Wednesday, August 31, 2016

The Daring Daylight Pack Place Caper Of Two Thousand and Fourteen

How the city stole a public building in broad daylight
By Roger McCredie
Great Moments in Asheville Government
This is a lengthy article providing an example of how our City operates - what often looks legit is often questionable.  In this story, we write about the taking of Pack Place to benefit the Asheville Art Museum.
Article sections:
  • The Story of the Name Behind the Art Museum Sign
  • How Pack Place Came To Be
  • The Rise of the Imperial Art Museum
  • The Loophole
  • “Make your own damn list!”
  • The Art Museum Piles On; The Colburn Calls It Quits; Pack Place  Finally Reacts
  • The Caper: “Have we got a deal for you.”
  • A Lingering Death
The Story of the Name Behind the Art Museum Sign
Pack Place (former)
You know that red brick building on South Pack Square?  There’s a big sign above the front door that reads “Asheville Art Museum,” right?

Well, behind that sign is a slab of masonry into which is carved, in large Roman caps, “PACK PLACE.”

That’s becauseon a pleasant spring afternoon two years ago, the members of the board of directors of Pack Place, Asheville’s public art, science, and cultural center, sat around their conference table and numbly voted it out of existence.

For nearly three months prior, the board had watched, like a bird transfixed by a snake, while the city executed a series of maneuvers that prepared the way for its coup.  When the snake finally struck the board made no attempt to save the entity that existed to protect; it remained paralyzed while the city, bold as brass, swallowed it whole.

Moreover, even after it came to light that the city had no authority to do what it did at the time it did it, the action went unchallenged except for some grumbling.  And two weeks after the fact, City Council covered its own behind by authorizing the takeover retroactively.
Nearly two and a half years later, nobody has made a move to challenge the city’s actions, which in fact may no longer be challengeable depending upon how you cut the Statute of Limitations.

At this point you may be asking, “How could such a thing happen?”  Then again, you may not.  No matter.  Here’s how it did happen:

How Pack Place Came To Be

Pack Place – both the building itself and the confederacy of entities that moved into it – was essentially the brainchild of Roger McGuire, a retired advertising executive who moved to Asheville in the early 1980’s.  McGuire looked at the urban pockmarks on Pack Square and concluded the place could be revitalized if it had a sufficiently interesting new anchor that would jump start the process.  He put together a team of civic organizations and philanthropic individuals who fundraised a patchwork of sponsor contributions, taxpayer monies, public grants and private donations, and in 1992 the 90,000-square-foot Pack Place building was dedicated.  

The original Pack Place member/tenants were the Colburn Earth and Science Museum, The Health Adventure, Diana Wortham Theater and the Asheville Art Museum.  (The YMI Cultural Center is/was considered a Pack Place member organization, but it inhabits its own historic building around the corner.)  But the Health Adventure developed financial problems and had to vacate its space, which was promptly gobbled up by the Art Museum in what the historians like to call a Foreshadowing of Things to Come.

The Rise of the Imperial Art Museum
To understand everything that happened over the next few years, it’s essential to understand two points:  
  1.  The Pack Place Corporation owned the brick-and-mortar building, but the city owned the land on which the building stands.  Pack Place rented that land from the city for $10 a year, in much the same way that the owner of a mobile home pays lot rent in a trailer park.  (When the showdown, such as it was, came, the city would doggedly insist – and most local media would dutifully report – that the city owned the building.  That simply isn’t true.)
  2.  The organizations that “lived” in the Pack Place building all held leases of the Pack Place Corporation, their landlord.  Pack Place on one hand and the members on the other had the same basic rights and responsibilities towards each other that are found in most landlord/tenant arrangements.  If dealings with the city were necessary the Pack Place board, made up of representatives of each of the member organizations, handled them.  In fact, to facilitate communication with City Hall, the bylaws provided that the board should always include a member of City Council, who would act as City Hall liaison.
In 2006 the Art Museum announced it had big plans:  it intended to increase its exhibit space by 55% by remodeling and adding onto its existing square footage, and it was undertaking a years-long, all-out fundraising effort to raise $24 million for that purpose.  At the same time it began making noises about seceding from the Pack Place alliance and leasing its space directly from the city,

That would of course require approval from the rest of the Board, which was disinclined to give it for fear of undermining the entire Pack Place corporate structure.  So the Art Museum kicked off its funding drive and began cultivating friends at City Hall.

