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Hotel title transfer mulled
Monday, July 23, 2012
By BULLETIN STAFF REPORTS -
Martinsville officials want to transfer ownership of the former Henry Hotel uptown to the nonprofit Phoenix Community Development Corp. to give the building a better chance of being redeveloped.
City officials think “actually holding the title to the building would provide a greater incentive to Phoenix to redevelop the property,” City Attorney Eric Monday and Interim City Manager Leon Towarnicki wrote in a report to the Martinsville City Council.
Phoenix has been trying to redevelop the four-story structure at the corner of East Church and Broad streets but “has been unsuccessful in formulating any viable plans,” the report says.
Phoenix was formed in 2010 with the idea that it would accept the building’s title, the report shows.
When it meets at 7:30 p.m. Tuesday, the council will consider options in the report for redeveloping the structure. The preferred option, the report shows, is transferring the title to Phoenix.
Three years ago, the city bought the four-story building at the corner of East Church and Broad streets for $520,000. The Harvest Foundation contributed a $425,000 loan toward the purchase.
According to the report, the city has since spent about $55,000 annually to maintain the building and provide utilities to tenants, including residents who have since moved out and a restaurant and insurance office still there.
Some council members have said the expense is too much.
Other options in the report include selling the building and trying to find a private developer. These options would be discontinued if Phoenix takes the title, the report shows.
Options also include demolishing the building or “mothballing” it. With the latter, the two businesses would leave the building. The city then would be able to shut off or limit utility service to the structure, the report shows.
The city also could renegotiate the tenants’ leases “to better reflect and offset the current costs to operate the building,” the report states. But a large rent increase could hurt the businesses, it acknowledges.
Also Tuesday, the council will learn about its options for studying a potential reversion of the city to town status.
Reversion means Martinsville would become a town in Henry County. The idea is that Martinsville would save money because the county would start providing certain services, such as courts, to residents and businesses.
Cities in Virginia are independent of the counties that surround them and, therefore, do not receive any services from counties.
The council explored the idea of reversion several times previously but never pursued it. In May, while the fiscal 2013 budget was being prepared, council members brought up the idea again in response to expenses continuing to increase at a time when city revenues are stagnant.
According to Mayor Kim Adkins, potential benefits of reversion include lower tax rates for residents because fewer services would require less revenue, as well as the right to annex county land so Martinsville’s tax base can grow.
Towns can annex county land but state law has prohibited Virginia cities from pursuing annexations since the mid-1970s.
Other agenda items will include:
• Recognizing the city’s receipt of the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada.
• Hearing an update on plans to renovate Martinsville High School.
• Considering a schedule and possible locations for council neighborhood meetings.
• Hearing business from the floor.
• Considering routine-type budget amendments.
• Meeting in closed session to discuss a personnel matter.