indicated.
He said he hopes to have some positive news along one of those lines to share with the council during a meeting in July.
Economic conditions have hindered arranging financing for the hotel project, according to Gibbs.
Phoenix is a nonprofit developer established in 2009 to work with the public and private sectors on revitalization efforts in the city and Henry County.
The former hotel building at the corner of East Church and Broad streets is Phoenix’s first major project. Three years ago, the council bought the four-story building for $520,000 — funded in part with a $425,000 loan from The Harvest Foundation — with plans to have the structure renovated.
Earlier this year, Gibbs said that redeveloping the building would cost about $4.2 million and multiple funding sources would be needed. He said that while Phoenix could get a bank loan for about $1.5 million, the rest of the cost would have to be financed first to get the loan.
A few people, as well as a restaurant and an insurance agency, still occupy the hotel building so the city is covering utility expenses there.
Councilman Gene Teague said he wants to see figures on how much it would cost to relocate the residents and businesses so utilities could be discontinued. He reasoned they eventually will have to be moved — at least temporarily — if the building is to be redeveloped.
Councilman Danny Turner asked if Phoenix could take over ownership of the building or if it could be sold to another developer.
“I think the citizens are getting fed up” that the city owns a hotel that cannot be redeveloped, Turner said.
Gibbs said Phoenix could not afford to take over ownership. He added that Phoenix already has put much time, money and effort into the project that another developer would have to do over again.
Also Tuesday, the council agreed for the city to take the lead role in helping the New College Institute (NCI) try to get federal grants to start an advanced manufacturing education program.
The city’s involvement could improve the institute’s chances of receiving a grant, officials indicated.
Leanna Blevins, NCI’s associate director and chief academic officer, said a total of about $26 million is available from five federal agencies through an Advanced Manufacturing Jobs and Innovation Accelerator Challenge.
Those agencies are the Economic Development Administration, Employment and Training Administration, Small Business Administration, National Institute of Standards and Technology, and Department of Energy.
The most money that a locality could receive is $2.3 million, Blevins said.
Interim City Manager Leon Towarnicki said he thinks the city’s participation would be worthwhile.
The city will be the “lead applicant” that serves as the fiscal agent that submits grant applications to the government agencies.
Other potential applicants that might get involved to help NCI, Blevins said, include the Martinsville-Henry County Economic Development Corp., GenEdge Alliance and a private local company that she did not identify.
Mayor Kim Adkins announced that the council has decided to proceed with the search for a new city manager. She did not explain why.
The council had considered postponing the search until after the Nov. 6 election.
Three seats are up for grabs in the election. Only two of the six candidates — Mark Stroud and Danny Turner — are incumbents. Therefore, it is possible that new council members who would take office in January would comprise a majority of the five-member council at that time.
Council members had reasoned that any new members possibly should be allowed to give input into qualifications and experience that a new manager should have.
Former city manager Clarence Monday left in January to become the county administrator in Amherst County. Towarnicki, Martinsville’s public works director and assistant city manager, is serving as interim city manager.
Springsted Inc., an executive search firm, is helping the city do the search. Adkins said the council would notify the firm of its decision immediately.
The council met in closed session to consult with legal counsel, discuss a personnel matter and consider possible appointments to local boards and commissions. In open session, it reappointed Monroe “Monty” Ridenhour to the Martinsville Planning Commission.
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