As city government personnel plan another visit to Raleigh, to ask state financial analysts to reconsider their negative stance on a local Barter Theatre expansion, a developer of a proposed hotel has drawn a line in the sand.
Dana Bryson, who earlier announced plans for a four-star hotel and banquet center on former Spencer’s industrial property in downtown Mount Airy — where the theater also is eyed — has updated her position in light of recent developments.
Specifically, Bryson has addressed a rejection of the Barter Theatre plan by a subcommittee of the North Carolina Local Government Commission (LGC), a watchdog agency that must approve financing arrangements of communities planning such major projects.
That group, a division of the state Treasury Department, basically seeks to prevent local governments from entering into deals that could threaten their long-term fiscal health and pose undue burdens for taxpayers. After listening to a presentation last month on the Barter project, part of the overall Spencer’s redevelopment efforts, the LGC subcommittee of three financial experts deemed it too “risky” and “costly.”
They said debt service payments for long-term financing and subsidizing theater operations could subject city residents to a 10-cent hike in property taxes during the Barter’s initial years here, among other repercussions.
The analysts, citing the city’ financial exposure of $5 million to $13 million, suggested that Mount Airy find a more feasible way of meeting the objective behind the theater of creating a downtown tourism destination.
A third project also is planned for the Spencer’s redevelopment area, a 67-unit upscale apartment complex with a Phase II option for another 53.
Letter from developer
Bryson, owner of K2 Hotels and Services, reacted to the LGC action in a letter sent to city officials within the past week, restating the need for a “demand generator,” such as the theater, for the 90-room hotel planned locally.
The developer also had referred to that during a community meeting on the Barter plan earlier this year. She indicates in her letter that the situation has reached a more critical stage, especially in regard to historic tax credits needed to aid the Spencer’s redevelopment.
“As demonstrated in my active involvement in the Spencer Mill Development over the past three years, I am dedicated to pursuing a successful project,” Bryson wrote city officials.
“However, the necessity for a demand generator is absolute for me to continue the hotel development. In other words, the success of the hotel operations is driven by demand for hotel rooms and there is not enough without a new demand generator to make the hotel project feasible.”
Bryson, whose firm in December exercised an option to buy former Spencer’s property, added that timing has become an issue from her standpoint.
“Unfortunately, time has worked against us, and now we are facing a deadline for the development utilizing the tax credit rehabilitation program,” she wrote.
Bryson, well known for her work as a partner in a Winston-Salem development group that owns and operates Brookstown Inn there, laid down some conditions for Mount Airy officials going ahead.
“For my hotel project to move forward several things need to happen. There needs to be a timeline that my development team, underwriters and investors can depend on with a reasonable level of certainly,” she wrote.
“An experienced development project manager should be selected by the city to continue the development without further delay.”
In addition, Bryson has set a specific date for tangible action along those lines.
“We need to have meaningful conversations that produce some solutions by May 1,” advised the developer, “otherwise I will not have time to meet the construction deadlines to complete my project utilizing the tax credits.”
Bryson also says “a joint opening of the demand generator and hotel should be coordinated, as a hotel on a site under construction will not draw patrons.”
Meanwhile, Ken Reiter, the developer of the planned 67-unit apartment complex, is said to be “undeterred by the theater decision” by the LGC subcommittee and seeks to continue with development as quickly as related infrastructure work can be completed.
Raleigh revisit planned
A backdrop to the concerns by the hotel developer is a planned second visit by city government representatives to the Local Government Commission office in Raleigh.
This is being done at the urging of commissioners Steve Yokeley and Shirley Brinkley, who were not part of a Mount Airy delegation that first met with the state analysts on March 22. Yokeley said in the wake of their initial rejection that he thought the city would be better prepared during a second visit.
He and Brinkley were among the city commissioners voting 3-2 on March 1 to approve an agreement for the Barter expansion, which later was shot down by the LGC group.
No date has been announced for the Raleigh trip, but it is believed that it will take place by May 1.
This is expected to include the presentation of additional figures to the LGC subcommittee that might not have been highlighted earlier.
Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.