FROM STAFF REPORTS

Despite concerns that the developer has not lived up to his end of the development agreement, the Statesville City Council voted Monday night to finalize the sale of the Historic Vance Hotel.

The Rainier Group will purchase the dilapidated landmark for $47,000, which represents a fraction of the $475,000 that the city paid for it in 2012. Led by Steven Barker, the developer plans to turn the Vance Hotel into a 60-room boutique hotel.

Under the agreement, city staff will assist Barker with qualifying for historic property tax credits and permitting for the project. The city will have use of 20 spaces in the adjacent parking deck.

The council voted 4-4 on a motion to approve the amendment to the master development agreement, which accelerated the sale. Mayor Costi Kutteh cast the tie-breaking vote, which resulted in approval of the motion.

“This is the only deal on the table,” Kutteh said. “To me, it’s a deal that can be completed.”

The mayor and council had an in-depth discussion before the vote and allowed the public to weigh in during a public hearing.

Roger Bejcek and Terry Sharpe, two candidates for at-large seats on the council in Tuesday’s election, were critical of the council for taking action in the 11th hour before the election. Both men opposed the deal.

“It’s your bag of worms,” Sharpe said. “You don’t want to eat them now, and neither do the citizens.”

The biggest critics of the deal, however, were councilmembers David Jones and William Morgan. While supporting the project in concept, they said the Rainier Group had not fulfilled provisions of its agreement with the city requiring the developer to disclose detailed drawings of the project and proof of financing. The cost is estimated at $8 million-plus.

Jones said he had too many questions to support the sale at this juncture.

“What’s it going to cost, and can he get it financed? And is the project feasible?” he asked.

But councilmembers Steve Johnson and John Staford said the sale was a good deal for the city — and carried no additional expense or risk for taxpayers. They contrasted it with an earlier deal by the council that fell through in which the city would have contributed upwards of $4 million to the redevelopment of the hotel.

The Vance Hotel is badly in need of a new roof. The top two floors have sustained major water damage.

According to City Manager Ron Smith, Barker sought the amendment because he wanted to close on the sale so he can have the roof properly repaired. Councilmembers speculated the cost would be upwards of $200,000. That’s on top of the more than $100,000 the developer has spent cleaning up the property.

“Our only risk now is that we might have to have it back (if the developer defaults). And if we do, it will be with a laser survey of the whole place and a brand-new roof on it,” Kutteh said.

When the mayor called for the vote, councilmembers Amy Lawton and C.O. Johnson joined John Staford and Steve Johnson in support of the sale.

Councilmembers Doris Allison and Fred Foster joined William Morgan and David Jones in opposition.

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