The Loophole

As noted, Pack Place owned its building and leased the ground under it from the city. Moreover, the lease provided, if the city should ever want to acquire the Pack Place building it would have to do what any outside party would have to do and make Pack Place an offer at a fair market price, which Pack Place was under no obligation to accept.

But imbedded in the language of the lease was a glaring exception:  if it should ever become evident that Pack Place was not properly maintaining its physical plant, then the city had the right to exercise eminent domain and seize possession without having to pay Pack Place any compensation at all.

Thus it was that on January 31, 2014, Pack Place, without any prior warning, received a letter from City Manager Gary Jackson.  Pack Place, it said, had failed miserably, over the course of years, to take care of its own building.  It now owed the city approximately $800,000 for past and necessary future repairs; pay up within 60 days, the city said, or be considered in default of your lease, in which case we will take over the building.  Attached was a list of repairs that, according to Jackson, needed to be made to the building at once.

The Pack Place administration and the members were dumbfounded.  Well, except for the Art Museum, which licked the canary feathers off its nose and waited.  

“Make your own damn list!”

Two weeks later Mayor Esther Manheimer and Jackson came over for what was billed as an “unstructured, informal” meeting to discuss Jackson’s ultimatum. The sitting Pack Place city liaison board member was Vice Mayor Mark Hunt and it became immediately apparent that he and Manheimer were going to play good cop-bad cop. Manheimer said the city was willing to be “flexible” about Pack Place’s being able to pay up and salvage its lease; Hunt said the repair list and other terms were “non-negotiable.”

That was when board member Barbara Field fired a point-blank volley into the city’s position. Field had been the managing architect for the building of Pack Place and was serving on the board’s building committee, which had charge of maintenance, and her response to Manheimer and Hunt was an explosion of anger and contempt.

Jackson’s list of defaulted repairs, Field said, was no such thing.  On the contrary it was, verbatim, a memo that had been drawn up by Field herself.  “This is a document that I authored and that I presented. It belongs to me. It is part of a drawing that is copyrighted. It does not belong to the city. The list is not a list of deferred maintenance. It is a wish list of things we would like [to see done].

“You have basically stolen that from me and attached it to a document you are using to blackmail Pack Place,” Field declared, glaring across the table at Hunt. I’m really, really angry. Make your own damn list,” she snapped.

“I cannot see how you can find Pack Place in default for deferred maintenance, which is what you’re saying,” Field added. “Find another excuse to put us in default. That [the demand letter] doesn’t count and doesn’t matter and is complete fantasy on the part of City Council.”

The meeting broke up shortly thereafter.  Manheimer and Jackson, with Hunt trailing, beat a strategic retreat after saying the city’s position was unchanged:  Pack Place had until March 31 to pay up or be gone.

There were a couple of subsequent revelations: first, that Jackson and Hunt stated in e-mails that the default gambit was in fact part of the city’s “strategy” for assuming direct ownership of the Pack Place building; and, second, that the Art Museum had received a draft of its very own direct lease with the city back in January – before Jackson’s demand letter had even gone out – and had in fact been discussing a direct lease with the city as far back as January of 2013.

The Art Museum Piles On; The Colburn Calls It Quits; Pack Place Finally Reacts

With its draft city lease in hand and its own future secure, the Art Museum now piled on, telling its fellow Pack Place organizations that if they wanted to play ball with the city they needed to get on board at once because the Art Museum needed to go forward with its expansion plans.  That’s when the penny dropped and it became plain that the Art Museum, incredibly, was going to call the shots about what became of Pack Place – up to and including taking it over.

