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Hotel talks sought
City wants to meet on project with Harvest, Phoenix
Thursday, July 26, 2012
By MICKEY POWELL - Bulletin Staff Writer
City officials aim to resolve the issue of how to redevelop the former Henry Hotel uptown as quickly as possible, preferably in four to six months.
Martinsville City Council on Tuesday decided to pursue talks with the Phoenix Community Development Corp., a nonprofit developer spearheading efforts to redevelop the structure, and The Harvest Foundation, which was involved in launching Phoenix three years ago, about getting the issue resolved.
City officials have said they want to transfer the property’s title to Phoenix in hopes it would spur the organization to put more effort into the building.
It “would not be that onerous of a burden” on Phoenix to take the title, City Attorney Eric Monday said he believes.
Ray Gibbs, president and CEO of Phoenix, has said redeveloping the Henry is a complex project that will take time.
Phoenix is doing everything it can, such as trying to find tax credits for redevelopment and encouraging other developers to become involved, he said.
Still, Phoenix’s resources are limited so “we’re not financially capable of taking over” and maintaining the building right now, he told the council.
“I can’t understand” why Harvest does not redevelop it, Councilman Danny Turner said. “They’ve got plenty of money.”
At least, Harvest’s input “certainly would be welcomed,” said Councilman Mark Stroud.
Formed a decade ago, Harvest invests proceeds from the sale of Memorial Hospital in Martinsville in local health, education and welfare initiatives. It so far has provided more than $74 million in grants, according to its website, which says it also has an “intention of guiding community revitalization.”
Allyson Rothrock, the foundation’s executive director, could not be reached for comment Wednesday.
The four-story former hotel at the corner of Broad and East Church streets was erected in the 1920s and had been subsidized housing since the 1980s. The city bought the structure at a public auction in 2009 for $425,000, not $520,000 as has been reported. The city put $95,000 of its funds toward the purchase; Harvest gave the city a loan covering the rest of the price.
Under the loan agreement, Martinsville is making interest payments monthly until August 2029, said city Finance Director Linda Conover. If the city still owns the building then, the principal on the loan will become due, she said.
According to a report prepared by Monday and Interim City Manager Leon Towarnicki, the city has since spent about $55,000 a year to maintain the building and provide utilities to tenants, including former residents and a restaurant and insurance office that still are there.
Some council members have complained that amount is too much.
The report, which Monday presented to the council, lists six options for the Henry, including transferring the title to Phoenix. Another is tearing it down, which city and Phoenix officials agreed they do not want to pursue now.
The other options are:
• Renegotiating leases of existing tenants “to better reflect and offset the current costs to operate the building.” But higher rents could cause them to leave, which would result in more vacant storefronts uptown, officials said.
• “Mothballing” the building. If the remaining tenants leave, utility services could be shut down or reduced to a minimum, the report shows.
• Actively seeking a private developer, and
• Listing the building for sale. That would be the last option considered, Towarnicki said.
In buying the building, the city wanted some control over how it would be developed in the future as part of revitalizing uptown, Martinsville’s central business district.
City officials suggested that all five options — excluding demolition — be explored in talks with Phoenix and Harvest.
“I’m glad you’re looking down some different paths,” Stroud told Monday.
Other ideas from the public are welcome, officials said.
At the council meeting, Gibbs reiterated points he made in a Martinsville Bulletin article on Tuesday that the project may be close to getting state revitalization funds and federal tax credits.
Gibbs said he is “more confident today than I have been in a while” that the Henry eventually will be redeveloped. In the meantime, he said, “we want to make sure we turn over every stone” to find funding.
“We are going to work as hard as we can,” he said. “We are going to find a way to make this work.”