At a March 23 meeting, just a week before the deadline, finance chairman Michael Andry challenged Art Museum board chair Lyn Andrews by stating the obvious. “Pack Place does have the ability to just say no,” he pointed out, “and that would throw a big curve ball into everything – “

“Well,” Andrews shot back, “If you [the Board and other Pack Place partners] said no, then we would have to react to that.” Andrews did not elaborate as to what “react” might mean.

Meanwhile the oldest, smallest and most vulnerable of the Pack Place organizations, the Colburn, said it would not be able to meet the financial demands associated with a direct city lease and would have to relocate.  It requested $580,000 in relocation reimbursement from the city, which responded with a don’t-make-us-laugh letter.

Finally, on March 27, Mary Robinson, Pack Place’s attorney, sent a strongly worded letter to Fred Barbour, whom the city had hired as outside counsel for this matter, calling the city’s claims “completely groundless” and demanding that it retract Jackson’s letter or face a lawsuit.

Then things got quiet.  March 31 came and went.

The Caper: “Have we got a deal for you.”

On April 9, Hunt, wearing his city council rather than his Pack Place hat, told the board that the city, of its goodness and mercy, was prepared to cut a deal.  If the tenants, including Colburn, were willing to sign direct leases with the city then and there, Gary Jackson – who was present at Hunt’s behest – could sign off for the city and all would be well.  Otherwise, everybody had until July 21 to vacate the premises. (It was as though the Pack Place board didn’t even exist.)

Hunt demanded an up-or-down vote on this proposal then and there.  Where was the resolution giving him that authority?  Hunt said he didn’t need one.  Then could the board members see a copy of the city’s proposal?  No, Hunt said, it was verbal.  What was the vote breakdown?  There was none because there was no vote, Hunt said, it was a verbal agreement in an informal meeting. What exactly was the wording of it?  “I can’t remember any particular phrase,” Hunt said.

And that, people said later, was the cue for board chairman Edward Hay to tell Hunt and Jackson, “You don’t have a legal leg to stand on and you’re probably lying as well; get out of here and we’ll see you in court.”

But that wasn’t what happened.  Instead, the Pack Place board voted to accept the city’s 60-day extension as presented, though it vowed to use the time to organize its lawsuit.  That, in the end, didn’t happen either.  And as icing on the cake, two full weeks after Hunt said he needed no resolution to enforce the Pack Place takeover, city council gave him one … retroactively.

So the employees got pink slips, the furniture was auctioned off, and twenty-two years after moving into its new building Pack Place, Inc., moved out.  Diana Wortham Theater stayed in place, its ticket office moved to a side entrance.  The Art Museum promptly expanded into all the vacated space and plastered a life-size scrim of the architect’s rendering of its expansion on the building’s front fa├žade, and placed its own signage over the Pack Place inscription.

A Lingering Death

Two years later the corpse of the Pack Place corporation is still twitching.  It has not been dissolved and its executive committee still meets from time to time.  No lawsuit has ever been filed; instead the corporation still dangles the possibility of one before the city as the statute of limitations ticks away. A reliable source reports that Pack Place, Inc., is using endowment money to pay past and present legal bills.  The appropriateness of that might be questionable but nobody seems disposed to question it.

Except, perhaps, the restless ghost of Roger McGuire.

(In-depth article to follow on Asheville Art Museum)
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RogerMROGER McCREDIE is a well-known Asheville-based journalist. His investigative reporting for the Asheville Tribune on such topics as New Belgium Beer, the “Bruingate” bear hunting sting and the city’s takeover of Pack Place earned national attention.  His feature writing appears regularly in Capital at Play magazine and he contributes to several blogs including the recently launched “Tavern Voices.”

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